Tanzania: Air Freight Charges Sharply Rise As COVID-19 Dictate Terms

AIR freight charges have considerably risen with analysts attributing the trend to higher operating costs, few scheduled flights and coronavirus bite.

A special report released in Arusha yesterday on how to facilitate air cargo operations in the East African Community (EAC), region, while member states battle covid-19, showed Kenya, for example, with a volume of fresh produce at Jomo Kenyatta International Airport (JKIA) having reduced from a weekly 5,000 tonnes to 1,300 tonnes, and seen as a 75 percent decline with similar trends reported across the entire bloc.

Equally, with global demand and supply disruptions, the region has been mostly hit making its export produce uncompetitive.

For instance, Airfreight charges to the European Union (AU) and other markets in the last few weeks have ranged from $3-7 up from an average of $1.50-2.50 per kg.

"Costs, however, continue to ease with more scheduled capacity provided by KLM, Qatar and Ethiopian Airlines (that started routes to and from Tanzania last week). The return of Rwandair and Kenya Airways to the skies is a welcome relief for exporters.

"However, it will soon become increasingly difficult for them to compete with airlines that are receiving governments' subsidies," said East African Business Council (EABC), Chief Executive Officer (CEO), Dr Peter Mathuki, while talking to this paper.

Air cargo accounts for approximately 35 percent of the world's trade by value and is a crucial part of freight transport, complementing both land and sea transport, and for time-sensitive cargo.

Following the Covid-19 outbreak countries have imposed restrictions on flights, particularly passenger aircraft to contain the pandemic severely disrupting global supply chains.

While cargo operations have continued, measures to enhance capacity have been adopted by repurposing passenger aircraft to facilitate continuous delivery of critical goods.

The International Air Transport Association (IATA), has supported the industry to execute cargo operations and use of passenger aircraft to enhance connectivity.

The World Health Organisation (WHO), International Civil Aviation Organisation (ICAO) and IATA have worked in close collaboration to develop aviation-specific guidelines to ensure appropriate planning and action at all levels to mitigate the effects of a human outbreak.

Together, the organisations have developed guidelines on how to transport cargo safely and to ensure continued and uninterrupted air cargo services vital for global supply chains and emergency medical supplies.

The CEO noted that while the rest of the world has adopted new measures to facilitate air transport, the EAC partner state airlines are still in the process of adapting, despite most of their aircrafts being underutilised.

The demand for air cargo imports into the region remains low due to disruptions in Global Supply Chains (GSC).

However, there is sustained growth in the demand for fresh produce exports anticipated to last till the summer.

Current Aviation Industry subsidies in response to the Covid-19 crisis include government or Central Bank support through direct financing, loan guarantees, corporate bonds and tax reliefs.

"However, these measures alone, even if extended to EAC airlines will not sufficiently address the current crisis.

So, we recommend that the current Covid-19 crisis on air cargo operations get extraordinary measures to address the challenges in the region.

"Like the EU, it demands greater cooperation between East African airlines and the international aviation community, including air cargo and express service providers to ensure the supply and fair distribution of scarce and essential goods," Dr Mathuki noted in the position paper.

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