Surge in air cargo volumes sees flow into Dubai suspended for 48 hours

Source: The Loadstar
Date: 12th February 2024 

Cargo stakeholders – trying to deal with the Red Sea crisis-linked supply chain challenges – now face disruption in alternative supply chain modes.

Air cargo movement into Dubai – a major global trade hub – has been affected by a surge in volumes, forcing cargo terminal operator Dnata to suspend inbound flows for 48 hours.

The temporary embargo, imposed to clear up cargo buildups, began on the night of 12th February.

“In recent months, we’ve experienced a significant surge in cargo volumes at our Dubai facilities, particularly in import of general cargo such as fast-moving consumer goods, electronics and fashion accessories,” Dnata said, adding that volumes in January had soared 45%, year on year.

“To expedite the recovery process, we are implementing a temporary embargo on import loads of cargo at both Dubai and Dubai World Central airports,” the Dubai airport authority noted. dnata provides cargo services at both airports.

According to available data, dnata handles some 7,400 tonnes of cargo daily out of the two facilities by belly hold and freighter capacity, with combined annual volumes pegged at some 2.4m tonnes.

But Emirates has an exclusive terminal in Dubai, which has not reported any cargo disruption.

“Our operations remain unaffected by the embargo,” the senior VP at Emirates SkyCargo told customers. “We continue to handle our cargo shipments seamlessly.”

But Indian airline sources blame the cargo halt at Dubai on system issues and have shrugged off concerns over the two-day embargo announcement.

“This is a temporary issue,” an Air India official told The Loadstar. “It is business as usual for us.”

Sources within the logistics industry have attributed the bottleneck to the redirection of traffic from ocean networks due to developments in the Red Sea region. This redirection has notably affected the volume of shipments originally intended for transshipment connections in Dubai.

Even if a few containers move from ocean to air, there will be an impact on the supply chain ecosystem.

The cargo flow pressure created by ocean service reliability and capacity issues threatened to cramp air cargo networks.

The temporary embargo in Dubai underscores the immense strain on air cargo operations. Positioned as a vital link between Asia, Europe, and Africa, Dubai faces the ripple effects of disruptions in the Red Sea, amplifying not just local air cargo challenges but also reverberating across global supply chains reliant on Dubai.

A staggering 62% surge in air cargo volumes from Vietnam to Europe, surpassing the peak witnessed in 2023, further accentuates the urgency of the situation.

India ships perishables in large volumes to Dubai, mostly by domestic airlines like Air India and IndiGo and the inbound suspension is a major blow for its exporters.

The average airline cargo rates out of India have seen a 30% to 40% increase in the past couple of weeks. They put average air cargo booking rates at $3 per kg to the US and $2.7 per kg to the EU, up from $2/kg and $1.80/kg, respectively, a few weeks ago.

And the pricing picture is no different on the import leg.

Air freight is busy and Indian inbound rates [are] going wild and the air cargo flow situation in Sri Lanka and Bangladesh is “mayhem”.

Demand is massively high for airfreight, with limited capacity. The carriers don’t seem to be repositioning many freighters on the busy routes, which results in price hikes.

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