• Exports Shipped by Air Increased January-April Despite COVID-19
    2020-06-16 hit 1685

    Exports Shipped by Air Increased January-April Despite COVID-19

    - Thanks to 124% increase in exports of computers airfares for long distance flights are still high, need to work on fare stabilization -


    Despite the spread of COVID-19, air freight exports increased by 4.6 percent as of April this year.


    The Institute for International Trade (President: Shin Seung-kwan) of the Korea International Trade Association stated in a report titled Recent Trends in Logistics for Export after the Outbreak of COVID-19 issued on June 17th that the air cargo exports rose by 4.6 percent year-on-year to 55.8 billion dollars, thanks to the increased exports of computers. In contrast, ocean freight decreased by 13.2 percent due to sluggish exports of major items, including petrochemicals, petroleum products, and automobiles. The total exports during the same period fell by 8.0 percent.


    According to the report, exports of most IT products, such as semiconductors, computers, and wireless communication devices that are lightweight and high in price are shipped by air. From January to April, the export growth rates of semiconductors and wireless communication devices shipped by air decreased slightly to 3.5 percent and -6.6 percent, respectively, whereas the exports of computers rose by 124.1 percent, driving the increase in total air freight exports.


    Medium and large and heavy chemical items such as petrochemicals, petroleum products, and automobiles account for more than 99 percent of sea fright. In particular, the exports of petrochemical and petroleum products decreased by 18.5 percent and 24.4 percent, respectively, due to the drop in unit prices caused by the plunged oil prices. The exports of vehicles plummeted 18.2 percent due to shrinking global demand and ocean freight of general machinery (-6.2), steel (-14.9), ships (-14.8), and auto parts (-14.5) also declined significantly.


    The report analyzed that the effect of COVID-19 on logistics for export was limited in air delivery on long-distance routes. The report said, “In the case of ocean freight, some logistics setbacks occurred due to movement control between regions in the early stage of the spread of coronavirus. However, the impact was temporary and freight rate changes were insignificant. It also stated, In addition, the airfare for short and medium-haul routes increased by 2 to 3 times, but the rates have been stabilized mainly to major exporting countries, including Hong Kong, China and Vietnam.


    The report forecast, After the long-distance airfares to North America and Europe skyrocketed 4 to 5 times, they have not recovered to the level before the outbreak of COVID-19. However, in the future, the expansion of air transportation supply, including the major airlines’ resumption of international flights and the operation of special cargo charter flights, will act as pressure to lower airfares.”


    Do Won-bin, a researcher at the Institute for International Trade, said, Unlike large corporations that are able to respond with their own cargo aircrafts, charter rental or bypass transportation, most small and medium-sized businesses are unable to afford high airfare, and stressed, We need to actively consider logistics supports, including stabilization of airfare, expansion of charter cargo flights destinations, etc. for small and medium-sized exporters.


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