THE cost of transporting goods by air has surged since Russia's invasion of Ukraine, just as consumers are already grappling with the fastest pace of inflation in nearly 40 years, reports CNBC News.
Carriers, including KLM Royal Dutch Airlines and United Parcel Service, are filling their planes with pricier fuel for longer Asia routes to avoid Russia due to airspace closures. Jet fuel prices in the US last week hit the highest in more than a decade.
The US last Tuesday joined Canada and much of Europe in barring Russian aircraft from its airspace. In January, more than 2,500 flights that departed the US used Russian airspace, while 493 flights from Russia used US airspace, according to aviation data firm Cirium.
"With the uncertainty of Russian airspace restrictions to civilian aircraft, UPS decided on March 1 to avoid use of Russian airspace for our Northern Pacific (NOPAC) operations until further notice," UPS' pilots union said.
Higher transportation costs are likely to get passed along to consumers as it gets pricier to ship everything from manufacturing components to perishables like imported cheese and fruit. Commodity prices from wheat to aluminium are already spiking.
The US ban of Russian aircraft included cargo giant Volga-Dnepr, which flies large aircraft pieces like wing parts for some Boeing jets.
Some carriers are cancelling flights altogether, and Russian airlines have been hobbled by airspace bans. The reduced capacity is driving up rates during what is normally a seasonal lull for shipping in the months after year-end holidays.
Air cargo rates from China to Europe jumped 80 per cent last week from last to US$11.36 a kilogramme, the highest since October, according to freight booking and data platform Freightos.
FedEx on Thursday said it its Express unit is increasing surcharges for international packages and freight. Some peak surcharges will more than double - such as the rate for shipping from Hong Kong to Europe, Africa and the Middle East, which the company will raise from fifty-five cents a pound to $1.20 a pound, according to a notice on its website.
Stronger e-commerce demand in the pandemic and limited aircraft belly capacity as international passenger travel plunged has kept rates firm, even before Russia's invasion.
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