On June 12, 2020, Ashley Craig was quoted in FreightWaves on the spillover effects the air service dispute between the U.S. and China over COVID-related restrictions on passenger air travel will have for air freight shippers and other areas of trade.
According to the article, Chinese aviation authorities recently eased restrictions for 95 international carriers to allow them one route each per week. The revised rules don’t go as far as U.S. carriers want, and officials are concerned they are riddled with conditions that make it difficult to operate even limited services. In response, the U.S. Department of Transportation (DOT) said it would limit Chinese passenger airlines to two round-trip flights per week between China and the U.S.
Limiting flights from each country perpetuates the shortage of cargo capacity. Producers, retailers, and their logistics partners heavily rely on leftover bellyhold space in passenger planes because there aren’t enough pure freighters to handle all e-commerce and freight shipments.
Craig said the DOT’s decision can’t be disconnected from the administration’s overall stance toward China. “You could say the decision to not grant [U.S. carriers] the number of flights they asked for is a response to the pandemic raging in the U.S., but it’s not that simple. There are clearly other political undercurrents here,” said Craig.
Previously, the Trump administration waged a three-year trade war with China until an uneasy, partial truce to ease import restrictions was reached in January. It also has ramped up export controls and scrutiny of Chinese-listed companies, and direct investments in the U.S. to prevent security-related technology transfers and potential espionage. Talks on a full-scale trade deal are on ice while the Trump administration waits to see how the Phase One agreement is implemented.
Craig said the U.S.-China relationship is going backward, and the Chinese may be willing to abandon the January trade deal in response to perceived slights from the U.S.
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