The situation in China around the coronavirus also has an extreme impact on the German logistics sector. Quick Cargo Managing Director Stephan Haltmayer explained to the press what effect the virus has on his own company.
Air freight transports to China account for 38 percent of our total air freight export volume in terms of tonnage at Quick Cargo Service. In import, it is 40 percent. At present, many trucks in China stand idle, the freight remains in the warehouses and thus causes costs which our customers are naturally reluctant to bear. Many of them do not even want to have their freight flown to China if they can afford it. No freight means: no business for us.
Others are desperately looking for freight space and have no choice but to pay the extremely high rates that have been created by the shortage of capacity. Far more than half of the capacity available before the Corona crisis is gone; at present there is far too much freight for far too little freight space. There are carriers who charge EUR 6 per kilo for shipments for which they previously charged just under EUR 1. We are in the fortunate position of being able to offer our customers freight space to China at all.
But it is absolutely not the case that we forwarders earn our money. We are now balancing the business that broke away from us in January. The first half of January was traditionally little business because of holidays, then came the usual lull because of the Chinese New Year on January 25th, which causes our export business to China to collapse days before, because our customers are not interested in their shipments being left in warehouses in China after landing and incurring costs because the whole of China is on holiday.
Then came the Corona crisis, the holidays were extended, and as a result, local supply chains often still do not work. It is therefore possible that even the freight that we can fly out of China cannot be transported from the airport by truck. Moreover, up to 90 percent of our exports to China are paid for in China. Due to the extended holidays, many banks are closed and payments from China are delayed. We have to continue to make advance payments, as the Cass accounting system collects the previous freight costs from us. This will also affect our cash flow.