This downturn comes at a challenging time for aircraft manufacturers who have invested in developing new freighter versions of widebody jets. However, experts expect rates to continue declining in the coming year. Cargo rates from China and Southeast Asia to the United States have seen a slight increase in recent weeks. While there are some positive signals in the market, such as the slowest contraction in air cargo since February 2022, the overall trend indicates falling rates. The airline cited macro-economic headwinds that have plagued the air cargo transportation sector, causing considerable financial difficulties. The industry's challenges are evident in the case of Western Global Airlines, which recently filed for Chapter 11 bankruptcy protection. However, despite the surplus in capacity, shippers are not fully utilizing it due to weak demand. This shift in power is expected to ease inflationary pressure on high-value lightweight items, such as electronics and luxury goods, that are traditionally transported by air. Looking ahead, shippers will have more bargaining power in upcoming winter price negotiations, according to Norwegian cargo analytics firm Xeneta. This perfect storm has had a profound impact on the industry, which handles one-third of global trade by value. Pilots are leaving to fill vacancies in passenger airlines, and shipping congestion caused by the pandemic has subsided. The challenges faced by the air cargo industry are significant. This sudden increase in belly capacity, coupled with the shift in demand from goods to services, has caused a significant drop in cargo rates by approximately 33% in the past year. Now, as more passengers start traveling again, passenger planes are back in the sky, bringing back their cargo space. With passenger jets grounded, the lower-deck cargo space was utilized, intensifying the competition with dedicated air freighters. The demand for goods needing delivery skyrocketed, leading to a surge in air cargo. However, as the world reopens and consumer behavior shifts, the industry is grappling with overcapacity and steep declines in rates.ĭuring the lockdown, consumers turned to online shopping, diverting their budgets from restaurants and leisure activities. The closure of borders and disruptions in supply chains created a record demand for air cargo. The air cargo industry, which experienced a surge in demand during the COVID-19 pandemic, is now facing a significant downturn as freight rates plummet. The Impact of COVID-19 and the Shifting Demand The response from Minneapolis' mayor's office is currently pending as no comment has been made yet. It should be noted that Minnesota's Democratic Governor previously vetoed a similar bill for rideshare drivers in May, as reported by the Associated Press. In order to compete with Uber, Lyft made the decision to lay off over 1,000 employees, representing over a quarter of its workforce, and utilize the cost savings to lower ride prices. Additionally, drivers have also expressed dissatisfaction with low tip rates, which they believe stem from a misconception that they earn more from fares than they actually do.ĭata from Rakuten Intelligence reveals that Uber and Lyft ride costs have increased by 92% between 20. Many drivers argue that they are living below the poverty level. Marianna Brown, an Uber driver with six years of experience, shared her frustration with CBS News Minnesota, highlighting that, despite working for 12 hours, she often earns less than $200. Rideshare drivers have long been raising concerns about their earnings and working conditions. Struggles and Concerns of Rideshare Drivers One of these measures requires rideshare companies to inform drivers of the estimated distance and duration of both the pickup point and the entire ride before offering them the assignment. An Uber spokesperson expressed disappointment with the results of the city council's vote and criticized the overall process leading to the decision.Īdditional Protections for Rideshare DriversĪside from the minimum wage increase, the bill also introduces other regulations to protect rideshare drivers. In an email sent to its drivers, the company stated that it would have no choice but to reduce service or potentially shut down operations in the city if the bill takes effect. Uber, another major player in the rideshare industry, also voiced its opposition to the bill. In a separate letter addressed to the city council, Lyft stated that if the bill is enacted, it will be forced to cease operations in Minneapolis starting from its effective date of January 1, 2024. The rideshare company warned that the proposed legislation could lead to a significant increase in prices, making rides unaffordable for most passengers. In a statement seen by Insider, Lyft expressed its concerns about the potential impact of the bill on driver earnings.
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