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Abstract

Air freight is a crucial part of the global economy, transporting a wide variety of products from electronics to food around the world. However, the Covid-19 pandemic has caused unprecedented disruption to the entire supply chain industry since early 2020, particularly affecting air freight due to grounded flights and travel restrictions, resulting in fewer flights available for transporting goods. In this paper, I provided a comprehensive quantitative analysis of the impact of Covid-related policies on the air freight price index. I captured country-level and category-level heterogeneity of the effects of those policies to offer a detailed understanding of the dynamic changes occurring in air freight pricing. To accurately measure the fluctuations in the air freight industry, I analyzed newspaper data on air freight using sentiment analysis with Bidirectional Encoder Representations from Transformers (BERT) model. BERT significantly enhances sentiment analysis by leveraging its deep bidirectional understanding of textual context, enabling more accurate and nuanced detection of emotions and opinions in text data. Additionally, conventional datasets of supply chain or air freights tend to be contract-based, but contracts are usually fixed for years, making them unable to respond to changes such as Covid. Through my analysis, I calibrated the real-time trend of the air freight industry and provide valuable insights into the effects of Covid-related policies on the industry. This information would be useful for policymakers, industry leaders, and other stakeholders interested in understanding the impact of the pandemic on the global supply chain. The study found that the issuance of Covid related policies has negative association with the air freight price index. Moreover, the import air freight price index is more impacted compared to the export one. The implementation of International travel controls would suggest a 19.7% decrease to the average import air freight price index.

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