Status of global Air freight services
As the world slowly moves to normalcy after the pandemic, global businesses are resuming their trades and services. As a result, air freight have seen a steady increase in demand. According to IATA, international demand for air cargo was 9.4% more in May 2021 than in May 2019.
Businesses and customers choose air cargo because it is steady, authentic, and economical. In the past year, it has been clear that they are trying to cater to a variety of use cases. This allows the airline to continue making revenue when the sales are low. Airlines all over the world are integrating new technologies like AI to efficiently manage their systems and provide more efficient services to customers.
What was the impact of the pandemic on Air freight services?
Many airlines catered either to cargo transportation or passengers in the pre-pandemic world. Several airlines, including Virgin Atlantic, Finnair, and British Airways, primarily passenger-only, have introduced air freight services. This allowed them to cater to different countries’ PPE and vaccine requirements. The well-connected network of these airlines also ensured time-sensitive cargo was delivered as and when needed, without any delays.
As a result, the air freight industry grew significantly during the pandemic. Airfreight was able to cater to time-sensitive and high-value deliveries (primarily vaccines), which would not be possible by road or sea because these modes took time and were unreliable.
As a result of these technological upgrades and the pandemic, air freight have seen an increase in demand. During the pandemic, air freight services have proven to be reliable for transportation of raw materials required for vaccine production, which further increased the demand.
Why airfreight despite its astronomical costs?
There are seven primary reasons why air freight services are chosen over other transportation methods.
- Thriving e-commerce: Many countries have seen an economic boost in the past several years. As a result, businesses have started to expand their services and started catering to international services. Between 2021 and 2026, the worldwide e-commerce sector, which accounts for around 16% of total airfreight activity, is predicted to grow at a rate of 14% per year. This growth is reflected in the increased demand for airfreight as businesses try to provide better delivery times to their international customers – which is only possible through airfreight.
- Pace: Of all the freight options available, including road and shipping, airfreight is easily the fastest method. Airfreight services allow customers to transport goods from one city to another in the shortest time possible. Furthermore, the arrival and departure time is decided well in advance. This makes airfreight the primary choice for anyone who prioritises speed.
- Versatility: Most reputed airfreight airlines have a network of bases across the globe. This allows the businesses to tap into a greater network and expand to different markets. Businesses that depend on well-connected airfreight services can access all parts of the globe, allowing them unlimited growth opportunities that are not restricted by the transportation medium.
- Time-sensitive cargo: The pandemic has highlighted the importance of delivery time and speed. During the pandemic, people all over the world have realised the importance of speedy delivery, especially when it comes to PPE kits and vaccines. Airfreight, despite its expense, has proven that it can be relied upon for on-time delivery, making it an excellent choice for time-sensitive cargo.
- Reduce warehouse expense: Many businesses relying on road and sea freight stock up their warehouses since they expect to make shipments in advance since the delivery time is higher. However, with airfreight, delivery time is significantly reduced. This allows businesses to reduce their warehouse costs by reducing the number of product units they stock up.
- Higher security: Air cargo undergoes strict inspection before transport. The cargo needed to follow strict international safety policies and be handled in the recommended guidelines to ensure it passes inspection at the customs. This benefits the business by ensuring the cargo is not damaged during transport. Furthermore, there is a lower chance of cargo being damaged during transport since the aeroplane will not face fuel loss, punctured tires, or poor weather conditions, which often damage cargo transported by road and sea.
- Lower insurance rates: Insurance rates of road and sea transport and significantly higher than those for airfreight because the cargo is in transit for longer. This allows businesses and customers to save money when they are transporting goods. This is especially beneficial for businesses who regularly transport a high quantity of goods.
What are the prospects for air freight in the long term?
As shown by the pandemic, air freight is a necessary and reliable mode of transportation. This, as well as the seven benefits highlighted in the article, show that we can expect a continuous rise in airfreight in the post-pandemic world. Logistics companies have started integrating additional air freight services in their dossier after realising it allows them to provide a reliable, cost-effective, and efficient supply chain network.