The International Air Cargo Association (TIACA) issued a warning that the industry is facing unprecedented challenges to deal with expected fourth-quarter demand for air cargo services.
The air cargo industry has responded to 18 months of relentless pressure and challenges as the industry was faced with high demand for PPE, e-commerce, vaccines, perishables, and other critical cargo as economies and society went into lockdowns then reopened. Addressing this demand, supply chain partners dealt with capacity withdrawals, then capacity shortfalls as well as ever-changing travel, work, and quarantine restrictions forced upon the crew, handling staff, and other key workers.
Meanwhile, the maritime industry is facing its own issues with ever-growing port congestion, hinterland transfer delays, blank sailings, and rising costs of shipping. Many shippers, faced with such challenges to traditional supply chains are exploring air cargo to ensure customer demands can be met.
As we head towards the fourth quarter and the growing number of annual online shopping events, the stress on the system is expected to grow substantially. With states, particularly China, introducing a growing number of Covid related worker restrictions which are unlikely to be lifted in the near future, the industry is urged to commence preparations urgently. Such restrictions are causing cargo to be disbursed across neighboring countries and airports, causing further challenges. Shippers are therefore encouraged to work with forwarder partners to secure required capacity as early in the cycle as possible.
Governments are urged to fast-track ad hoc charter permits and consider supporting 7th freedom regimes where they are being implemented. States are also urged to work with industry representatives to identify in advance potential system blockages in order for them to be addressed before they further impact supply chains. Supply chain disruptions are already being experienced in certain markets and the situation is projected to worsen.
With international passenger demand still significantly below pre-covid levels, global connectivity which air cargo traditionally relied upon for around 45% of total capacity continues to be dramatically reduced. Meanwhile buoyant domestic demand in some key markets has resulted in some aircraft previously dedicated to cargo-only operations being reassigned to address domestic passenger needs. This will create further operational challenges with freighter networks currently operating at unprecedented levels of efficiency, utilization, and optimization.
The industry must also adopt efficiency tools such as enhanced data sharing as a matter of urgency. Contingency plans must be established to deal with all eventualities that may arise. The key to success is planning and communication.
Steven Polmans, TIACA Chairman commented “TIACA’s membership is drawn from all sectors of the supply chain and we are hearing concerns expressed by each sector. Air cargo has played a vital role these past 18 months and is facing a potentially record fourth quarter, but planning must start now. Resourcing and capacity will be issues, handling and facility space will be an issue, delivery and drivers will be an issue. We should be proud of the innovative, agile, and flexible approaches adopted by the industry these past 18 months and now we must equally rise proactively to these new challenges as the weight of customer expectations mount.”
