Airport congestion stunting air cargo growth

Disrupted cargo handling and congestion on the ground muted air cargo’s growth in November, with volumes falling by -1.2% in a month that is traditionally one of the busiest, in the peak build-up to Christmas. 

Last month’s fall in volumes compared to October 2021 came despite a +0.5% rise in capacity, but overall air cargo rates remained buoyant at +159%.

Capacity versus two years ago was -12%, with Europe to North America capacity down 7.3% and air freight rates for this market increasing. Any hope that the opening up of transatlantic services would offer some relief to the cargo market was quickly eradicated by increased volumes of passenger baggage.

While the congestion at several airports, notably Amsterdam and Chicago O’Hare has eased, many more including Heathrow, Frankfurt, Schipol and Liege remain massively challenged and handlers claim one of the biggest issues is cargo not being picked up by forwarders as quickly as it could be.

From our perspective weekend collections are not an issue and something that is always undertaken, when the conditions, or logistics requirements are appropriate.

We would expect November volumes to be higher than October volumes, but we started to see growth slowing down at the end of October.

This unexpected contraction is not due to a lack of demand, it is almost certainly because cargo cannot be pushed efficiently through the system, causing delays at origins and effecting the uplift of urgent air cargo.

There are also many other dynamics and variables effecting critical movements globally currently, including the continued reduction (compared to pre-pandemic) of passenger flights and local restrictions on handling and ad hoc charter flights.

COVID-related labour shortages and restrictive safe-working practices are a factor in all sectors, but it is having a particularly profound impact on labour-intensive cargo handling, with images of large amounts of cargo sitting airside at Heathrow circulating widely on social media.

In fact all modes can and are effected by the slowdown of processes: from loading to unloading at warehouses; availability of personnel at each touch point; and port/ airport productivity.

Just 18 months after IAG Cargo said it would make 500 staff redundant, it has announced that it is to hire 500 people to meet increased cargo demand. This is a situation that has been seen across the whole logistics sector, during a turbulent and unpredictable period.

The current inefficiencies on the ground, reflect the change from regular passenger arrivals to more ad-hoc freighter traffic and are incurring massive opportunity costs for airlines, forwarders and shippers, because inbound cargo cannot be collected, or exports are missing flights.

We saw the air cargo market as ‘fragile’ heading into the peak season, and this fragility is now being highlighted across social media, with pictures of countless pallets and ULDs waiting on the tarmac. And that’s without the well reported surface freight situation creating additional demand through dysfunctionality and failures.

But we are ‘dealing with it’ daily and in an agile way to ensure products and components are in the right place at the right time with the right focus!

Despite the massive challenges, our air freight team continue to find solutions for urgent and time-sensitive shipments, to every destination. 

We work closely with our global network to monitor market capacity and identify service opportunities that might benefit our customers.

Evaluating and blocking space on viable services early, is a critical factor in achieving deadlines based on customers’ requirements and expectations, including the constant recalibration of our hybrid sea/air platforms and hub services. 

Please call Elliot Carlie or Grant Liddell for insights and advice.