The air cargo capacity challenge
Air freight has been hit particularly hard by the spread of COVID and the more recent Omicron variant, with governments shutting down routes at short notice and schedules in disarray as flight crews and ground staff are unavailable because of infection, or quarantine.
The most significant and topical example of the impact of Omicron, is Cathay Pacific’s recent decision to suspend long-haul freighter flights altogether and while it has since resumed US cargo services it does not expect to be running freighters to Europe before March, this year.
It is developments like these, that make finding and booking air cargo space and getting time-critical consignments to their destination on schedule so very challenging.
Passenger aircraft grounded and country borders closed worldwide, was the initial reaction to Covid-19, halving global airfreight capacity as passenger belly-hold space disappeared in a few days.
Capacity went very rapidly in 2020 and our air freight team had to work quickly to try and find solutions for the desperately needed PPE (face-masks, virus test kits, gloves, goggles, and protective suits) that was sourced from China.
Demand was exploding, with converted ‘passenger freighters’ and charted freighters helping to meet demand from government, public-sector and industry customers.
The need to find flexible solutions over the last two years has widened our portfolio of airline partners and the use of multiple carriers across different routes and hubs, to give us many more options, which continues today.
By adding more airline partners, we can enhance our customer solutions by, for example extending cut-off times and adjusting transit times to meet specific requirements.
In the fourth quarter of 2021 we were heavily engaged in securing main deck freighter space for automotive clients, who’s stretched supply chains required premium solutions, even for larger shipments.
That search for main-deck, wide-body and effective charter options, continues, as all time-sensitive options are evaluated and recorded for future access.
SEE THIS BBC REPORT; The scramble for cargo aircraft as shipping costs soar
Even before the Omicron variant spread, some industry pundits were suggesting that it might be 2024 before passenger numbers, travel sentiment and long-haul belly-hold capacity returned to pre-pandemic levels.
Omicron has and will impact flight networks and therefore supply chains, and the passenger side is far from normal, which means tight capacity through 2022, with limited solutions for the cheaper end of air freight and while it is very challenging, we will find capacity for the most urgent shipments. This is without considering the Chinese market which is still very much ‘closed for travel’ on a global scale and looks unlikely to open up any time soon with the zero-COVID policy approach taken.
Looking at seasonal trends, it is likely that both the first quarter and second quarter of 2022 will remain challenging with rates elevated, though the third quarter may see an easing of the situation, before the peak season ramps up again mid-September.
Travel restrictions and uncertainty will continue to limit leisure travel in 2022 and business travellers will not be back to anywhere close to pre-Covid-times, which will limit the number of flights and served airport pairs.
Normalised intercontinental travel brings back the belly capacity that is not currently available in the market and, in the absence of another COVID variant, some expect belly capacity to begin increasing during the second half of 2022.
Despite the challenges, our air freight team continue to find solutions for urgent and time-sensitive shipments, to every destination and from every origin, using a blend of scheduled, dedicated and chartered air cargo services.
We work closely with our global network, to continuously monitor market capacity and service opportunities that might benefit our customers.
Evaluating and blocking space on viable services early, including our sea/air platforms and hub services, is a critical factor in achieving the most demanding deadlines.
Please call Elliot Carlie for insights and advice on how to move your express time sensitive products globally.