Understanding the future of air freight
The lines between air travel and cargo transport are blurring. What does that mean for you?
Though it may sound strange, the ‘air’ industry as we know it could quickly transform to meet global demand. And while air cargo is often behind the scenes, moving forward it may take on a new identity that melds traditional travel and global trade.
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In the first half of 2021, air cargo traffic saw its sharpest increase in the last 4 years. With both groundbreaking technologies on the horizon and new players entering the game, the stage is set for a slate of new options as the 21st century plays out overhead.
Read on to see what the future of air freight delivery means for you and how to ensure your cargo doesn’t get left in the past.
COVID IS SPURRING A TRANSFORMATION IN AIR FREIGHT
During COVID, airlines and freight carriers had to figure out how to adapt when flights were at an all-time low.
This brought with it a pressing question: how to keep money flowing in without passengers?
The answer is cargo.
Though a typical passenger plane’s cargo capacity may have been an afterthought to airlines in the past, its role came to the forefront as passengers themselves stayed at home.
Research shows that, prior to 2020, air cargo typically made up just over 10% of total profits for the airline sector. Due to the COVID-19 pandemic, however, cargo profit margins shot up by nearly 30%.
What were once planes filled with passengers en route to their next vacation or board meetings suddenly became vessels stuffed with cargo — some airlines even launched “passenger freighter networks.” Etihad Airlines, for example, used its Abu Dhabi-based passenger fleet to conduct cargo-only trips during the pandemic as a way to remain a relevant and profitable enterprise.
And with demand for cargo freight now exceeding pre-pandemic levels, the convergence of passenger airline companies with air shipping vessels looks poised to continue in the years to come.
MORE PLAYERS ARE BRINGING AIR FREIGHT IN HOUSE
If you’ve ever sat on the runway and wondered which jets served as cargo carriers, the answer was often right in front of you: either FedEx or national mail carriers like the United Parcel Service. Now, however, the landscape is changing — including both passenger carriers and e-commerce giants alike.
Today, among the top ten providers, only three are devoted exclusively to cargo. Between COVID and rising costs associated with intercontinental travel, this hybrid model has emerged as a clear winner. But that’s not the only change at hand.
Amazon contends with some of the largest shipping volumes and most ambitious delivery options in history. Not wanting to miss out on extra cash, they’re also taking air freight into their own hands.
Though the company has been building its air delivery operations since 2015, its cargo airplane fleet has nearly doubled in size since just May of 2020.
With Amazon moving more and more of its shipping in-house, the pressure is on other providers to keep up. That means getting creative, improving air freight sourcing around the world, and keeping a close eye on market-shifting global events.
DIGITAL BOOKING FOR A DYNAMIC MARKET
As with other aspects of the logistics industry, technology is shifting the status quo before our eyes. For air freight, that means an increasingly digital — and automated — future.
One prominent example comes in the rise of the ‘spot market.’
For retailers and logistics providers alike, it has never been more important to be able to react quickly. Rather than traditional contracts negotiated by companies directly with freight forwarders (and often requiring agreements for long periods of time), short-term requests are the new normal.
Research from the Boston Consulting Group outlines that the rise of dynamic booking and online marketplaces, such as reserving same-day cargo space and fully digital interfaces, has boosted many freight carriers and now makes up a significant percentage of their sales.
And while it’s likely to be several years before autonomous airplanes make a dent in the market, some companies have begun testing their own unmanned fleets. No matter how distant a prospect, it’s clear that the race to develop the lowest cost, fastest air delivery system is already underway.
WORK WITH A LOGISTICS PROVIDER THAT KEEPS UP WITH THE LATEST TECHNOLOGY IN AIR FREIGHT
From understanding shifts in your supply chain as they happen to finding the best rates and routes for cargo, it’s never been more important to have a logistics plan made for only your business.
At CBIP Logistics, we specialize in getting your goods where they need to be and adapting to market-shifting events as they occur. And we have the air plans to back it up.
We give you access to all trade lanes and create unique shipping plans just for you. Whether it’s:
- airport to airport
- door to door
- freight consolidation
- or full charter
CBIP gives you full-service logistics with an eye toward the changes that are shifting our industry and, most importantly, affecting your business. By integrating custom technology into our shipping processes, you get visibility and assurance to push your business into the future.
Want to get a full view of how we can streamline your air freight? Give us a ring or send a message today for a free assessment and we’ll be happy to connect with you.