The Problems Air Freight Faces During Covid-19

Most of the world’s population have changed their daily habits since the outbreak of the coronavirus in 2019. It affected the work routines, hygienic habits, shopping activity, … etc.

These changes have started a chain reaction that resulted in dramatic developments in the world economy and trade. People turned to online shopping and people’s interest have changed so much in the past year. Grocery shopping went up due to high consumption since people are working from home, on the other side some other products maybe went a little down like car accessories and spare parts since using automotive have become less.

These changes in people’s demand and the economy have affected the air cargo movement directly. The travel restrictions have laid burdens on the airline shoulders, air passenger revenues have to be compensated somehow. Some airlines have reduced their flights, or even shut down some routes. Other airlines have grounded most of their fleet even and had to let go a lot of people. All of this has affected the air cargo prices. The airfreight cost has doubled and tripled in some cases.

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Covid-19: Impact on Air Freight Capacity

In the beginning weeks after the pandemic started, the international air freight declined with an average of 15% compared to the same period in 2019. In some areas, like the routes between Europe and South America. The numbers went down for almost 50%. This began to balance slowly and forced the air freight companies to take the strong measures they did. Due to all the fast and big changes happening with the air freight companies, especially when routes are being shut down or possibly narrow-bodied aircraft are used, this created too much demand compared to the supply of flights. All major international air freight routes are facing challenges. Shippers are struggling to find space, and when they find it, the price is too much which affects the end customer pricing.

On the other hand, challenges in sea freight and lack of containers, have pushed shippers to convert more business into air freight services. Therefore, space has become harder to book and prices have increased.

What This Means for the Future

With all these changes, and with more restrictions due to the COVID-19 pandemic and its developments, working from home has become the new normal. This has pushed the air freight companies towards digital services and platforms. We can see more services offered online now. The automation concept is under the spotlight with many air freight companies as it helps in saving time, saving cost, and reduce many mistakes and challenges that may occur during this fast-paced and changing environment.

It became more convenient for many customers as well to use these digital platforms. It’s an easy and fast process with few clicks and steps. It will also lead to an immediate response from the air cargo companies.

If the air freight companies are to recover from the changes and losses during the pandemic, this may take a long time. However, it has to be made with close coordination between the IATA (International Air Transport Association, The air freight companies (airlines), and the governments around the world. The balancing and recovery have to go hand in hand with the new governmental regulations around the world.

The Disruption Continues for Supply Chains

Every step in the supply chain process is strongly connected to the previous and the following one. Since usually the international air freight is used for time-sensitive products and shipments, reaction and consequences of the changes will show faster on the connected steps.

In the current circumstances we are facing now, these changes are affecting the product overall cost and the delivery times. Stock management is more challenging and maintaining final product prices is a hard task as well. Especially, for the single supplier manufacturers. Delay in any material needed in manufacturing will lead to delays in production lines and add to the international air freight challenges. It is also an obstacle for single supplier importers. They will have to stand in line and wait for their orders to be shipped while having multiple suppliers in different geographical areas will lead to better delivery times and more options that will help to overcome these hard times.

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Karim Nasser

VP at Globitex with more than 15 years of experience in shipping and transportation in Air, Sea, Land freight, and courier. Now for a couple of years, more into digital freight. I believe in a saying “ in shipping, we deliver hope not only shipments”.