Supply chain industries continue to evolve, and air freight is becoming increasingly important. Air freight is at the center of the trends that began with the pandemic, which have the potential to change the entire cargo industry completely.
FREMONT, CA: Air freight has been a significant component of global supply chains since its inception, although being typically smaller than land and ocean freight. Global supply networks have begun to shift today, mostly due to the Covid-19 pandemic. The industry will resemble nothing as it did before the pandemic. Future projections indicate that air freight will play a substantially larger role in the total cargo transportation mix. Therefore, the following is a compiled set of developments that are influencing the direction of air cargo in the future:
E-commerce
E-commerce, a trend launched by the epidemic, is an irreversible and rapidly rising trend. The e-commerce trend offers consumers both ease and speed. They can receive their orders within two days or even overnight. Not to mention that they can shop at any time of day and without leaving their homes. As a result, traditional delivery methods have been completely supplanted. According to the IATA (International Air Transport Association), cargo demand in 2021 surpassed that of 2020, and this trend will continue into 2022 as e-commerce continues to increase demand. This is one of the logistical issues in the business environment post-Covid-19, and it will determine the future of air freight moving forward. However, it is generally believed that air carriers, shippers, and customers all profit from this.
Scarce air cargo capacity
There has been a significant decline in air cargo capacity since the pandemic began. Since land and ocean transport capacities were at capacity, the need shifted to air cargo. This is mostly due to the shift in customer shopping behavior. In addition, production levels have reached an all-time high. The PMI (buying manager's index) indicated a clear upward trend, and the resulting economic expansion is ongoing. However, this also marked a moment when air freight became more expensive for customers, and it is still essential to calculate air freight costs on time. The demand for air freight has led to the retrofitting and production of additional cargo aircraft. For instance, Boeing began converting their passenger aircraft into cargo airplanes. These indicators indicate that e-commerce and the wider economic recovery are long-term tendencies.
Supply chain diversification
Diversification of supply chains is already increasing as the economy recovers. Globally, businesses increasingly rely on air freight to distribute commodities. Already, regional air cargo is establishing itself as an established mode of transportation. However, businesses should familiarize themselves with freight forwarding just in case. Air cargo will be the dominant means of cargo transportation in the near and medium future. And with the rise of e-commerce and its seemingly unstoppable growth, the long-term outlook is excellent, with increased prospects. All of this suggests that supply chain diversity is a growing trend that will be crucial in the future. Globally, the tendency is already well-established despite its slow rise.
