January 27, 2022
As Air Demand Flies High, Partnerships Create Tailwinds for Shippers
In a recent webinar, Flexport EVP and Global Head of Airfreight Neel Jones Shah asked participants if they expect their 2022 air cargo volumes to go up, hold steady, or go down. Approximately half said they expect volumes to go up.
The answer isn’t too surprising. Consumer demand for international ecommerce goods remains high. Ocean-to-air conversions are becoming a more popular way to circumvent the congestion at seaports around the world.
As companies address their current modal mix, let’s take a look at how the air freight market is developing new ways to meet demand.
Air Market Recovery
While demand for air rises, the market is still dealing with the impacts of Covid-19.
Initial pandemic effects pulled massive amounts of capacity from the market with the grounding of passenger flights removing belly space. Around 40% of that capacity is still grounded. Now, the Omicron variant wreaks havoc on crew availability, disrupting schedules.
Two years after its start, the pandemic qualifies as the longest-running crisis the industry has experienced.
Trends to Watch
As a result of these impacts, market restructuring is underway. Shippers are encouraged to stay on top of these trends to help ease logistics challenges.
- Ecommerce companies are building their own airlines, which may create opportunities for additional market capacity on backhaul segments.
- Ocean carriers are working to create continuity with air partnerships, which will drive a more holistic view of logistics booking across modes.
- More airlines are investing more in cargo solutions to help recover from the catastrophic impacts of the pandemic on passenger revenues.
And with the present crunch, one way to improve your access to capacity is to partner with networks that offer dedicated space. Accordingly, Flexport has recently announced a new partnership with Atlas Air to expand its network with a fleet of widebody freighters.
Strategic agreements like these will characterize the future of air freight. As more cargo takes to the sky, the right partnerships can help overcome industry headwinds.