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Good news: We're back to pre-covid levels in terms of air cargo volumes!
As Henk Mulder, head of Digital Air Cargo at International Air Transport Association (IATA) took the presentation stage at the 7ConNetwork Virtual Networking Conference, he briefed us all on the current state of air freight. And lucky for us, it was altogether positive news.
Air cargo volumes took a dive in the first quarter of 2020, but quickly picked back up as the need for PPE and other medical devices became critical, globally. Nearing the end of 2021, we see two major drivers for the surge in cargo volumes: the global Covid-19 vaccine distribution and the e-commerce boom. It is estimated that e-commerce now accounts for approx. 20% of overall air freight volumes.
Says Mulder of the latest air freight trends: “Cargo in many cases is a life saver. It keeps the airline going. And so it's getting a lot more attention, it's getting a lot more investment and it's certainly getting a lot more priority. So we'll see how this plays out after the pandemic; whenever that is- hopefully soon. But I think there will be some permanent changes in the way that cargo is viewed from an airline perspective, which is a good thing.”
IATA statistics graph of the Cargo Tonne Kilometers (in billions) per month over the last few years:
With all the news of congested ports and delays in sea freight, air freight as an alternative is probably looking extremely attractive right now. But not all cargo is created equal.
First of all, there are specific types of cargo that are not allowed to be transported by plane. Goods like lithium batteries, fuels or oils, hazardous materials, explosives, gases and other toxic substances are too dangerous and therefore not allowed on aircraft. The next major point to consider is that, normally, air freight is significantly more expensive than ocean freight.
The types of cargo shipped by air are:
- urgent goods
- perishable food
- Consumer Electronics
- pharmaceutical products
- Live animals
- Spare parts for land vehicles and aerospace industry
- luxury products
- racing cars
When it comes to cargo types shipped via air freight, Mulder explains: “Many of [things shipped by air] are obvious- things like live animals, race horses. You're not going to put them on a ship, right? You, you fly them from one race to the next.”
So consider how urgent and/or valuable your cargo is: if the urgency/value is enough to outweigh the higher costs or if it can sit on a ship for a longer period and save you a bit of cash.
For insight on the current state of air and ocean freight rates, the 7ConNetwork Virtual Networking conference also welcomed to the virtual presentation stage, market experts Thorsten Diephaus and Michael Braun from Xeneta- the world's largest ocean and air freight rate benchmarking and market analytics platform.
The pair had much to say about the developments we have seen in the industry over the past few years. According to their data, they assert that for both short term and long term trends, the air freight market (as well as ocean) are still on an upward trend with no sign of changing anytime soon.
“Air freight is, nowadays, more competitive price-wise than it has been in the past. Where usually airfreight was 15 to 20 times more expensive than the ocean was, in this kind of record high short-term market level, it's probably only six or seven times more expensive. And considering that the transit time is far quicker, this is something where companies with higher value cargo are really looking to this kind of option in order to make their supply chain work,” says Diephaus of the trend in air cargo freight rates.
If you are looking for air freight cargo companies to handle your cargo, you've come to the right place! 7ConNetwork operates a network of experts in air freight forwarding as well as a multimodal cargo booking platform which connects you to them. To get an instant quote online for your air cargo shipment, sign up (for free) on the 7ConNetwork Shipment Booking Platform.