Global forwarders turned to air cargo in 2021 to overcome delays in sea freight.This has brought challenges and opportunities. According to the International Air Transport Association (Iata) report on global demand in 2021, measured in cargo ton-kilometres (CTKs), it was up 6.9% compared to 2019 (7.4% for international op er at ion s).This was despite the fact that capacity, measured in available cargo ton-kilometres (ACTKs), was 10.9% below 2019 (-12.8% for international operations). “The airfreight market continues to face new challenges. The continued trend of sea freight orders being converted to airfreight to meet on-time deadlines has added extra pressure to airfreight,” according to Denys Hobson, logistics and pricing analyst at Investec for Business.Labour shortage struggles“The real bottleneck has been at the airline handling facilities where numerous hubs have been struggling with labour shortages and storage capacity, therefore cargo backlogs have quickly built up. This has resulted in cargo missing departure deadlines or cargo being routed to alternative hubs, which increases the lead times and costs,” he adds in a logistics update.According to Iata, African airlines saw international demand grow 11.3% in 2021 compared to 2019, while there was a fall in international capacity of 14.6%. Dynamic growth in AfricaGrowth in the region is described as “dynamic for most of the year”, driven by the strength of the Africa-Asia route. In December, international demand grew by 7.6%, with international capacity falling 19.4% compared to the same month in 2019.In contrast, Latin American carriers reported a decline in international demand of 15.2% in 2021 compared to 2019, and a fall in capacity of 30.2%.North American carriers posted the strongest performance, with a 20.2% increase in international demand, and growth in international capacity of 0.2%.Constrained capacity enabled airlines to up their charges. Rates in December 2021 were almost 150% higher than 2019 levels.Iata predicts that demand for airfreight will remain strong as retailers stock up to meet renewed demand.“The cost-competitiveness of air cargo relative to that of sea-container shipping remains favourable,” adds the report.It is supported by Ti Insight, which predicts that the air freight forwarding market will see higher growth than sea freight forwarding between 2020 and 2025, with a real compound annual growth rate of 5.4%. The high growth rate can be attributed to a significant bounce back in the market and the need to swiftly distribute Covid-19 vaccines across the globe, it says.
