As we are now on the winddown to Christmas retailers are becoming ever more anxious to ensure their goods will make it onto the shelves in time to meet consumer demand. With sea ports packed and companies scrambling to get space on container vessels, air freight has become a very attractive option for businesses to get their goods in on time.
As a result, the air freight sector is booming, with prices being approximately 2½ times higher than pre-pandemic levels. There appears to be a view among commentary that the sector is experiencing a permanent shift toward a preference of moving cargo by air.
There has always been a huge demand for products globally but since restrictions have eased around the world and with Christmas not far away there has been an even bigger surge. This increase in demand is struggling to be serviced by sea freight.
Sending goods by air does have its benefits. Flying goods in is much quicker when compared to any other mode of transport, typically taking just five days from east Asia to key markets in the USA and Europe. It is also safer to send goods by air when compared to sea freight. However, with that in mind it does come with a price tag. Air freight can cost up to 5x more than Road Freight and up to 16x as much as sending goods by Sea.
The Covid-19 pandemic has forced a rethink in the shipping industry. The price of shipping has increased eightfold in a year. As issues across global shipping lanes continue this results in supply not meeting demand, Air Freight prices have risen, however not as quickly when compared to Sea Freight. With that makes Air Freight an increasingly attractive option.
The bulk of air freight products are stashed in the cargo hold of a passenger plane alongside luggage. This gives a huge benefit to customers shipping by air, anywhere that travellers go by plane, cargo can follow, this opens up a huge number of routes for businesses looking to move products.
When the pandemic first hit as everyone will remember so well almost all air travel was stopped. This was a disaster for air freight customers who suddenly found there was limited space available. Demand then bred supply, nearly 3,000 passenger jets were quickly repurposed for cargo transport, with seats being stripped out.
This sort of turn around isn’t possible in the ocean industry, the equivalent being it’s not realistic to simply take cruise liners and turn them into ocean carriers. The turnaround in aircraft carriers became a lifeline as the first lockdowns began happening across the West. The main products that were being shipped at the time included masks, gloves and other personal protective equipment across from east Asian producers.
With the pressures around Christmas, purchasing managers are more inclined to pay more to ensure their product makes it on time. For many companies a two-week delay waiting for a product during peak season could be disastrous. So many big firms are already relying on air freight to ensure their goods are making it in on time for Christmas.
The key to the future of this industry is ecommerce. The Air Freight sector has clearly boomed during the pandemic, with consumers across the West becoming more used to products arriving within a few days of being ordered.
Air Freight is now becoming a crucial tool for companies that want to stay ahead of the curve – but like all things it comes with a price. If they want to stay ahead, they will need to be willing to pay for it.
At TCB Group we specialise in Air Freight shipments. We understand the importance of goods requiring a quick turnaround and especially now more than ever seeing how the industry has changed first hand since the pandemic. For further information on our processes and how we can add value to your shipping requirements contact us today!