What the future has in store: A glance at the future of Air Cargo Industry amid COVID-19

The effects of Covid-19 are evident in the pricing of cargo services as the passenger-fleet crumpled up during the early march this year, evacuating almost half of the available cargo capacity on mainly trans-Pacific, China-Europe, and Europe-North America trade lanes. The situation eventually results in the hike of air freight prices. For instance, spot rates on May 28 bounced to $12.27/kg on China-North America from $3/kg, a 340% increase within a year. And, China-Europe rates reached $11. 18/kg from $2.23/kg, a 272% increase within a year. Because of the expense of air-cargo, merchants and shippers tend to cheaper modes of transportation like expedited ocean services on the trans-Pacific, and rail service from China to Europe. 

Nevertheless, travel behavior worldwide has been hugely affected by data from location-based social networks and high-speed data from telecom. That signifies research into understanding travel behavior is not developed yet. For a better future for the air cargo industry, it is essential to increase big data in transport, revenue management, technological enhancement, and logistics, enhancing competitive advantages by consolidating shipments and optimizing freight movement. 

It has been widely reported that Boeing, the 80-billion dollar company, was compelled to shut down its assembly line due to COVID-19, which decreases the demand for new passenger jets. During May, the company reported that it would cut 16000 jobs worldwide or 10% of its workforce and reduce passenger aircraft production until the COVID situation changes. According to the report, they have already spent $4.7 billion in the first quarter of the pandemic to cope with the situation and even sold the bonds in $25 billion to shore up its finances. 

A Silver Lining for the future of the Air Cargo industry

The future of the air cargo industry now depends on the shipments of urgent Personal Protective Equipment (PPE) and pharmaceuticals, and other essential items to the Corona-affected countries. Besides, the air cargo supply chains have been well supported by e-commerce shipments that have grown strong during the lockdown. For example, the Office of National Statistics in the UK reported that online spending in April as a proportion of all retail sales increased to a record 30.7%.

Fortunately, in these unprecedented times of COVID, some strong measures are taken to ensure the soon recovery of the industry. Many companies are united for a debt-for-equity arrangement, and the air-cargo industry is also prepared to take progressive measures to keep up with the competitors. Recently, a new cargo train has been launched between China and Europe. DHL is working on to double the delivery speed and payload in two years. Amazon has also unveiled a similar ambition. Nevertheless, a major European carrier has recently set up a drone focused on monitoring infrastructure. 

Looking at the progressive measures taken by these organizations, it can be said that a better future for the air cargo industry is waiting if it uses predictive maintenance techniques, advanced demand analytics, network modeling, and participates in enhanced big data exchange systems across every part of the industry.

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