As Q4 begins and the off-season for ocean freight rolls around, air cargo demand continues to grow into the peak freight season. But can airlines keep up?
International Air Transport Association (IATA) General Director Willie Walsh reported in late September that “air cargo demand had another strong month in August, up 7.7% compared to pre-COVID levels,” and “many of the economic indicators point to a strong year-end peak season.”
But demand growth has no correlation with the industry’s capabilities to meet these demands.
”One of the main challenges to further economic growth is a severe global supply-chain congestion resulting from pandemic restrictions,” IATA states.
Furthermore, analysts at Bernstein have expressed that ”supply chains have been under immense pressure, transportation demand is relentless, ports are unable to cope, and a bullwhip effect continues to reverberate globally.”
Experts are predicting that the market will only normalize in the second half of 2022.
Steven Polmans, Chairman for The International Air Cargo Association (TIACA) says that air cargo is “facing a potentially record fourth quarter,” but “resourcing and capacity… handling and facility space… delivery and drivers” are all issues that need to be planned for.
As COVID-19 restrictions continue to limit passenger flights, the freight industry is unable to utilize 45% of the capacity that once came with those services pre-COVID. And according to IATA data, international belly capacity was down 38% in August 2021 compared to August 2019.
Flight cancellations and delays to schedules are only stressing out the supply chain and exacerbating the current shipping crisis. It doesn’t help that “many shippers, faced with challenges [in ocean] supply chains, are exploring air cargo to ensure customer demands can be met,” further stretching out the airline system.
So can airlines keep up with strong air cargo demand? Only time will tell.
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