Why more and more products are transported by air (and how freight rates will change in the future)
Home » News » Why more and more products are being transported by air (and how freight rates will change in the future) February 13, 2022
Companies have turned to air freight due to a lack of transport capacity.
Last summer, as the maritime supply crisis worsened, a cargo plane in Italy was quickly filled with thousands of lipsticks. They were heading to the United States on a tight deadline.
Mehir Sethi, CEO and founder of California beauty brand True+Luscious, says she’s relied on the expedition for years. She had always been trustworthy.
But to get 15,000 lipsticks on time to their customers, their only option was to pay to ship them by air.
“To my great sorrow, we had to do this for two urgent shipments; these were products that were already reserved for retailers,” he says.
The lipsticks came in at a loss for the company, but she says it was worth keeping the customers.
© True + Luscious
Mehir Sethi had to lose money to ensure orders were fulfilled.
Businesses have made thousands of decisions like this over the past few months. Yes no sign of what will change again.
“We’ve been using a lot of air freight, which isn’t exciting, but it’s necessary with the challenges we all face,” said David Bergman, chief financial officer of activewear brand Under Armour, during of a conference call in November on the company.
Eastman Chemical Company also said it uses air freight to ship specialty plastics.
A US Census Bureau service called USA Trade Online, which tracks the flow of goods into and out of the country, notes that in the first 10 months of 2021, 78.900tons auto parts were shipped by air from Asia to don’t you knowice creama staggering increase from the 3,000 tonnes shipped during the same period in 2020.
Shipping goods by air has always been expensive. Corn now it’s more expensive than ever.
Airfreight costs from Asia to North America “have reached levels I have never seen before, we$15 per kilobewhich is incredibly high,” says Greg Knowler, Europe Editor at trade journal from IHS Markit.
Delays affecting shipping are partly to blame, but so is the huge drop in passenger flights since the start of the pandemic.
increase in demand
More than half of all air cargo in the world typically travels in the holds of passenger aircraft. But with much less space available, airlines they made an effort to transform passenger planes into freighters and to recover old models obsolete.
AirBridgeCargo Airlines, a subsidiary of Russian air cargo specialist Volga-Dnepr, is bolstering its fleet with six more planes after what commercial director Alexey Zotov called “a busy season we’ve never had before”.
Airport delays have “piled up like a snowball since the start of the fall”, he adds.
Some airlines, such as Air Canada, have also put cargo planes into service earlier than expected, even before could finish painting them in some cases.
Manufacturers, including Airbus, have been inundated with requests for convert older airliners to carry more cargo, just to get extra capacity in the sky. The process includes removing passenger seats and installing larger doors.
Orders for Airbus airliners converted to freighters dried up over the next two to three years, says Crawford Hamilton.
“We see a lot of people buying these conversions, they’re sold out for the next two or three years,” says Crawford Hamilton, head of cargo marketing at Airbus.
“It’s something we weren’t able to say two years ago,” he adds.
While airfreight represents only about 1% of the entire freight market in terms of volume, its value is e35% of total.
Sometimes expensive products like consumer electronics and fashion items that have a short life in the market are shipped by air. Additionally, during the pandemic, planes carried countless loads of vaccines and personal protective equipment.
Airbus has also launched a new air cargo service using its fleet of five BelugaST aircraft, also known as flying whales thanks to its enormous fuselage.
The question is whether demand for air cargo will remain strong, even if the pandemic recedes.
With many aircraft constantly being converted to carry cargo and the supply of this type of cargo increasing, Robert Mayer –from Cranfield University– he wonders if habra too much capacity on the market in five years.
Airbus has just launched the A350F to meet anticipated demand from cargo carriers.
Yet aircraft manufacturers seem confident. Airbus expects demand to increase of dedicated cargo aircraft in the coming years, and has just launched the A350F in anticipation of this.
It can carry as much cargo, in terms of volume, as a Boeing 747, but it is 40% more fuel efficient. This is achieved in part through the use of lighter materials, composites and titanium in the body of the aircraft.
Boeing is also optimistic. It predicts that the number of air freighters will increase by 60% worldwide by 2039. If this projection is confirmed, manufacturers will have to build 2,400 new freighters by then.
Tom Sanderson, Boeing’s director of product marketing, said it could introduce a freighter variant of its latest jumbo jetliner, the 777X, but it will take “several years” before it enters service. .
Sustainable development and environment
More cargo could be transported by air in the years to come, but this could lead to an undesirable increase in greenhouse gas emissions unless aviation becomes greener.
Both Boeing and Airbus are testing ‘sustainable aviation fuels’, including biofuels from renewable sources which can be used in existing aircraft in place of fossil fuel-based propellants.
DHL has ordered 12 electric planes from Eviation.
It is also likely that the small electric planes become more common. For example, DHL Express has ordered 12 all-electric aircraft from Eviation.
Besides the prohibitive cost, one thing that deters Sethi from using air freight more often to transport her beauty products is the environmental impact.
“I certainly wouldn’t appreciate the increase in our carbon footprint as a business if we had to rely on air travel,” he says.
Like many others, he is rethinking his reliance on global supply chains. Therefore, he decided to source some of his products from closer suppliers, to avoid future shipping issues.
“Some of the orders we used to place with our Italian manufacturer will now go to our New Jersey manufacturer,” he says.
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