During the COVID-19 pandemic, air travel reduced by 97%. We have spent the last 12 months being asked to stay at home, only travel for work if it’s absolutely necessary and avoid spending time with people outside of our homes. It would seem logical then to assume that the air industry, which encompasses passenger flights and movements, would be impacted in some way. But the severity of that has become a topic of much discussion. Why has the pandemic so harshly impacted the air freight industry? And how may this impact us moving forward?
Supply-and-demand
When the international borders closed on non-essential travel, business travellers and holidaymakers saw all of their pre-booked flights cancelled. This saw a very steep decline in travel from April and ongoing right throughout the entire year. While this had a significant impact on those travelling for pleasure, the grounding of aeroplanes on a worldwide scale has also put a stop on freight movement. An approximated 50% of air freight generally moved throughout trade is done so on passenger planes – increasing to as high as 80% in some industries.
Bringing the world’s airlines to a halt has increased demand and reduced supply. The few aeroplanes that are travelling internationally are now doing so with limited capacity and increased shipping fees as a result. This is particularly relevant to businesses sourcing and shipping products from mainland China. The prices being recorded are now in excess of all of those noted over the past 5 years – presenting significant financial implications to businesses and especially smaller ones.
PPE
Alongside supply-and-demand, the pandemic saw a significant increase in the need for PPE across the world. Back in April, it was reported that UK doctors were finding it increasingly hard to get their hands on the kit desperately needed to treat the sickest patients. The reasons for this were numerous – production didn’t meet demand, freight movement prevented it from reaching the right places and businesses capacity for manufacture was limited. And for the air freight industry, this meant that PPE was prioritised as a health requirement, taking dominance when it came to filling capacity. For people shipping other items internationally, they continue to be bumped down the importance list and, as a result, are seeing significant delivery delays.
As we move into 2021 and the world starts to try and get back to some form of normality, we hope to see airways opening back up and this very specific disbalance of demand-and-supply to find some form of stability. Our teams here at Radius and Warehouse Logistics continually stay on top of the ongoing state of the air freight industry and use this to support the needs of our clients.
If you have any queries regarding air freight and how the current situation may impact your logistics, our teams are on hand to provide advice and recommendations. Please feel free to get in contact with us today.
