Against a backdrop of continuing market uncertainties, standard Air Cargo volumes in January 2022 recorded a modest 0.1 per cent increase in chargeable weight compared to the opening month of last year, according to the latest industry analysis by CLIVE Data Services. Also, volumes were on a par with the pre-pandemic January 2019 level at +0.2 per cent. Further, cargo capacity in January 2022 (compared to January 2019) was down to four per cent and up by six versus January 2021. Cargoflash continues to measure performance and provide a meaningful assessment of its significance as the Air Cargo industry enters a new year. Also, we look into a few traits or practices that may emerge as prospective trends.
At the beginning of 2022, we witnessed more trends and aviation disruptors, including 5G concerns in the U.S, extreme winter weather conditions impacting flight schedules, and Chinese New Year, which began two weeks earlier than in 2021.
1. Omicron to impose impact on capacity
With the new omicron variant transmissible and more resistant to existing vaccines, the rise of this new variant will keep capacity tighter for longer, and thus keep rates higher for a longer period in the global air cargo industry. It is observed that potential future variants will likely continue to restrict network throughput due to safety protocols, infections, and variations in India and worldwide. Secondly, new variants are likely to delay a return to pre-pandemic international business travel (or international travel in general), which means that the complete return of belly capacity will get pushed out.
2. ‘Preighters’ set to stay and rise
Preighters to continue playing a pivotal role within the supply chain in 2022. One may ask whether there had been decline within the number of ‘preighters’ operating within the Air Cargo charter market since airlines began resuming their passenger service schedules. There remains a powerful, ongoing demand for preighters, and one shouldn’t expect that passenger capacity will come back to the market that quickly. There are still too many local, regional and global COVID-related restrictions in situ, which makes it very difficult for people to travel. Also, not that much additional or new ‘pure’ freighter capacity has been scheduled to enter the market this year, so ‘supply’ is probably going to more or less remain where it's now.
3. E-commerce to penetrate and factor in further
The E-commerce segment has been witnessing good growth over the previous couple of years and has been showing no signs of slowing down, globally. The pandemic further brought fundamental and long-term changes within the way people make their purchase decisions. Its accelerated the industry’s growth within the country as historically offline shoppers also downloaded E-commerce apps onto their phones to buy from within boundary of their four walls. E-commerce will drive and push ad-hoc and programme charters throughout 2022. On top of this, we all know that COVID will still influence the demand side for charters. These observations are per those of other brokers and air freight professionals.
4. Automation and digitalization
Logistics companies rapidly evolve and adapt agile cloud-based platforms to prepare their daily interactions in the Air Cargo market. These solutions provide a unified online hub to attach service providers, clients, and 3rd party contractors from different parts of the world. This helps archive the conversations over the cloud for easy access, anywhere and anytime. The COVID-19 pandemic and also the worldwide lockdowns affected business badly, and since then, more companies are implementing digital collaboration solutions to exchange traditional communication methods. Amid the COVID-19 crisis, the worldwide market for Digital Transformation Spending in Logistics estimated at USD 45.6 Billion in 2020, is projected to achieve a revised size of USD 75.5 Billion by 2026.
5. Sustainable solutions and green logistics to surface
The interest in achieving sustainability will keep rising in 2022 since sustainable supply chain logistics are under the microscope for multiple years thus far. More logistics companies are adapting to eco-friendly solutions and green technologies to acquire a balance between financial growth and environmental care. Looking forward to information technology tools helped shorten the driving time, thus reducing CO2 emissions. Simultaneously, electric delivery trucks and vehicles started taking up the place of the old fossil-fuel-operated ones.
The opportunity ahead for Air Cargo Industry in India and globally is tremendous, during this year and ahead. There'll be rate and volume increases in standard cargo further as E-commerce packages. With more digitalization and transparency, 2022 are a year where passenger airlines will still increase flights, as many people want to induce away to travel the planet again. Those extra flights are opportunities for airlines looking to still grow their volumes and their cargo revenues each year.