Nobody in the air cargo industry is saying the COVID-19 pandemic has been good for business, but compared with the passenger side of aviation, the impact on the air freight business has been comparatively light. More significantly, the pandemic has accelerated several emerging trends, including supply chain digitization, that will revolutionize how the entire cargo segment does business.

Short-term shipping demand fuelled by the coronavirus pandemic mixed with the unabated growth of e-commerce, not to mention the congestion and capacity limitation experienced in other modes of transportation, has led to a structural logistics challenge that individual air cargo stakeholders can’t face alone. Air freight – from the airlines to the air freightforwarders on down – needs to become more unified and to operate like the integrators. But attempts at coordinating the different stakeholders have been frustratingly slow, inevitably failing to make a significant change with squabbles over who should bear the brunt of investment.

The air freight activity numbers clearly reflect an unstable year, but also provide an opening for innovative, technology-forward thinking. Pre-COVID, about 50 percent of global air cargo was transported in the belly of passenger airplanes. With the grounding of passenger fleets worldwide, that dropped down to 12 percent, but the amount of freight still needing to fly only dropped a little, according to the International Air Transport Association (IATA). Taking the entirety of last year into account, the worldwide demand for air freight fell 10.6 percent on 23.3-percent less cargo capacity.

While carriers across the globe experienced demand and capacity shortages, North American carriers seemed to fair the best, regionally: These carriers saw a 1.1-percent increase in demand in 2020 compared with 2019, but their fall in capacity was 15.9 percent. Africa stood as the only other region to witness increased air freight demand from 2019, with a growth of 1 percent, even with capacity down by 17.3 percent. Overall, improving economic conditions on the continent now mean African airlines are on equal footing with Latin American ones for international air cargo.

  • In Latin America, carriers experienced the largest regional capacity shortage, with a drop of 35 percent in 2020, when compared with 2019 figures. Demand for air freight fell by 21.3% percent. Recovery this year has been hindered by severely impacted national economies.
  • Airlines in Asia-Pacific and Europe were hit with capacity changes of 27.4 percent and 27.1 percent, respectively. Asian carriers saw a 15.2-percent drop in demand for 2020, and European demand dropped by 16 percent. Asian manufacturing output is now recovering, so 2021 is already seeing some improvement in demand, but the European 20201 recovery looks more unsteady than in other regions.
  • Middle Eastern carriers also experienced a capacity shortage of more than 20 percent, but demand dropped, year over year, by only 9.5 percent. Figures for a 2021 recovery are encouraging.

This imbalance between demand and capacity means yields and revenues have been high. Despite the release of the vaccine, globally its rollout has been very uneven and the chances of further outbreaks are significant. That means the full return to operation of all the currently grounded passenger jets, along with their vital belly capacity, is going to take a while before levels return to pre-COVID levels. IATA predicts the global air cargo industry won’t see this return until 2024.

It’s not only a lack of capacity. COVID restrictions have also impacted safe operations for flight crews, ground-handling staff, and truckers. For example, those needing to leave a medium-risk region of China need to have had a negative COVID test within seven days in order to travel, while no one can leave high-risk areas. KLM needed assistance from the Dutch government to negotiate with the Chinese to reach a compromise workaround that would still allow the airline’s freighter crews to fly into the country within a ‘72-hour bubble’ and not have to isolate for longer each movement.

The tentpole that has allowed air cargo to survive all this disruption shouldn’t be a surprise: e-commerce. With so much of the global population in lockdown, people have resorted to ordering more goods online and having them delivered. This was already a rapidly growing trend – witness the ongoing death of brick-and-mortar retail stores and the rise of Amazon and other e-retailer giants – but the pandemic accelerated that trend dramatically.

There have been some forward-thinking exceptions concerning supply chain digitization. Take Hartsfield-Jackson Atlanta International Airport. Working with Kale Logistics Solution, Atlanta launched the first digital air cargo community system in the Americas. The digital platform went live just before the pandemic hit, in November 2019, allowing stakeholders to communicate electronically with each other and with other organizations up and down the supply chain. Atlanta is mentoring other airports on how they can do the same.

The platform has streamlined the movement of information and cargo significantly. It, and similar projects around the world, demonstrate that it is possible to unite a fragmented cargo industry – shippers, first- and last-mile truckers, sea, Customs, airports, forwarders – in the same way, that integrators have done for years, by putting different entities and services behind a single interface. Atlanta demonstrates it is possible to distribute the cost of implementing such a project, as long as airports act as a neutral hub that competing companies are willing to connect to.

Additional benefits have emerged. Virus transmission on paper documents is four to five days. Being forced to find an electronic solution to prevent transmission has accelerated the adoption of e-air waybills. This has had the knock-on effect of reducing delays in deliveries where truckers would be forced to queue to hand over physical documents. In addition, track and trace have significantly improved as well.

Adversity may be uncomfortable, but it stimulates innovation. The slow pace of change before was proven to be down to mindset more than anything. When it’s forced to, the air cargo industry can change easier than it thought.


Blume Global connects air freight forwarders with their supply chain stakeholders including shippers, airfreight carriers, ground handlers and trucking companies through a cloud-based platform, a single interface that provides innovative end-to-end logistics execution and visibility solutions. Blume Global takes a modern and more holistic approach to supply chain execution, continually updating and improving capabilities so customers receive all the benefits that come from an R&D-driven organization.

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