GLOBAL ECONOMIC DIFFICULTIES ARE A MAJOR CONCERN FOR THE AIR FREIGHT BUSINESS

The loss of belly cargo has left the air cargo industry in a rut for the past two years, combined with personnel issues, rising fuel prices, limited airspace, an increase in inflation, and a general slowing of economies throughout the world.

The Russia-Ukraine war, according to Glyn Hughes, director general of The International Air Cargo Association (Tiaca), has only made the sector's problems worse. Since the worldwide pandemic's breakout, the business has had to cope with some difficult obstacles, he said.

“While we hope for a swift end to the conflict, we anticipate the current difficult conditions to remain for the next few months at least,” he told Freight News.

“We do anticipate more favorable conditions for demand during the third and fourth quarters of the year. In addition, the continued return of international passenger demand is adding more belly capacity to the global network options.”

Hughes said global economic issues had heavily impacted the air cargo industry but fell outside of the industry’s influence.

“What we must do better as an industry is to further embrace technology and automation as staffing remains a challenge. Customers are demanding increased transparency and predictability, and we must introduce more digital solutions in response.”

Another significant issue, according to him, was decreasing demand brought on by a decline in consumer expenditure. "The rise in inflation and the higher cost of energy for homes and automobiles have had an impact on consumer spending on discretionary items, many of which are core air freight products.

“We are also experiencing difficulties in recruiting the much-needed talent to drive this industry forward, with vacancies arising in almost every aspect of the industry, from technical to commercial, from drivers to warehouse staff, from customer service to product development. Addressing this challenge is crucial for future industry success.”

Worldwide chaos has been caused by airline personnel shortages, which have forced airlines to cancel flights. Due to staff reductions caused by the Covid-19 epidemic, there are shortages now that demand has nearly returned to pre-pandemic levels.

While dealing with all the issues, Africa also faced some difficulties that had an impact on air freight, including a very high tax regime, a lack of rule harmonization, a disjointed continental approach to air cargo, and the absence of a single common trading market, according to Hughes.

“Africa has 15% of the world’s population, over 20% of its land mass, and nearly a quarter of all the world’s countries, which collectively create a multitude of borders and therefore increase complexity. A lack of consistent infrastructure is also a challenge as only a few gateways can handle today’s most sensitive cargo from a temperature-control perspective.”

While dealing with all the aforementioned issues, Africa also faced some particular difficulties that had an impact on air freight, including a very high tax regime, a lack of rule harmonization, a disjointed continental approach to air cargo, and the absence of a single common trading market, according to Hughes.

July 26, 2022

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You can find the original article at: https://www.freightnews.co.za/print-archives/airfreight-feature-july-2022/view-pdf

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