Flying back to certainty?
Air cargo volumes have faced challenging times over the past year, as Covid-19 and Brexit have ravaged supply chains. The air cargo industry however, has come back from the brink of chaos, all thanks to a range of technologies and new approaches to challenges. Michelle Mooney speaks to Manuel Pizarro about the success of air freight in uncertain times. This is an additional story to our Air Cargo special in the August issue of Logistics Manager which can be read here!
How drastically have air cargo volumes changed over the last year since the pandemic?
“ZØR’s worldwide presence enables us to feel the changes and comprehend the need for companies to adapt and innovate in order to find answers. The two biggest shifts were the increased demand and the more common supply chain disruptions.
According to data from IATA, there was an increase of about 9% in relation to pre-crisis levels (February 2019) of air cargo volumes, which enhanced one of the main challenges for air cargo – the ability to find sufficient capacity. All regions, except Latin America, saw an improvement in air cargo demand compared to pre-Covid-19 levels and North America and Africa performed the best.
Additionally, supply chain disruptions and the resulting delivery delays have led to long supplier lead times. This usually means that manufacturers need to use faster air transport to make up for lost time during the production process.
Consequently, air cargo companies must find solutions which will permit more capacity at higher delivery speeds.”
What emerging trends are you seeing in response to consumer demand?
“Previous predications that highlighted declining air passenger numbers and increasing air freight demand, have been propelled by the pandemic. The increase in e-commerce and consumer demand for global products, in parallel with the deceleration of passenger flights around the world, resulted in planes/flights that were meant for passengers to be used as cargo planes/flights.
The crisis capacity crunch came as passenger flights plummeted and the ensuing scramble to transport pandemic payloads saw the deployment of hundreds of passenger planes as freighters, known as preighters, took off. Pioneering Portuguese charter operator Hi Fly led this trend and was the first to convert an A380 for freight, taking out the majority of seats to provide more cargo capacity.
However, the ongoing drastic downturn in travel means the loss of a lot of capacity in passenger aircrafts and while freighter aircrafts are still present and working hard, fleet growth takes time, so there will be a slower response to replacing some of the capacity lost from the passenger side of the industry.”
What is the industry doing to improve its sustainability credentials?
“CO2 emissions from commercial aircrafts are expected to triple by 2050, with passenger air travel and air freight increasing worldwide. This information cannot be neglected and all organisations, including ourselves at ZØR, must work together, transparently, in order to improve our processes.
To avoid environmental collapse and combat “flight shame”, airlines are looking at various ways to reduce their carbon footprint and ensure that air travel is increasingly sustainable:
- Use of biofuels – Some airlines and airports are already starting to use aviation biofuel, which reduces in-flight carbon emissions by up to 80%. The problem is that, for now, this type of sustainable fuel is four times more expensive than traditional aviation fuel – kerosene.
- More modern planes – In addition to replacing the fuel used by aircraft, airlines are also in the process of renewing their fleet to “retire” less fuel-efficient aircrafts.
But the responsibility does not lay only upon the industry – the population must also make some adjustments. Business travel, for example, can be replaced by video conferencing. It is also possible to use other, more sustainable means of transport, such as train or car, for short journeys. Choose direct flights, even if more expensive, as they are more efficient, including in a fuel consumption point of view.
At ZØR, we need to know these credentials well, in order to respond more knowledgeably to the solutions that will be used and to be able to provide more adequate answers to these challenges. We all have to be more responsible in these solutions!”
How is the air cargo industry transforming the way logistics operations take place?
“In general, the air modal is used to transport cargo with high added value, urgent or extremely perishable. An efficient logistical transport does not only take into account the costs of the operation, but also a delivery with agility and security, within the established deadline. At ZØR, one of our biggest efforts is to balance all these components – urgency, safety, and agility – when coming up with solutions.
When it comes to safety, the air modal is unbeatable, as it presents the lowest number of losses and damages. Due to transport safety, it is not necessary to use heavily reinforced packaging. In this way, the cost of the input is lower, in addition to facilitating product loading and unloading operations.
The agility of a transport mode is based on the transit time, which is the time interval spent when moving a good between the pick-up point and its destination, and as agile modes of transport go, air cargo is simply on the top of the list.”
What sorts of technologies are emerging?
“Improved technology has also increased productivity in the supply chain, minimising costs and errors. These advances benefit all areas of the logistics industry: trucking transportation, international transportation, supply chain management, and shipment tracking.
ZØR has actually recently contributed to the industry with a new technology – the e-Kool Smart Cover PCM. It is a thermal cover with impregnated Phase Change Materials (PCM’s) that maintains a temperature range of -12ºC to -21ºC / 0 to 2ºC / 2 to 8ºC and 15 to 25ºC for several periods and has a much higher thermal performance than a conventional blanket. The cover also has a built-in monitoring system that allows temperature control and geo-location during shipments.
The combination of the materials used with the design of the cover, and with the monitoring systems implemented, results in an increase of capacity (more than 1000l), in 70% less weight, in an assembly 5 times faster and in an height-adjustable solution, in comparison to traditional thermal covers. Additionally, this combination not only makes the solution stable and effective for extreme thermal profiles that are characteristic in cross-dockings (plane scales between controlled environment and cold rooms), but it also makes reverse logistics possible.
Designed primarily for the pharmaceutical industry, it can be used for all temperature sensitive products. The innovative nature of the design underlying the development of the blanket has led to a patent registration process, which is currently underway.
This is an example of the technological innovation that companies must develop nowadays – more effective, more advanced and more sustainable for everyone.”
How is digitisation being used to transform air freight?
“The effect that technology has had on industries all over the world cannot be understated. Its influence is prevalent and has transformed the way in which companies operate, as artificial intelligence (AI), automation, and Big Data begin to take hold. The air freight industry is certainly no exception.
The air freight industry is on the verge of vast digital change, driven primarily by the shifts in consumer and supplier demands. Everyone is demanding more of logistics providers, especially with regard to the speed and frequency of deliveries. As a result, air cargo companies are expected to deliver packages faster – and with more accuracy – while keeping costs to a new competitive low. Technology is helping to transform freight forwarding in several different ways, from robotics and automated systems to augmented reality, drones, Big Data and AI.
The air cargo industry is gradually embracing a technology revolution that includes moving from substantial use of legacy mainframe systems to more customised systems to improve its efficiency and transparency. The latest advances in technology allow air cargo systems to streamline operations, reduce costs, and optimise efficiency. For example, by leveraging e-freight technology, companies can take the ‘paper’ out of air cargo and replace it with digital data. The air cargo industry can also invest in the design of a modular data platform to enable seamless global data sharing.”
What is next for air cargo?
“The fallout of the Covid-19 pandemic shook the aviation sector to its core. The economic crisis and travel bans and restrictions have severely hampered international transportation and the global air freight industry. Data from the International Air Transport Association (IATA) shows that global volumes and international cargo are significantly lower than in 2019.
Despite the apparent decline in numbers, the jet cargo industry is showing signs of steady recovery. It is safe to say that, from an economic point of view, airlines with cargo-diversified revenue streams are surviving and have managed to avoid the worst of the pandemic.
The pandemic has been broadly destructive for the aviation industry. Still, it has contributed to accelerating the global transition to e-commerce, which is set to benefit the cargo transportation industry for the foreseeable future.
While e-commerce was already on an uptrend even before the pandemic, it has risen faster than anticipated due to recent changes in consumer purchasing behaviours. According to data from IBM’s U.S. Retail Index, Covid-19 hastened the shift away from physical stores to digital shopping by, more or less, five years.
The air cargo sector is demonstrating impressive flexibility and adaptability in handling the challenges and repercussions of Covid-19 in the industry. Still, from a vantage point, the future of global air freight service seems bright, and all set for growth.
The pandemic has opened new doors and opportunities for cargo. As the demand for specialised freight services and e-commerce rises, global trade will eventually regain its foothold. And the cargo industry will fly high again….”