Impacted by Brexit and the pandemic, the logistics industry saw an approximate 15% uplift in the volume of air charter movements in 2021.
Many expected a reduction as the world adapted to new norms, but current figures suggest otherwise.
The International Air Transport Association (IATA) reported that in October 2023 global demand for air cargo increased by 3.8% compared to October 2022, while capacity was up by 13.1% compared to the previous period.
In 2023, we saw high demand for particular types of aircraft depending on the nature of cargo being moved.
The war in Ukraine impacted the number and type of aircraft available for use across Europe and changed the routes that can be flown, increasing costs.
During busy periods, aircraft availability can still be a challenge, often being one of the major factors in the solutions offered and subsequently booked.
At Priority Freight, we charter more than 2,000 aircraft per year, providing bespoke solutions to meet customers’ needs based on factors including desired delivery time and date, the start and end points, and the size and weight of the goods.
We will always first propose general air freight and multimodal solutions, only suggesting air charter when no other solution is viable given the business-critical nature of the job.
If a client needs goods delivered to avoid either a production shutdown scenario or time penalties, they often need to rely on air charter – regardless of cost and environmental impact.
We have immediate access to all commercial airfield locations and suitable aircraft to ensure speed, accountability and value at all times.
We have an hourly dialogue with key operators and know where their aircraft are at any one time.
This gives us prior knowledge, for example, of whether an aircraft will have a space during a given leg, offering our clients predictable outcomes that they then can plan around.
Air charter is still a popular and necessary method of transport – particularly during times when traditional methods can be interrupted – so we see that growth continuing with the current socio-economic and political issues facing the world.
For example, the Red Sea disruption is currently impacting automotive production, which relies on the just-in-time (JiT) model.
Volvo and Tesla have already announced a pause in production, and we may see others follow suit, increasing demand for air charter as OEMs seek to get production back on track, including for the UK’s important March plate-change month.
What are the predictions for 2024?
JiT’s long-term future may become more limited as businesses look at other options, such as onshoring or other regionalisation strategies.
Manufacturers that had globally dispersed supply chains pre-pandemic are now looking increasingly at reshoring due to geopolitical uncertainties, sustainability pressures and a desire for greater supply chain resilience.
Others are looking at onshoring or nearshoring to work with suppliers in the same or neighbouring countries in a bid to replace strung-out supply chains.
The primary motivations behind such strategies are typically associated with cost, quality control, intellectual property protection and proximity to customers.
Current thinking points to a transition away from JiT to just-in- case (JiC) manufacturing, where companies establish their own surplus inventories of components and raw materials to better meet sudden increases in demand.
However, implementing JiC effectively requires investment in advanced technologies, including automation, robotics, and digitalisation, particularly those that can enhance traceability throughout the supply chain.
With commentators saying the disruption in the Red Sea could last for months, or even escalate to impact other routes, we predict there could be an upward trend in the demand for air charter.
Goods bound for Europe rely on ships passing through the Red Sea and the Suez Canal.
Alternatives are far from favourable; going around the southern tip of Africa adds 10 days at sea and hundreds of thousands of pounds in fuel and crew costs.
For now, the fastest and safest method of transport remains in the air.
While there are goods that cannot be transported by air, they are few in number.
Our time-critical logistics team can source transport suitable for any cargo, including large, oversized, heavy, high-value, fragile or even dangerous goods.
As it stands, the necessity for an ad-hoc charter arrangement remains.
They are often used to overcome various issues, including industrial action, weather and stalled production lines.
The increase in airfreight and air charter led many forwarders to diversify their service offering into a full end-to-end service.
However, established providers stand apart thanks to their ability to draw upon trusted and proven relationships throughout the supply chain, the assurance they can offer through international accreditations and memberships (such as ACA, IATA, WCA, etc.), and – crucially – a track record of successful outcomes.
Having an integrated customs team is also a standout requirement for many manufacturers choosing a logistics provider, even more so since Brexit.
With additional quantities of import and export documentation, having a dedicated team that works in conjunction with the logistics provider helps to keep goods flowing across borders.
Later this year additional customs regulations will come into play in the UK, starting with systems changes in March and the Border Target Operating Model in October.
Having a logistics provider that has a deep understanding of these changes, and what they mean in practise, can save time, money and reputation.
For now, much like the rest of the industry, we will keep tabs on emerging situations across the world and how these will affect the industry and, most importantly, our customers.
It’s vital that logistics providers forge even closer relations with their customers and gain a greater understanding of their stress points.
By doing this, they will be in a stronger position to provide comprehensive and cost-effective solutions.
This article was published in the February 2024 issue of Air Logistics International, click here to read the digital edition and click here to subscribe.