“Air cargo, a most affected
service commodity under the COVID-19 pandemic, is facing
unprecedented challenges ahead,” Keshav Tanna, Director at Links
Forwarders Pvt. Ltd. (Mumbai India), told FlyingTypers.
Keshav, who also devotes much time and effort
to FIATA as an Extended Board Member & FIATA Chairman - Airfreight
Institute (AFI), declares:
“Airlines are bleeding, and airport
cargo terminals are congested with uncleared cargo.
“Customs are working at skeletal capacity
in many parts of the world and the highly time-sensitive nature of airfreight
shipments is making the situation challenging.
“Capacity depletion during the past
months is close to 45 percent as airlines have been grounded and belly
capacities have disappeared overnight.
“Freighter capacities are being utilized
to the fullest on routes that can afford the rocketing freight rates.
“Until very recently, many airlines
would have bumped off cargo in order to accommodate passenger baggage.”
Nets Cargo Freighters?
“Now airlines are compelled to replace
passenger seats to accommodate cargo, and it may have born some new language
as aircraft become ‘P’reighters?
“One would think, why not a combi
situation on the same deck, as long as a piece of cargo is safely transported
from origin to destination and is delivered safely to the end customer,
freight does not care where it sits!
“Plus, a flight attendant in a haz-mat
suit will not be required during the flight!” Keshav smiled.
How trade will move in the near future,
and which economy will normalize first, is anyone’s guess.
“Aviation without surface connectivity
“Hence, how governments are preparing
to phase out local lockdowns and return to near normalcy will have a huge
role to play in the allocation of current knee-jerk capacity placements
into more permanent ones.
“However, the biggest question mark
is which trade lanes will pick up first, and whether airlines and the
entire industry would be geared to move in that direction and how quickly,”
Must Accelerate Readiness
“Freight forwarders pride themselves
as being the most versatile of the lot, hence we must be quick in adapting
to an ever-changing market.
“Airfreight transports essential commodities
such as pharmaceuticals, vaccines, medicines, and various perishable and
non-perishable food products amongst others.”
“Airfreight has always played second
fiddle to the passenger travel business as well as the massive ocean freight
“We have already seen ‘cargo
in the cabin’ (CIC), but considering the urgency of shipments which
can be expected in times to come, are we ready to service customers who
unlike earlier times might want to choose the airfreight option first?”
“Historically,” Keshav declares,
“ocean freight has carried 99 percent of EXIM cargo in volume terms.
“Is airfreight poised to see itself
transform to a larger piece of the pie?
“The answer, to me is a definite,
Forwarders to Think Smart
“Once trade picks up and economies
creep back to normalcy, airfreight could become the first choice for certain
sensitive and perishable commodities, if the price is affordable.
“Even the current freighter capacity
could prove to be insufficient.
“Just like our airline colleagues’,
forwarders need to be in a state of preparedness to decongest piling warehouses
as swiftly as possible.
“Like the airlines, many of the forwarders
have either downsized temporarily or cut overhead to the minimum.
“Some now find themselves in a state
of limbo as there was and perhaps is no clear vision in sight.
“All this could change swiftly.”
Can Lean in Here
“Governments worldwide should consider
such initiatives to protect their vital export sectors during this unprecedented
period of reduced air cargo capacity, and to recognize that each outbound
aircraft provides similar in-bound capacity.
“This provides a multitude of options
for governments, international traders, forwarders, and airlines to work
in unison to ensure commercial air cargo efficiently utilizes available
capacities in a cost-effective manner.”
“One very important issue that COVID-19
has brought to the forefront is that of finance.
“Freight forwarders will need to exercise
extreme caution in how they finance their customers going ahead in these
unpredictable times where shipments are lying uncleared for weeks on end,
orders are cancelled, shipments are abandoned as ancillary charges have
mounted, and so on.
“The cost of doing business is no
doubt going to increase and forwarders might need to realign their charges.
“Customer segregation for credit lines
could be a way ahead.
“This is an individual call each forwarder
will have to take for themselves,”
Keshav Tanna said.