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Air Cargo Capacity Becoming Critical

December 3, 2017

As reported by AirCargoNews, the current air freight crisis lead to a breakdown in industries such as Automotive.

The following is an excerpt from AirCargoNews:

Problems in booking airfreight, particularly hit Europe to North American routes, along with issues on the Asia to North America and Europe trade lanes, all point to “a fractious period” for the automotive supply chain, it said.

The seasonal peak in demand for air cargo space has far exceeded traditional levels, increasing the shortfall in capacity and inflating prices. Automotive component suppliers are experiencing increasing booking difficulty on major long haul intercontinental routes. Europe to North America has been heavily affected and there are potential ramifications for US vehicle production, he argues. Additionally spiraling global e-commerce has contributed partially to the space shortage.

Airfreight prices have more than doubled in the past two months, just as vehicle manufacturers are ramping up for 2018 models.  The shortfall in airfreight capacity from Europe into North America, in particular, could have connotations for ongoing vehicle production without steadfast contingencies. It is an established practice for many suppliers to book airfreight at the last minute as demand dictates, but many of these companies are finding inadequate capacity.

IATA data which shows that demand for air cargo grew in five of the last six months, with capacity increasing at a much slower rate than is required.

Dedicated emergency logistics partners can solve some of the problems.