After seven lackluster years of flat growth, the international air freight industry leapt back to vigorous expansion in 2017 and seems headed for continued strength this year, led by remarkable rises in Africa and Eurasia. Among the biggest shippers are the world’s military that use civilian air freight carriers as key elements in their logistics planning.
I recently caught up with Akylbek Zhumabaev, the former Chairman of the Board of the Kyrgyz Republic Civil Aviation who gave me his insights as to where the globalizing airfreight industry is heading.
You think the key to continued growth in the industry of air cargo will be via next generation-technology bespoke to meet the challenges of globalization. Correct?
I do. Air cargo is a highly sophisticated business. It’s not a just matter of rolling big boxes onto big aircraft and filing a flight plan. Load factors, fuel consumption and a host of other data-based considerations go into every flight.
In a highly price-competitive world, this is what customers expect. The US military is a value-for-money buyer every bit as much as major retail organizations such as Amazon. We expect service providers to do everything possible to reduce costs and deliver on time. That requires the very latest in flight support and cargo management technology.
Is this why the industry has returned to growth? And why the big rise in deliveries to Africa? Freight demand in Africa last year was up a remarkable 24.8%.
Well, it’s not the only reason of course. There are multiple causes, including global economic recovery, rising Chinese and Indian interest in Africa, rising humanitarian aid flows, and more.
Air cargo carriage is increasingly complex. New suppliers are constantly entering the field, as e-commerce takes off. On the civilian side, governments and the carriers themselves are having to tackle major changes in shipping practices from regions such as China – particularly the shift from a few well known importers and exporters to the trend to small, individual importers and exporters that are largely unknown and oftentimes whose transactions may be irregular. IATA estimates the global e-commerce revenue for 2019 to be USD 3.5 Trillion.
From what I’m seeing, nations are starting to mix humanitarian aid with trade goods in hopes of gaining commercially from their assistance. For instance, Silk Way Airlines, an operator that regularly flies into Kyrgyzstan, last year they flew weekly flights to Djibouti from Baku with a shipment of 76 tons of food aid and water, alongside 30 tons of commercial goods. That’s a smart move by Silk Way — which happens to be a longstanding and trusted contractor to the US military. Therefore, Silk Way is leveraging its flights to Africa to further expand its commercial reach in a socially responsible fashion.
But, taking Silk Way as an example again, they’ve also introduced CHAMP cargo management into their fleet. This serves to ensure effective management of freight on multiple flight-leg operations, allowing the company to streamline loading and unloading of freighter aircraft and adjust for the complexities of centre-of-gravity considerations present in air cargo. This is something passenger airlines don’t have to worry about, with passengers of approximately similar size and weight assigned seats. But when you’re loading APCs, bags of flour and a container-load of tinned fruit, and each shipment has to be dropped off at different locations along the route, you need to know where everything should go in the hold.
What does the future hold for the commercial and cargo airline industry?
There will be new supply chains developing to meet globalizing yet localizing demand, with components being jetted around the world for assembly closer to the consumer.
Cargo carriers are going to have to invest heavily in track-trace systems and other parts of their IT infrastructure to keep up. While air shipping is certainly the fastest mode of shipping, it must also be the most reliable.
As consumer demand increases, so too will the major carriers look to facilitate dynamic supply using the innovative means made available to them.