The Soaring Success of Air Freight Industry During Pandemic & Ahead

1. The Soaring Success of Air Freight Industry During Pandemic & Ahead Revenue Technology Services

2. The Air Freight sector has seen an impressive growth in the last two years. It was surprising to register that the sector generated revenue for airlines even during the pandemic. The revenue soared to an unexpected level. Technology certainly played a pivotal role in the process. The air cargo market and air-cargo revenue management have never looked this better. The sector is expected to grow 7.9% in 2022. The demand is going to be more than ever, according to the International Air Transport Association(IATA). The growth of the air freight industry was not always this impressive. It has seen its fair share of phases.

3. Technology solutions have been instrumental in bringing about that growth air freight has seen in the past couple of years. The need for intelligent profit optimization solutions becomes a lot more imperative as the markets become more dynamic and bring about complex challenges.

4. Let’s take a quick look at the Air Freight Sector’s evolution first. From the beginning: The story started in November 1910. The first time was when air cargo carried and transported a roll of silk from Dayton to Columbus. After that, the US started using air cargoes for sending posts regularly. In almost 6-years, the airmail service made about 85% of revenue to US airlines. The early ’70s saw the technological change, where DHL and Federal express collaborated with airmail service to provide a door-to-door express package to people living across countries.

5. The technological revolution: The technological evolution brought in by delivery services like FedEx, UPS, TNT, and DHL changed the paradigm. The change was so massive that corporate giants like Amazon and Uber started using air freight, promising their customers next-day delivery.

6. The prevailing technological up-gradation was taken to another level by FedEx. The express delivery brand introduced an impressive feature of tracking. The customers were now able to track their orders via the internet. It was highly appreciated by the service users. Now they know, calculate and anticipate where their package has reached and by what time it will be delivered to them. The features encouraged the air freight industry to practice sorting, storing (in warehouses), and packaging the products. However, the penetration and significance of technology wasn’t just confined to automated and high-tech operations. It extended to intelligent solutions that could, for instance, help determine the capacity split between allotments, long term contracts and free sale. Beyond this, technology empowered the Air Freight sector in several ways.

7. The Global impact: The impact was enormous. So much that airlines across the world, especially China, started using wide-body jet aircraft to facilitate modern age freight. Now, the planes were efficient to hold more than double the weight they were to carry before. The demand for air freight continues to grow year by year. The post-pandemic era is golden for air freight service and can expect volumes to more than double by 2035. The air freight industry is flying high and can expect to touch the ground no time sooner.

8. Upcoming Challenges Which Technology Can Help Overcome Scarce Cargo Capacity and Optimal Utilization One of the biggest challenges the air cargo industry currently faces is understanding the true cargo capacity as well as capacity for sale considering passenger and cargo customer behavior. The challenge of tight capacity has mounted since Covid-19 onset. Solutions that could provide real-time forecast and outputs on flight capacities, demand, allocations and bid prices become critically important here.

9. Scarce Cargo Capacity and Optimal Utilization One of the biggest challenges the air cargo industry currently faces is understanding the true cargo capacity as well as capacity for sale considering passenger and cargo customer behavior. The challenge of tight capacity has mounted since Covid-19 onset. Solutions that could provide real-time forecast and outputs on flight capacities, demand, allocations and bid prices become critically important here.

10. Rise in Demand for e-Commerce and hence Capacity Online shopping was already popular. However, the home-confinement during the first and second wave of Covid-19, led consumers to get accustomed to the comfort of shopping at home - anytime of the day. The added facilities of same-day delivery and flexible return policies have now fuelled the demand for online buying and set on fire the rise of eCommerce. This calls for increase in scale alongside optimization of revenue and profits while meeting the high demands on a day-to-day basis.

11. Diversification of the Supply Chain The diversification of the supply chain for a variety of products, including the vaccines, calls for a greater demand for air freight optimization. Air cargo is already emerging as a prime mode of transport to ensure a wide yet smooth distribution of goods across different parts of the world. However, for diversification to happen strategically, forecast on demand and profits need to be highly effective so that expansions and scaling take place effectively.

12. Rise of Air Freight as Omnichannel Most B2C businesses, especially the ones delivering products are now aiming to provide end-to-end services to the customers. Given that, partnership between airlines and shippers are increasing. This brings about a new face of air cargo - the omnichannel air freight. As this new trend unfolds, they would like need a third leg for integrations and hence, technology plays a significant role here too. To tap on to the opportunities that this post-pandemic market presents, and to stay ahead in the competition, Airlines need a robust set of capabilities for estimations, budget and hence, the optimization in the operational efficiency and profits. For the air cargo sector, this become a lot more vital now. If you are looking for solutions that could optimize your airline revenue and accelerate profitability without breaking the banks, this is an area where we could help. Connect with us: RTS.Information@RTSCorp.Com