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Nov 16,2021

Air cargo service strategy will face greater challenges

The epidemic has caused distortions in the global supply chain, which has had a huge impact on Air freight services. It has not only promoted the rapid influx and continuous shortage of capacity supply, but also promoted a sharp increase in the freight price index and a highly uncertain and unstable market demand. , Making air cargo face greater challenges in the context of the overall revival of the air transport industry. The outbreak of COVID-19 since 2020 has caused at least three distortions of varying degrees to the global supply chain.

 

For the first time, China's domestic supply chain was partially interrupted, and then began to affect the international supply chain, but this time the distortion was relatively short, and the supply chain was able to recover more quickly. However, in this process, European and American countries shouted the slogan of "replacement made in China", turning a large amount of procurement demand to Southeast and South Asian countries such as Vietnam and Bangladesh, and using this to accelerate the transfer of manufacturing investment to these countries or regions. At this time, reflected in the air cargo demand related to China, it is obvious that imports are much higher than exports.

 

The second time came from the rapid spread of the epidemic in developed countries led by the United States. The supply chain has experienced a global interruption crisis, and it lasted for a long time, but it ended up in countries and regions including Shipping From China To USA and Southeast Asia. The resumption of work and production under the effective control of the epidemic has ensured the relative fragility and stability of the global supply chain. The procurement needs of European and American countries and the pace of manufacturing transfer have not changed much; the third time originated from large manufacturing countries in Southeast Asia (such as Vietnam) and Europe and the United States. The superimposition of the peaks of the epidemic caused total blockage from production to logistics, and the intertwining of inflation and imbalance between supply and demand, forming the buds of the global economic crisis.

 

Air freight services

 

At this time, European and American countries can only quickly shift their procurement needs to the Chinese market, and manufacturing investment has also shifted, directly causing the one-way rapid rise of China-related air cargo export demand. What is worrying is that in the next few months, the continued rise in energy prices and the continued blockage of the supply chain are likely to bring the risk of a sharp decline in the global economy.

 

However, air cargo prices have not fluctuated with the above three distortions, and the overall trend is "all the way up." Of course, there is the impact of the imbalance in capacity supply caused by the decline of international air passenger traffic due to international travel restrictions, but the important thing is the impact of the rapid imbalance of the industrial structure between production and consumption in the short term caused by the epidemic.

 

This imbalance is not only manifested as an imbalance in the industrial structure of the same country or region, but also as a global imbalance between countries or regions and regions, which ultimately leads to chaos in the global supply chain, and the high degree of shipping is impeded by a large amount of transportation demand. Turning to the air cargo method, the "bullwhip effect" of air logistics has been brought to the extreme, and the air cargo price finally showed a "rising" trend.

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