Air Cargo

Top global service in the face of blistering COVID-19 headwinds.

While COVID-19 has brought extraordinary challenges to the air cargo community, we’re now starting to see some opportunities emerge. Here’s how carriers are responding.

The International Air Transport Association (IATA) released an analysis in June showing that the airline industry’s global debt could rise to $550 billion by year-end. That’s a $120 billion increase over debt levels at the start of 2020.

Amazon.com’s Prime Air fleet will grow to about 200 planes, up from 42 now, in the next seven or eight years, creating an air cargo service that could rival United Parcel Service Inc. and FedEx Corp., according to a recent study.

This briefing offers an overview of Amazon Air, providing insights on its size, scope, and evolving logistics role, it draws upon data from four primary informational sources to illustrate its economic and geographic orientation.

While there was optimism due to easing trade tensions at the end of 2019, new complications now find the world’s air carriers back on their heels.

Some industry analysts are predicting that many air carriers will be in serious financial difficulties by mid-year.

Since the Novel Coronavirus (2019-nCoV) Outbreak emanated in the Far East, it should come as no surprise that its disruptive impact on global logistics struck there first. Analysts agree that the one transport mode most facing the greatest challenges now and in the foreseeable future is the air cargo industry.

January shipments—at 1,026,714—fell 3.6% annually. And containerized freight shipments were off 2.8% annually, with Panjiva saying that it was notable there was a decline even with the earlier timing of the 2019 Lunar New Year. Looking back, for calendar year 2019, total shipments—at 12,243,739—slipped 1.0% compared to 2018, marking its worst annual output going back to 2009.

Ongoing trade tensions, pricing volatility and slack demand have kept the air cargo market on hold for most of this year. However, industry analysts say that a new set of factors could reverse the trend by peak season.

Learn about the 36th Annual Quest for Quality Award winners for Air Carriers / Air Freight Forwarders

If the recent announcement made by FedEx in which it publicly stated it is no longer doing business with Amazon left any type of mark for Amazon, it looks like it did not phase the global e-commerce bellwether based on an announcement it made on Wednesday.

Airforwarders Association members are investing in their futures through technology enhancements, increasing global footprints, and expanding service capabilities.

Air cargo demand lost momentum toward the end of 2018 in the face of weakening global trade, sagging consumer confidence and geopolitical headwinds. Still, demand grew by 3.5% compared to 2017—which was also a banner year.

The “Amazon Effect” has had two definite impacts on the air cargo industry – increased package volumes and changing customer expectations.