Industry wise shift in mode preference – Sea to Air

Industry wise shift in mode preference – Sea to Air

 

 

The first cargo flight flew between Dayton and Columbus in 1911, carrying 200 pounds of silk for a store opening. The recorded delivery time was 65 minutes, and since then, the world believed that high-value and low-volume consignments can be transported through air cargo.

However, only during the 1990s did the transportation of computer disks to thousands of customers make way for the sector’s rapid growth. As of date, nearly US$6 trillion worth of cargo is transported through air cargo every year, accounting for nearly 35 per cent of world trade by value.

Due to its nature, dangerous/hazardous cargo transportation was not allowed through air cargo. Yet, recently, there has been a buzz around the mode being preferred over Maritime. Perishables and pharmaceutical shipments are now totally reliant upon air cargo. And the amusing fact is that even heavy engineering manufacturers are shifting focus towards air cargo.

The reason behind the shift, as obviously seen, is due to rapid movement. But the reason for the shift is also different from industry to industry.

 

Why the shift?

Transportation through Maritime shipping is always preferred, even though the turnaround time is low.

However, the risk of cargo theft is high, and most importantly, the possibility of the product not reaching the destination or the consumer on time is a risk any consignee can afford. In the case of perishables, product degradation becomes inevitable in Maritime transportation, which adds to the losses. Hence, the shift from Maritime to air cargo began.

 

Industries that chose Air Cargo over Maritime

Pharmaceutical

Over one trillion-dollar worth of pharmaceutical cargo is shifted yearly, and with the pandemic, the number has increased exponentially. Transporting life-saving drugs in a quick span of time to remote locations worldwide is the primary utility of air cargo in the industry.

Before the pandemic, the industry raised concerns over medicines losing potency due to the non-maintenance of temperature-sensitive drugs. Hence, a large number of pharmaceutical giants began relying on Maritime, as temperature control was seamless even though it took time to deliver.

During the pandemic, the thought process began to change as quick vaccine transit was essential. Regulators like IATA actively pushed for a temperature-controlled environment in pharmaceutical cargo, and that stroke chords with the manufacturers, too. Now, a large chunk of the industry relies on air cargo.

 

Perishables

Perishable goods are time and temperature sensitive. Hence, since the 1990s, air cargo has become the preferred mode of transport for perishables, but still, the high cost of transportation remains a cause of concern. According to industry data, nearly 80,000 fresh-cut flowers are transported through air cargo every 24 hours.

Nowadays, with widespread cold chain facilities in key air cargo hubs globally, fruits, vegetables and even seafood are transported through air cargo in large numbers. The shift again is attributed to the pandemic when transporting essential goods to needy countries through air freight became a norm.

 

E- commerce

With the success of cross-border e-commerce during the pandemic, transportation of luxury products from European countries to others increased rapidly. On the verge of shopping, people buy authentic and traditional items from different places worldwide. For example, online shopping for artefacts became a norm during 2020 and 2021, which drove a massive surge in the e-commerce industry.

With the promise of same-day or quick delivery, the e-commerce industry began embracing air cargo. Now, both are complementing each other and growing at a rapid pace. Amazon, the global e-commerce giant, built its fleet for faster deliveries and is on the verge of continuing the momentum. Similarly, other e-commerce giants are keen on building their own fleets to optimise last-mile deliveries.

 

Electronics

Looking back at the history of air cargo, the software and electronics industries first leveraged air cargo’s power. However, some years ago, there was a shift to maritime due to cost concerns. Several electronic manufacturers believed that transporting electronic shipments through air cargo was expensive. Especially in developing markets, leveraging Maritime was their only strategy as cost control turned out to be their focus.

Yet, timeliness was a concern as sourcing individual electronic parts or completely assembled units from one country to another was time-consuming, and the delivery promises were unmet. Therefore, electronics manufacturers again turned towards air cargo, and this time, it needs to move ahead as, according to media reports, faster deliveries of electronic products are now rampant across the globe.

 

More industries turn towards air cargo

With the success of these industries, even chemical manufacturers, lightweight equipment manufacturers and others are keen on exploring air cargo. However, how conducive and feasible the environment will be for them is to be seen. IATA and other regulatory bodies are keenly working on a framework to invite more industries to leverage air cargo, and it is believed that the future looks bright, and these industries are likely to choose air cargo as the preferred mode of transport.