TF Spotlight: The threat and challenges for the Air Cargo industry in the current times
As normalcy resumes, there are varied questions to be addressed; some questions at the forefront are – how will capacities get allocated? Will affordable airfreight rates be available to the shippers, and would there be enough infrastructure support on the ground accessible in terms of surface transport, cargo storage, and man-power supply?
The biggest question is which trade lanes will pick up first, whether it would gear airlines and the entire industry to move in that direction, and how quickly? Therefore, the airline sector plays a fundamental role in the present times, but it is also important to highlight that it has its fair share of challenges. Besides battling recessions, to regulations, to labour shortages, there are countless issues this sector has been facing.
In the case of Europe, many airlines based in Russia and Ukraine were major cargo players hence sanctions against Russia have led to disruptions on many levels.
Low manufacturing output, and higher fuel prices exacerbated by the Ukraine war, are making air freight more expensive, and fresh lockdowns in China worsen further global supply chain disruption. The Demand fall was enormous among European carriers, who reported an 11.1% decrease in CTKs on a 4.9% drop in capacity year on year. Labour shortages are another issue further hampering the Air Cargo growth.
One of the main downsides of digitisation, one is always susceptible to data hacking and security leaks. The air freight community is no different to any other industry, where susceptibility to cyber-attacks, hacking and ransomware threats are concerned. Disruption in supply chains has made weak security systems easier to exploit. No system is 100% immune to misconfiguration, insider threats, and deliberate attacks. An organisation’s sensitive data can get lost, damaged, or obtained by the wrong people.
Many airlines and Airports have robust systems to address common hacking threats but have not taken a holistic approach to the IT environment or considered the broader threat to the aviation system. There are three-pillar strategies for the holistic approach, primarily called- Risk Management, Advocacy, and Reporting and Communication. It is crucial to set up state-of-the-art infrastructure and implement preventive and corrective (ad hoc) measures to secure business continuity or reduce the severity of damage in case of a cyber-attack.
It can reduce forensic expenses by implementing a comprehensive security platform with automated forensic export monitoring results. Preventing and ensuring proper data security requires the implementation of real-time monitoring and quick response to any suspicious event to make our data resilient.
Though the aviation industry is resilient and resourceful, the magnitude of the COVID-19 crisis for airlines is extensive. Airlines, to sustain themselves, have dramatically cut costs and adapted their business to whatever opportunities were available. Air cargo volumes were already slowing from 2021’s rapid pace when the war in Europe erupted. Global shipping demand by air fell 5% in March and more in April than in the prior year. According to estimates by IATA and other market analysts, the retreat in shipping volumes is extending into May because of limited factory output in China due to extreme anti-COVID measures.
The last two years have already shown that those companies who react fast and flexibly to changing market conditions sustain or even gain business, which is one of the strengths of the CHI group. Moreover, risk diversification gained significance. Offering a broad portfolio of services on three different stations, CHI is in a good position.