Between the pressures of capacity demand, global vaccine distribution and plummeting passenger travel, the air cargo industry has been through the wringer — and it’s not quite over. FreightWaves’ Director of Market Intelligence Zach Strickland sat down with Ray Wood, head of global carrier management at World Courier, an AmerisourceBergen Company, to discuss how the air cargo market has adjusted and maintained strong relationships with customers.
“Air cargo capacity and passenger services almost disappeared overnight and it peaked just over a year ago, availability as low as minus 80% versus 2019,” said Wood. “That said, the creativity and innovation from the air cargo industry is proving powerful in meeting the fundamental challenges of keeping global trade on the move, especially in the time of increasing demand for chemicals, perishables and, in particular, pharmaceuticals.”
Due to supply shortages and other disruptions, the cost per kilo of pharmaceuticals spiked 100% on some trade lanes during 2020. When vaccines rolled out, Wood recalled an industrywide fear that the demand would exhaust available capacity, but that was not the reality, as vaccines were distributed in small and frequent cycles, making it easier to manage. Even with India’s plight during the latest COVID-19 wave, despite financial pressures, the industry provided collective support and supplies, as vaccines were distributed without charge.
“We’ve always managed strong relationships with our carrier partners,” said Wood. “One of the key factors of the relationships is being able to discuss openly and transparently the factors over success or failure in delivery for our customers. Frequent and ongoing communication enables us to identify potential challenges before it’s too late and adjust our transit plans to deliver our promise with limited effect for the customer.”
In the coming months, Wood believes that with regulatory restrictions, leisure travel will return to the industry, the sales of which will boost the economy. Business travel, however, will return more slowly, as it’s a cost that many businesses have learned to work around. For airlines, however, it’s a source of significant income.
