Like many industries during COVID-19, the air cargo industry is challenged with fluctuating supply and demand. Also like many industries, some companies, stakeholders, business leaders, pilots, and other staff are waiting, or demanding, a return to normalcy so they can increase productivity and profit. That said, while the air cargo market has seen gradual recovery over the past few months, we are still quite a ways from reaching pre-COVID stability. Instead of focusing on getting back to normal, companies should be working toward creating a new normal that accounts for more digital processes. Here’s the scoop on air-cargo trends in 2020.
New Business Model
In boardrooms across the world, commercial airlines have been focused on passenger travel; however, some discussions should be recalibrated to prioritize the impact of lost cargo revenue. Across countries, data suggests that cargo plays a critical role in overall profit, and in most cases, even performs better than high-ticket items like first-class air travel. In fact, globally, cargo has outperformed first-class air travel three times over the previous decade.
It is important for air logistics discussions to include these crucial key elements:
Data transparency is not just a requirement today, but the new norm. However, this is only possible with end-to-end data capability through dashboards and apps.
Thanks to Amazon, overnight or even same-day shipping has become the new norm. Customers have learned to expect quick and on-time deliveries.
Unique service segments and professional staff that reflect an airline’s capability to assure its longevity. Above all, a “delivered as promised” mantra should become the driver in staff accountability and customer satisfaction.
If the air cargo industry does not recognize the need for change, it will not return profitable results for years to come.
One solid way that airlines can continue to make up financial ground in a post-COVID world is by using any means possible to aggressively pursue air cargo revenue. Many commercial airlines have already started to remove passenger seats to make space for more cargo capacity. The global air cargo market, broadly represented by direct cargo revenue and airmail carriers, is valued at over $250 billion, according to The Loadstar.
Historically, airlines leave a lot of that money sitting on the table. Implementing a corporate sales program to pursue new digital sales pathways for airlines to secure air cargo revenue is one sure way to stay ahead of the competition.
There are several ways that airlines can begin to recover losses experienced during COVID-19, but if they aren’t honing their focus on air cargo, they are swimming against the current. There’s a lot to be gained by investing in logistics technology in a post-COVID world, and the new normal for airlines should reflect this.