As a result, many flights are diverting south, but with some airspaces in the Middle East restricted or closed, airlines are limited in their options.

Diverted routes can lead to lengthy blockages on key flight corridors, which in turn causes cancellations, limited capacity for freight and potentially increased costs.

Various flight times have also increased due to the diversions, which can result in increased fuel usage and potential further increased costs, which may need to be passed on to the end customer.

Since the crisis, fuel prices have been rising; for the week ending March 4 2022, jet fuel (kerosene) cost $1,119 per tonne – an increase of 28% from the previous week, and a 45% increase since the start of 2022.

This is a concern for an industry which has already seen airfreight prices rise to two and a half times higher than pre-pandemic levels, and is still recovering from the impact of Covid-19.

Passenger travel and airfreight are intrinsically linked and in 2020, with only limited numbers of passengers flying, UK airfreight volume fell to 2,002,000 tonnes, a 21% drop in comparison to the 2,535,000 tonnes in 2019.

The sector started to see green shoots of recovery in November 2021 – according to the Civil Aviation Authority, total UK airfreight tonnes increased by 5.9%, compared with November 2020 – but, just as it starts to recover, these latest developments could once again see turbulence on the horizon for the sector.

Air cargo and road transport capacity are needed urgently to move donated food, medicines, clothing and other items to Poland and Ukraine-surrounding countries to support those affected by the war.

If capacity is to become constrained, humanitarian aid must be prioritised.

Despite the challenges facing the airfreight sector, it has a reputation for facing and solving complex problems, as highlighted in recent years.

As when transporting medical supplies throughout the pandemic, the sector will adapt to prioritise essential goods, while also ensuring the rest of the supply chain is maintained.

Logistics UK is working with the CBI to link members able to transport donated goods either via air or road and is urgently seeking air capacity to help the lift of aid to Poland, Germany and Moldova.

If any members can pledge their support, please email supplyukraine@logistics.org.uk

Source: www.aircargonews.net

Image:

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The fragility or brittleness of a global marketplace so deeply dependent on just-in-time inventory. Any event, whether a pandemic, hurricane, or a container ship stuck in the Suez Canal, creates immediate disarray. In response, retailers have reverted to “just-in-case” practices, building up large safety stocks. It has become a choice between risking a stock-out or keeping costly excessive inventory. Where is the balance?

—Joe Dagnese
President and CEO
PECO Pallet

Supply chain professionals should use the experiences of 2020 and 2021 to take a fresh look at their supply networks, understand their vulnerabilities, and then take the appropriate actions to improve resilience. Doing so can create competitive advantage; failing to do so leaves an opening to the competition. Supply networks may contain potentially crippling risks, and organizations must identify and remediate them.

—Oliver Lemanski
CEO
OnProcess

Close coordination and support throughout every point of the supply chain is the new normal. Disruptions have had a lasting impact on customer confidence. Detail-oriented supply chain management, enhanced customer service, and data-driven inventory decisions are essential to reestablishing a chain of confidence.

—Angela McNally
Vice President, Global Provider Solutions
Owens & Minor

The supply chain is ripe for innovation. A singular disruption impacts a sequence of events, creating inefficiencies. The positive outcome of this unprecedented market cycle is collaboration across the supply chain resulting in technology solutions. This improves productivity by getting goods to shelves efficiently on a go-forward basis.

—Blair Blake
VP, Carrier Strategy
Arrive Logistics

I’ve learned not to take consistent air and ocean supply chains for granted. The past two years have been inefficient, making delays commonplace and causing deficits and surpluses of inventory due to increased freight costs. The solution is to stay informed and listen to suppliers, freight forwarders, and consumers.

—Richard Huang
CEO
Cloudious9

Flexibility in planning beats perfect execution. The market is in flux; the businesses succeeding are the ones adapting to what is being thrown at them. If I’ve learned anything over the past two years, it’s that perfectly planning for the long term doesn’t necessarily lead to success.

—Sean Elliott
Chief Technology Officer/Chief Digital Officer
Körber Supply Chain

Our reliance on a few key ports and jobs (dock workers and truck drivers) highlighted our supply chain fragility. It only takes one or two bottlenecks to have ramifications and ripple effects throughout the entire economy.

The recent supply chain challenges also demonstrated how critical the ports of Los Angeles and Long Beach are specifically to the United States—these ports are in earthquake-prone regions, and a large earthquake impacting one or both of these ports could make COVID-19 related challenges seem more like a nuisance than a major disruption.

—Megan Linkin
Senior Parametric Nat Cat Underwriter
Swiss Re Corporate Solutions

The companies that succeed are the ones that communicate most effectively. Because there are so many players (vendors, manufacturers, 3PLs, carriers) and software all working together to run a supply chain, the companies that create a common vision, communicate the vision, and hold all parties accountable to the same standard are the ones that have adapted to the pandemic successfully.

—Keith Moore
Chief Product Officer
AutoScheduler.AI

Inventory is not necessarily the “evil” that supply chain professionals once thought. Having distributed inventory in strategic locations at an inventory carrying cost that does not burden your balance sheet can be the key to supply chain resiliency and winning.

—Tom Nightingale
CEO
AFS Logistics

Having the right systems and technology matters. The supply chain changed in a hurry, our systems and technology helped us to adapt quickly with it. We were able to quickly identify obstacles and overcome them. By embracing forward thinking, we were able to limit the impact of supply chain issues.

—Lonny Holston
Export Operations Coordinator
Mickey

Two things we have learned: We must: 1) understand data to minimize risk and 2) identify weak spots in the supply chain to improve workflows. Organizations that have met the challenge of the past two years have done so by making calculated investments in technology and processes to limit disruptions.

—Mark Casiano
SVP, Sales, Marketing & Customer Experience
Odyssey

The past two years exposed infrastructure cracks in our industry—specifically when looking at effective capacity at ports and equipment availability. Simply adding more ships and more containers will not get us anywhere if there is not more capacity in the system to receive those containers.

—Nathan Strang
Director, Ocean Trade Lane Management
Flexport

Visibility is vital. The shortages of raw materials and extended supplier lead times have drastically increased stock-outs. You need complete visibility of 1) inventory indicators to ensure you can meet demand and 2) knowing how well your suppliers perform.

—Ara Alec Ohanian
Group CEO
NETSTOCK

We need to fully digitize our supply chains if we want them to be resilient in the face of unexpected disruptions. By unifying our digital systems, applications, and processes, we will be able to efficiently manage supply chain operations.

—Antony Francis
Supply Chain and Logistics Consultant
Endava

Retailers need better information to navigate quickly. As supply chain bottlenecks have impacted every retail touchpoint, winning means knowing your options and what the market is doing. With AI-driven market intelligence, brands can make better and faster decisions to deliver great customer experience and grow revenue.

—Juliana Prather
CMO
EDITED

We learned how to stand up brand new distribution operations in new markets at warp speed. In some cases, we went from no market presence at all to lease, equipment, and team in place and completely RF-integrated in just three weeks. We also delivered a building five months ahead of schedule.

—Dale Young
Vice President
Warehousing & Distribution
World Distribution Services LLC

The pandemic is by no means a short-term crisis event. Its impact on the work of people and the functioning of the supply chain in the organization will be long term. Therefore, in order to effectively confront the challenges of the future, the business must increase long-term resilience along the entire supply chain. To do this, supply chains must leverage platforms that offer access to applied analytics, AI, and machine learning solutions, and provide end-to-end transparency.

—Dmitri Fedorchenko
CEO and Co-Founder
Doft

The retail supply chain can no longer be protected from the impacts of omnichannel. The volume of omnichannel purchases and fulfillment has grown to the point that retailers can’t treat it like a rounding error. They must make supply chain strategy and network changes or risk losing their shirt—literally and figuratively.

—Nikki Baird
VP, Retail Innovation
Aptos

The most surprising lesson I learned was how much the supply chain relies on commercial uplift. The airlines fly passengers all over, and airline companies reserve space for cargo on commercial flights.

We saw firsthand how much companies relied on airplanes, so when the pandemic hit, and there were fewer flights happening, that contributed to the bogged down supply chain. As more passenger flights come back, that has the potential to ease supply chain challenges.

—Dustin Hansen
CEO
InXpress

The magnitude of disruptions supply chains faced over the past two years demand rapid innovation. The world around us has changed fundamentally, so legacy systems and their outdated approaches no longer serve supply chains well.

Adapting an adage, futility is doing the same things and expecting the same results, even when the underlying assumptions have shifted. Supply chain leaders who have digitally transformed their organizations are the ones positioned to address emerging trends, mitigate risk, and identify new opportunities.

—Polly Mitchell-Guthrie
VP, Industry Outreach and Thought Leadership
Kinaxis

Adaptation is absolutely critical. You have to offer substitutes, source creatively, have a plan B and maybe even C, and be vigilant in getting accurate data.

—Kevin Ledversis
Sales Director
Newcastle Systems

It’s more important than ever to “architect” agility into processes. The growing complexity of supply chains introduces plenty of opportunities for things to go awry. The more shippers can digitize and standardize manual operations, the better equipped you are to pivot when needed and keep shipments moving.

—Virgil Ferreira
COO, Rate Management
Magaya

The pandemic highlighted the need for a much closer relationship between manufacturers and their 3PL partners. We are working more closely with our partners than ever before—developing innovative and collaborative approaches to tackling these new, longer-term challenges.

—Jim Saponaro
President, Life Sciences & Healthcare
DHL Supply Chain

Relationships now are more important than ever. Whether it’s developing partnerships with secondary and tertiary suppliers to meet rising demand, or managing the expectations of vendors and customers during challenging times, the importance of establishing and cultivating strong, lasting relationships cannot be overstated.

—Jonathan Parks
Senior Vice President, Supply Chain
iGPS Logistics

Amateurs hunt dollars, professionals hunt relationships.

—Whit Smith
Director of Operations
TA Services

We need to be able to plan and face the consequences that result from the consolidation trend of brands and businesses. Consolidation has caused massive inefficiencies and created a lack of options due to the absence of competition. Many companies have benefited in the short term from these mergers but do not recognize their role in the supply chain or do not plan accordingly.

This has resulted in practices that can be monopolistic in nature and can have disastrous results in the operation of the chain, especially for smaller brands and product lines. However, big actors, who have actively promoted mergers and consolidations did not realize—maybe until very recently—that their operations are at risk as well. Until these larger groups and brands realize that their practices have affected the overall functioning of the global supply chain, logistic partners need to be prepared for disruptions.

—Eric Gomez
CEO
maxiaNET

Source: www.inboundlogistics.com

Image: www.pixabay.com

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The new guidance is designed to help to accelerate the transition towards safer and more resilient supply chains, while supporting Covid-19 response and recovery efforts.

Digital innovations are helping the air transport sector to transition away from paper-based documents used to facilitate the movement of global airfreight, promoting a contactless air cargo environment and greater cross-border trade resilience in the face of future pandemic threats.

In line with the recommendations of the ICAO Council’s Aviation Recovery Task Force (CART), the specifications aim to help reduce physical contact among international trade and transport professionals, and in so doing better protect the fluidity of cross-border trade and international transport operations from pandemic-related restrictions.

“The latest innovations reflect ICAO’s integrated, collaborative, and multilateral approach to transport policies encompassing air cargo and mail supply chains, and will play an important part in addressing both current and future pandemic risks,” highlighted ICAO secretary general Juan Carlos Salazar. “It’s our expectation that they will help address the tremendous double strain now being placed on global supply chains, whether by the COVID-19 pandemic itself, or the incredible surge in international e-commerce which has accompanied it.”

ICAO’s collaboration with UNECE on supply chain digitalisation is an outcome of the Joint Statement on the Contribution of International Trade and Supply Chains to a Sustainable Socioeconomic Recovery in COVID-19 Times, which was signed by eight UN agencies in September 2020.

Digital specifications will now replace the formerly paper-based Air Waybill (AWB), Dangerous Goods Declaration (DGD), and the Consignment Security Declaration (CSD). These in turn form part of a broader suite of deliverables for multimodal transport data sharing, applicable to air, road, rail, maritime and inland water transport.

Source: www.aircargo.com

Image: www.pexels.com

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The group’s latest figures show that air cargo demand in cargo tonne km (CTK) terms in November increased by 3.7% compared with 2019 levels (used to mitigate the impact of Covid).

IATA said that this growth percentage was “significantly lower” than the 8.2% registered in October and the 6.7% increase over the first 11 months of the year.

“Supply chain disruptions and capacity constraints impacted demand, despite economic conditions remaining favorable for the sector,” the association said.

IATA highlighted labour shortages due to employees being in quarantine, insufficient storage space at some airports and processing backlogs exacerbated by the year-end rush.

Meanwhile, demand indicators remain positive, with retail sales in the US and China strong, trade and industrial production figures continuing to beat 2019 levels and inventory levels low.

IATA added that a surge in Covid cases was driving PPE demand.

Cargo load factors for the month stood at 55.9% – a 6.1 percentage point increase on 2019 – as capacity was down by 7.6% on two years earlier.

IATA director general Willie Walsh said: “Air cargo growth was halved in November compared to October because of supply chain disruptions.

“All economic indicators pointed towards continued strong demand, but the pressures of labour shortages and constraints across the logistics system unexpectedly resulted in lost growth opportunities.

“Manufacturers, for example, were unable to get vital goods to where they were needed, including PPE.

“Governments must act quickly to relieve pressure on global supply chains before it permanently dents the shape of the economic recovery from Covid-19.”

IATA is calling on governments to: ensure that air crew operations are not hindered by Covid-19 restrictions designed for air travellers; implement the commitments governments made at the ICAO High Level Conference on Covid-19 to restore international connectivity; and provide innovative policy incentives to address labour shortages where they exist.

Looking at regional performance, Asia Pacific airlines saw cargo increase by 1.1% in November compared with two years earlier.

North American carriers’ demand was up 13.3%, although this was down on 20.3% in October, as congestion at hubs affected growth.

European carriers registered a 0.3% increase in demand due to supply chain congestion and localised capacity constraints.

Middle East-based airlines saw cargo demand increase by 3.4%, although this was also a “significant drop” on previous months performance.

In Latin America, carriers saw demand drop by 12.8% on 2019, also a deterioration compared with October. Finally, African airlines noted a 0.1% decline, another drop on October.

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Skyport processes more than half of the cargo moving through Prague Airport (PRG), where it operates an 8,300-square-meter, semiautomated facility with a 100,000-tonne cargo capacity. The handler was acquired in April by airfreight infrastructure investment firm Ventus and Sky Logistica, providing new funding for additional technology developments. In addition to PRG, Skyport also has handling operations in Slovakia at Bratislava Airport (BTS) and Kosice (KSC).

Air Cargo World spoke with David Adamek, chief executive officer at Skyport, about changes in passenger and cargo operations, future goals and expansion, and how the handler has navigated labor challenges throughout the pandemic.

Air Cargo World: With the recent acquisition of Skyport by Ventus and Sky Logistica, what improvements are in the works? Do you expect to expand to any additional airports?

David Adamek: We have focused on digital initiatives that will help to improve processes and adapt to the present requirements from airline customers, in particular concentrating on artificial intelligence, the digitization of the physical space and blending with existing software systems. We have overhauled a very traditional industry and digitised the entire process of moving a box from A to Z, with the help of our unique software platform.

As Ventus, we have an in-house technology team, which is mostly based on artificial intelligence technologies, and Skyport continues to nurture relationships with technology partners, too.

As far as additional markets are concerned, we will focus on improving what we have rather than expanding.

ACW: Many cargo handlers have experienced problems around labor shortages and high turnover. What has Skyport done to avoid or address those issues?

DA: Throughout the COVID-19 crisis, Skyport has retained its entire team and we focused on training to provide the additional skills that were required in the crisis.

We were lucky to have a robust team and robust infrastructure that allowed us to adapt swiftly to coping with volatility in cargo flows, where we had to adapt almost daily to erratic flight schedules and ever-expanding trucking volumes.

ACW: Have you added any carriers this year apart from Finnair Cargo? Do you expect to do so in the next year?

DA: Winning Finnair was a great achievement for us. With its existing air cargo infrastructure, Prague (PRG) airport can handle in excess of 200,000 tonnes of cargo a year and we are available to support the airport in attracting more traffic that will help to maximize this capacity.

Currently, the airport is operating at around 50% capacity, but it is not actively promoted as a cargo-friendly hub. We would like to put Prague on the map as a cargo hub and we’re available to work with all the stakeholders to achieve this, and to bring in more contracts like Finnair.

Source: www.aircargoworld.com

Image: www.pexel.com

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