Mike Hill, Director Group - Freight, explains in this interview the development and trends within the time-critical air freight industry.
Did you see any key developments or changes on the air freight sector for time-critical cargo in the last 6 months?
A significant portion of the time-critical cargo business in which we operate, comes from the automotive and aerospace industries, where spare parts need to be delivered as quickly as possible either via charter or onboard courier service, in order to avoid financial loss due to interruption of production lines or an aircraft unserviceability issue.
As usual during the summer months, the automotive market does quieten down, but in general the automotive time-critical business this year has not been as strong as it was in the previous year. However, during the summer period, while automotive is quiet, the aerospace business is at its peak. This is because airline fleets are flying at their maximum, so it is even more crucial for an aircraft defect to be quickly resolved. An aircraft needs to return into service in the quickest time in order to avoid significant disruption to flight schedules and the ensuing EU-regulated compensation that has to be provided to delayed passengers.
How will the time-critical air freight sector develop?
We currently see, in general, our market share continuing to grow within the time-critical sector.
The rampant growth of global airline fleet sizes leads to increased requirements of aerospace movements. We in fact already service a large amount of the world’s airlines.
Within the automotive market we see the development that shippers are becoming more discerning buyers, which is a threat to many forwarding agents. Recently, brokers or carriers seem to be more willing to work directly with shippers. At Air Partner however we continue our strategy to work exclusively with freight forwarders as their consultants, to protect their position in the automotive business and to enable them to offer our competitive charter solutions within their service portfolios.
The current trade dispute between US and China has already had an effect on the market and is likely to disrupt the global supply chain further until resolved. This disruption could potentially lead to an increased requirement for charters. When scheduled airfreight operators cut their capacities, they are often too slow to respond to demand spikes.
A significant uncertainty we face is the potential impact of Brexit, yet we believe this could provide opportunities as well as challenges. In the case of a “no deal” Brexit, it seems quite likely there will be a customs backlog at UK and French entry points, which could cause significant disruption to European supply chains, especially in the “Just in Time” automotive market but also on the pharmaceutical market. When called upon, forwarders can rely on Air Partner to urgently organise and operate ad-hoc emergency aircraft charters and OBCs to overcome port delays and keep the supply chains moving.
How does the technical part play a role?
In a time of increasing digitalization, the technical component within the air freight sector plays a significant role. We were one of the first cargo charter brokers offering a cutting-edge online order and tracking system. Our inhouse developed system, RED-TRACK provides our customers with total visibility at every stage of their shipment’s transport. We are now looking to redevelop this system, to give our client an even more enhanced customer experience.
Over the last few years there have been numerous platforms launched on the market with much fanfare, attempting to revolutionise the charter broker process into an automated process, via a few clicks on an app. However, those who are involved in the charter aircraft procurement side, fully understand that the multiple changing factors involved in the quoting of time-critical air charter business means that it simply cannot be digitalised. Constant changing availability, operators having their aircraft tramp from one job to the next (without returning to base) and loadability are just 3 factors which cannot be represented in real-time on an online platform. Realistically, the aircraft operators within the time-critical sector, do not have the ability to be able to update their real-time availability to any online platform, as availability changes on a minute by minute basis. It is therefore impossible to cover all these factors with algorithms in the same way that might be largely possible on the passenger business.
One can be certain that if we look behind the scenes, it becomes clear that the human role in the chartering of an aircraft can never be fully replaced and any platforms claiming to replace the human involvement in locating the most suitable aircraft, are simply gimmicks to attract new clients. In reality, there must always be a professional broker with the right experience, to be able to offer a suitable solution.
What are the benefits to work with Air Partner for any time-critical deliveries?
Air Partner offer flexible bespoke solutions, experience and a good contact network to enable swift handling of OBC and charter projects. Our Account Managers are highly experienced, available 24/7/365 and can make an offer within 20 minutes for time-critical situations.
As mentioned above we provide RED-TRACK, an exclusive real-time tracking system to ensure you will keep on track with each time-critical shipment.
Our freight team take care of the entire logistical process from collection, ground transport, airport handling arrangements, specialised loading equipment, flight permissions and all other services, to ensure a smooth operation.
We offer cost-effective solutions with competitive and transparent "all-in" rates without hidden exclusions or surprises. This enables the client to understand clearly the costs of the whole project and to have all potentials risks covered, thus enabling our clients to be more competitive and successful.