Flying High – The Growth of the Air Freight Industry
6 minutes to read
The air freight industry is a vital part of the broader logistics sector and an important element of supply chain management for companies in a wide variety of industries. The International Air Transport Association (IATA) recently forecast a rise in total air cargo carried in 2018 to 62.5 million tonnes – an increase from 59.9 million tonnes moved last year. That represents less than 1% of global trade by volume, but over 35% by value. The expected value of goods transported by air is expected to exceed $6.2 trillion this year – equivalent to 7.4% of the world’s GDP.
History of the air freight industry and evolution of services
The first cargo carried by air was in November 1910, when bolts of silk were transported by aeroplane from Dayton to Columbus, Ohio. This was less than seven years after the Wright brothers’ historic first powered flight. By 1914, the United States had started regularly moving post by air, with a more comprehensive airmail service in place by 1925. Within only six years, domestic airmail contracts accounted for 85% of all US airline revenue; 14.8% came from passenger transport and, at that time, only 0.2% from freight transport. World War II brought an explosion in the use of aircraft with, for example, 650,000 tons of cargo moved between India and China in the last four years of the conflict. The modern period of air freight as we know it began in the early seventies, when the launch of door-to-door express package services DHL and Federal Express coincided with the first wide-body jet aircraft entering service.
The world’s biggest ports
Today, airports are vital transportation hubs not just for people, but also for air cargo. The world’s busiest airports for cargo traffic include:
- Europe: Frankfurt Airport, Paris Charles de Gaulle Airport, Amsterdam Airport Schiphol, London Heathrow Airport, Leipzig/Halle Airport, Luxembourg Findel Airport.
- United States: Memphis International Airport, Anchorage International Airport, Louisville International Airport, Los Angeles International Airport, Miami International Airport, O’Hare International Airport.
- Asia: Hong Kong International Airport, Shanghai Pudong International Airport, Incheon International Airport, Dubai International Airport, Narita International Airport, Taiwan Taoyuan International Airport, Singapore Changi Airport
At our group partner, Hemisphere Freight Services in the UK, we work out of London Heathrow and can attest first-hand to how busy it is in terms of freight handling. In 2016 alone, Heathrow handled over one and a half million tonnes of cargo.
Types of goods moved by air freight
There are many types of goods – including both finished goods and component parts – that are transported by air. Despite being more expensive than movement of freight by surface routes – road, rail and ocean – there are industries and applications in which speed of movement outstrips the need for cost control. Here are some examples:
- The movement of perishable goods across great distances would simply be impossible without air transport.
- The pharmaceuticals industry relies on air freight to move time-sensitive products, such as vaccines, at controlled temperatures – firms currently spend over $13 billion a year on logistics.
- The movement of livestock by air is widely considered to be the most expedient and humane method of transport over long distances.
- Electronic devices such as smartphones and tablets are shipped by air from the Far East to consumers worldwide – new iPhone releases actually cause an annual spike in air freight prices.
- E-commerce businesses – including the mighty Amazon – rely on air freight to get products to customers who increasingly expect swift and expedited delivery of purchases.
- In terms of mail services, transport of letters is seeing a decrease (from 340 billion to 328 billion in 2017) but the number of postal parcels by air is increasing (6.7 to 7.4 billion).
Sizes of planes and how they have changed over time
The introduction of the Boeing 747 in 1970 heralded a new era of wide-body jet aircraft that facilitated the modern age of air freight. When it made its first cargo flight in April 1972, the 747 – alongside other wide-body craft such as the Lockheed L-1011 and the Douglas DC-10 – was able to carry over two and a half times as much freight as comparable narrow-body planes at the time.
Demand for air freight continues to grow year on year and, based on projections that volumes will more than double by 2035, Boeing projects that the total fleet of freighters worldwide will grow from 1,770 to 3,010 over the same period, including both newly commissioned freighters and passenger-to-freighter conversions.
Air freight needs continue to be met by a variety of aircraft types, including narrow-body aircraft (typical capacity under 45 tons), medium wide-body aircraft (40 to 80 tons), large wide-body aircraft (80 tons plus), and super-transporters such as the recently launched Airbus Beluga XL, which has a massive cargo bay designed specifically to transport outsize assembled aircraft components, such as wings and sections of fuselage.
Key Things to Consider When Choosing an Air Freight Company
When choosing an air freight company or logistics provider, there are a number of things to consider – and getting it right first time can be crucial to your business and particularly its supply chain management. Here are some of the factors you should take into account:
- Capability of handling full air freight exports and imports – Does the provider have the experience to deal efficiently and effectively with both imports and exports? Do they provide a seven-day service, or might deliveries be delayed by providers that only operate Monday to Saturday?
- Ability to resolve problems and handle NES customs clearance – As a minimum, the provider should be experienced in handling NES Export Declarations. Again, staff availability over the weekend can ensure clearances are processed and cargo isn’t delayed.
- Airline storage charges – Storage charges can be very high, and an effective logistics provider will work hard to ensure goods are moved on swiftly and efficiently to avoid fees.
- Communication and customer service – As with any business relationship, you will want a partner that puts you as the client first, and that offers clear and effective channels of communication.
- Experience handling all types of cargo including dangerous and oversized – Not all logistics providers have experience with less run-of-the-mill types of air freight. If your business needs to move non-standard cargo types – even only occasionally – make sure you partner with a provider that’s up to the task.
- Is it a security-listed agent? – Providers accredited as security-listed agents by the Department for Transport are able to ensure that cargo is secure and safe for transport. Ideally, the provider should offer in-house primary and secondary screening.
- Accreditations – Ensure the provider is, as a minimum, approved by the International Air Transport Association (IATA) and complies with EU Good Distribution Practice (GDP). If your business transports dangerous or hazardous goods, the provider should be able to prove that they have appropriate accreditation and training to handle such cargo.