Post Date : February 10, 2022
The growing desperation of putting products on shelves amid the COVID restrictions and supply chain crunch has put the cargo charter services on the highs. With the situation at hand getting better in comparison to last year, the question is: Will cargo charters continue the strong demand through 2022? This feature covers all the grounds, from the strong demand of cargo charters in 2021 to the growth driver to the possibility of flight demands in the coming year and a lot more.
Air Cargo Charter services is a market that consists of sales of freight-chartered air transportation services by entities (organizations, sole traders, and partnerships) that use aircraft, such as airplanes and helicopters, to provide chartered (non-scheduled) air transportation services for cargo at a toll per mile or hour for the charter of the aircraft.
The service often the last preference was taken to the front seat by organizations-making cargo charter market finish the bygone year very strongly. The global freight-chartered air transport market is expected to grow from $18.05 billion in 2020 to $20.1 billion in 2021 at a compound annual growth rate (CAGR) of 11.4%.
In 2021 cargo charters came as an innovative solution for its customers, hospitals and governments, moving vaccines, test kits, oxygen concentrators, perishables, etc. across the globe amid the disruption in the Ocean freight supply chain, and challenges faced by the airfreight industry, where there were not only concerns of a lack of air capacity but also inefficiencies surrounding ground handling infrastructure with congestion at airports, while there is also a shortage of road feeder services (RFS) capacity
The nearly decimated belly load capacity provided a big charter opportunity to key manufacturers and the e-commerce market. Due to this surge in demand for cargo charters, these planes were being operated at full capacity, unlike the pre-pandemic scenario. Numerous passenger flights operated as cargo-only as well.”~ Rajeev Verma, Chief Operating Officer, Rhenus Logistics India
Cargo jets with climate-controlled facilities have seized business opportunities in freights that require highly regulated and temperature-controlled specifications, including the distribution of billions of COVID vaccines worldwide. In addition, airline companies are retrofitting their passenger planes for cargo to capture more specialized segments, especially those that require time urgency and delicate handlings, such as pharmaceuticals, PPEs, medical equipment, and perishables.”~ Ashish Asaf, Managing Director, SA Consultants & Forwarders
Charters were the solution for most customers, as the reduced capacity on the scheduled flights had to be made up to move the freight. Many forwarders resorted to charters irrespective of their size to provide solutions to their customers and the industry. In fact, many forwarders have also now put in regular capacity with charter operators.”~ Malcolm D’Souza, Director India, Chapman Freeborn
Many forwarders resorted to charters irrespective of their size to provide solutions to their customers and the industry. “More and more companies are also turning to air charters for reliable transport of complex and time-critical deliveries. Compared to other methods of transport, air charters stand out as the most efficient end-to-end solution as they have access to more airfields and can be deployed in a matter of hours,” Mr Asaf says.
Growth drivers aplenty
Growing at an annual growth rate of 11.4% up until 2021, the global cargo charter has been pushed to new highs by the companies rearranging their operations as they attempt to recover from the COVID-19 impact, and overcome operational challenges.
With the bottlenecks at seaports and the inactivity of passenger flights, cargo charters have dominated the available cargo capacity, says Mr Verma while highlighting automotive-related industry, raw materials and perishable, Hi-Tech and pharmaceutical & life sciences (chemicals) as industries playing a major role in the market.
Shipping of perishables, vaccines, along with hazardous chemical substances requires a special skillset, expert knowledge for shipping the goods, and timely delivery. These goods are also transported through chartered cargo for quick deliveries with proper precautions. COVID has undoubtedly increased the transportation of vaccines and chemicals in the last few years.
Throwing light on how the Hi-Tech industry is driving the growth, Mr Verma says, “As a result of the pandemic, air trade growth in 2021 was also driven by high-tech commodity groups. Work from home setups demanded necessary changes at homes modified into professional settings. So, equipment like laptops, semiconductors, and ventilators had a boosted demand.”
Adding to this surge in cargo charter demand is e-commerce and the need for quicker deliveries.
This is an abridged version of the original article that was published in the January edition of the Logistics Insider magazine. To read the complete article, get your copy of the magazine.