The air freight industry is highly variable and complex; the rapid rise of on-demand ecommerce has changed customers’ expectations, while shifting fuel prices and global network growth add convolutions to shippers’ plates. In order to meet new customer demands, shippers need to pay attention to what is going on in the world of air freight. So, what major trends are shaping global air freight today?
4 Global Air Freight Trends Changing the Game
Right now, there are four main supply chain developments for both domestic and global air freight—seasonality, changing capacity constraints, consolidation, and supply chain optimization through a focus on total landed costs— that are affecting how global forwarding processes are done. Let’s take a look at those four trends:
1. Spring is becoming a busy season for global air shipping. The busiest international freight forwarding season starts in August or September in advance of the holiday season, and remains ramped up until January or February. However, in the last few years, there has also been a “spring push”. The higher spring traffic is the result of Valentine’s Day, Easter, managed carrier capacity, and the seasonal impact of home improvement. Shippers and supply chain experts should take note of the busier spring season and plan accordingly with their global forwarding provider.
2. Carriers are considering removing capacity. Total capacity hinges on supply and demand in the marketplace. Several carriers have been public about their plans to remove capacity. To help minimize the impact of possible future capacity constraints, look for a global forwarding provider who is committed to markets or regions which are important to your business.
3. Air freight consolidation is increasing in popularity. In this service, shipments from different customers to like destinations are grouped together into one shipment. The cost savings come from a freight forwarder’s ability to optimize carrier capacity versus moving shipments independently. When you compare direct shipping rates with consolidation rates, it is common to see savings of 30 to 50 percent in a consolidated move. So, the next time you ship internationally, ask your global forwarding provider about consolidation opportunities to your shipping destinations, as well as aligning yourself with providers who have established consolidation schedules in the shipping lanes you need to give you a greater chance of moving your freight via consolidation instead of direct.
4. Shippers are improving total landing costs by being flexible. It’s no surprise that transportation costs are a direct impact on total landed costs. For both domestic and global air services, there are several opportunities for customers to optimize their supply chain and reduce costs:
- Identifying points of flexibility in your operations. For example, if you need to ship items from Chicago to Hamburg, make sure you understand your full range of options. If you’re flexible on routing, you could ask your global forwarding provider to find a lower cost option of air freight from Chicago to Amsterdam with final truckload delivery from Amsterdam to Hamburg.
- Focus on your delivery schedule, not when freight leaves your facility. There are many instances when customers feel the need to ship multiple days per week, only to discover the freight is not being received in the same timeline. Numerous consolidation opportunities are lost based on the false security of getting freight off the dock as quickly as possible.
- Investigate whether your provider is able to flex depending on your needs. Don’t be afraid to ask your global forwarding provider to look at your past shipment portfolio, recommend areas for improvement, and bring solutions to the table.
For more information on total landed costs (like the graphic below) in international shipping, read and download Going Global: Building a Sustainable Logistics Model in the Age of Globalization.
Air freight has always been a speedy way to get goods where they need to go. However, with this speed comes great expense and logistical organization. By remaining on top of the trends in the air freight industry, shippers can find ways to optimize routes, reduce cost, and become preferred shippers in air freight carriers’ eyes.
With new trends in air freight, global forwarding processes have to change to keep up. Learn more about how a global forwarding services provider can optimize your international shipping operations.
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