The cargo and logistics industries are suffering many issues at the moment. The pandemic has brought huge increases in prices, problems with availability and on-time delivery, and staff shortages in many areas. Airport congestion is also having an ongoing impact, with many airports experiencing freight congestion.
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Cargo backup up at airports globally
As we head towards the end of the year, several major airports around the world are reporting issues with cargo congestion – resulting in delays to ongoing delivery and transportation.
Many airports across Europe, the US, and India are experiencing problems. The Loadstar reports particular problems at Chicago O’Hare, Amsterdam, and London Heathrow
At Europe’s largest freight hub of Frankfurt, there are reports of full warehouses, diverting cargo flights, and waits of several days for cargo to be loaded. Jason Breakwell, commercial director for pan-European air freight road feeder services operator Wallenborn Transports, explained to Lloyds Loading List in November:
“There has been significant disruption at Frankfurt since the start of October… and the situation is still not good. Overflow warehouses at Frankfurt have also become saturated and trucks have been waiting up to three days to be unloaded. The diversion of flights from Frankfurt initially eased some pressure but ultimately led to logjams at other airports because cargo could not be dispatched to Frankfurt.”
Disrupted supply chains linger through the pandemic
More freight switching to air
The situation has arisen as air cargo volumes expand. As problems continue with sea shipping, more and more companies are turning to air cargo. London Heathrow airport, for example, had seen a 500% increase in cargo flight by the middle of 2021.
Sea shipping rates have increased dramatically. In August, the World Container Index showed rates on major routes up an average of 360% from the year before. On crucial routes from China to Europe, it is up over 650%. Combined with this, congestion as seaports and COVID-related uncertainties and closures are making delivery times very hard to predict, with many companies experiencing long delays.
Labour shortages remain a key problem
Alongside high cargo volumes, there are issues with onward forwarding and transportation. Labor shortages in the industry have seen companies reduce their collection schedules.
Storage space at most airports is fixed (at least in the short term), and at the same time, cargo volumes coming in are rapidly increasing. The net result of increasing input and reducing output is congestion.
Some airports have additional labor challenges. For example, at London Heathrow, cargo needs to be transported by truck through a cargo tunnel, requiring specialist drivers.
Similar situations have been seen in many industries as the pandemic continues. Hospitality and leisure, as well as the wider logistics sector, are suffering. There are many contributing factors, but the trend for workers to move away from this industry continues. There are shortages of staff in airports, as well as drivers and logistics workers for onward distribution.
Explaining this, Robert Fordree, head of cargo for Menzies, said to The Loadstar:
“There are lots of labor challenges. The pool we have traditionally fished in is getting smaller and smaller – people who used to work at the airport are now going to competing industries. Everyone is fighting for the same fish, so congestion is now in part due to labor availability, experience and knowledge.”
Return of passenger services also causing disruption
During the pandemic, the sudden and dramatic reduction in passenger flights caused many problems in the cargo sector. Supply routes, and pricing, are based on the availability of hold space on cargo flights, as well as dedicated cargo flights. With this reducing and disappearing completely on some routes, operations had to change. This was a major driver of significantly increased pricing.
Passenger flights and hold capacity are now returning, but this is badly timed with airport congestion. Passenger flights are, of course, much less flexible in schedules than cargo flights and will not change route or time based on capacity. With operators making use of such space once again, combined with ongoing high numbers of cargo flights, this adds to the problems.
Robert Fordree explained how this was affecting his company to The Loadstar, saying:
“What we have seen is that where airlines operate passenger freighters, or passenger operations with few passengers, they are more amenable to adjusting their schedules, especially to hubs. But as passengers start to come back, airlines do what the passengers want, and we have less ability to flex schedules.”
2020 and 2021 have shaken up the cargo and aviation sectors. Operators have no longer been able to rely on well-established passenger operations to assist with cargo. Changing flight patterns, rapidly returning demand, and widespread labor shortages are combined to make airport congestion a real problem.
This is worsening over the business Christmas period but should lessen into 2022 as the supply rush slows. However, the key problems remain. Although the industry will undoubtedly try to find solutions, COVID is likely to continue to cause unexpected switches and challenges.
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