Over the past six months, the air freight market has been extremely unsettled due mainly to the cancellation of passenger services across the world in what we now know as COVID-19 interrupted scheduling.
This drop in capacity resulted in demand outweighing supply and therefore, air prices multiplying as global trade needed to continue. Airlines have adapted to the changing market by introducing cargo only flights, with minimal schedules to keep global trade moving.
Similarly, forwarders have adapted to the changes, while maintaining good communication and forecasting with their customers. Finding the right balance between price and transit allowed them to provide successful outcomes for cargo movements.
The market has been impacted at varying levels. We saw the greatest impact in Europe during the initial phase of lockdowns with the closing of some manufacturing. This, coupled with the increased demand for personal protective equipment (PPE) from China, resulted in the general cargo market becoming a charter market, while passenger restrictions increased.
This caused an overheated market, with the price of air freight increasing by as much as 400%. Competition for capacity to move PPE was high with both businesses and governments concentrating on supplying critical equipment.