Product Champions: Everything Airfreight with Thomas Rogers

Like most industries, airfreight was initially left reeling from Covid. But when supply chains grounded to a halt, the aviation industry proved key to providing resources to both businesses and the public alike. It became essential, leading to a rise in rates and demand.

We asked our leading expert Thomas Rogers what this meant for the industry as well as his expectations for the future.

How has airfreight changed over the last 3 years?    

Airfreight saw steady growth in 2019, but since then demand has only become increasingly volatile. This is in part due to Covid disruption still plaguing supply chains, along with economic uncertainty.

Brexit has also played a role, bringing with it additional costs, checks and delays. Whereas before, the free circulation of goods was taken as a given. Now customs procedures for items transiting Europe have become a daily part of life.

Consequently, despite the fact that the same planes fly the same routes, it’s now a constant challenge to predict where prices will be in 2023, and we’ve seen some shippers be squeezed out as a result.

What have been the biggest challenges facing the industry in 2022?

Supply. The infrastructure is there, the demand is there (albeit less than next year), but there aren’t the services to match. Airlines have played a significant role in this over the past two years. By dropping certain services through their own commercial decisions, airlines have limited supply for certain importers and exporters.

What happens is that businesses start crying out for goods which are either late or unavailable. This snowballs and disrupts so many different cogs in the machine that airlines then capitalise and increase rates in line with demand. Likewise, when demand has been low airlines were left with no choice but to limit flights. This has been a situation made worse thanks to the introduction of a new Customs Declaration System (CDS).

As part of Brexit, the UK tasked HMRC responsible with the declaration of imports and exports. CDS requires a larger range of data for entries. And while we expect this new system to eventually improve what we have now, there are teething problems. So much so that HMRC has had to delay the deadline for businesses switching platforms indefinitely.

What do you think 2023 looks like in the airfreight world?

Already we’ve seen airfreight routes re-open and general rates stabilise. I expect this will continue throughout the peak trade period, which will be dealing with less demand than usual forecasts.

Next year’s rates will continue to steady until they reach their new ‘normal’ levels – provided that Covid doesn’t spike throughout the winter that is.

In this respect, 2023 will be like 2022. More solutions will enter the market as routes continue to re-open and confidence returns.

What advice would you offer businesses looking to invest in airfreight?

If you’re new to the industry, do as much research as you can. Reviews from trusted sources are paramount when finding an agent and will lead you to a provider who shares your values.

After all, trust between you and your chosen agent is necessary if you hope to deal with fast-changing circumstances. It’ll also help you to take control of as much of the supply chain as possible.

More control means greater security of your figures, as well as enhanced visibility of your cargo. You’ll also increase productivity and give your team or agent greater accountability. These small wins can have a massive day-to-day impact.

Where Cardinal can help

Not only do CGL have offices across the UK, but also across the globe. Our clients can leverage this infrastructure, along with our relationships and expertise to transport their goods and exceed customer expectations.

Sound good? Get in touch today and see how we can help you improve your supply chain process.