Forwarder’s Forum: Storm warning ahead: Airfreight demand expected to surge as manufacturing resumes in China

The slowdown of manufacturing caused by COVID-19 lockdowns in China has mostly been viewed as a low point by the logistics and transport industry, but there is a strong case that this period will amount to the quiet before the storm as a subsequent tsunami-like surge in cargo volumes will inflict far greater pain on the sector. [caption id="attachment_93852" align="alignright" width="395"] Brandon Fried, Executive Director of the U.S. Airforwarders Association[/caption] Concerns over skyrocketing fuel prices driven by the war in Ukraine combined with China's strong-handed approach to COVID -19 control have not been welcome news to the global economy. Inflation is at its highest level in 40 years, eroding consumer purchasing power, while a contraction in global exports gives justifiable cause for the airfreight forwarding industry to forecast gloomy skies. As factories in Shanghai are starting to reopen , however, China is prioritizing the rapid resumption of critical goods manufacturing, such as cars and semiconductors, to satisfy suppressed demand. This increased production will create a storm-like surge in cargo and a ripple effect elsewhere. As a result, delays will increase not only in the port of Shanghai, where thousands of boats wait to be loaded, but in the United States, as the expected surge of these goods will once again undoubtedly inundate Southern California maritime ports. In addition, we should brace for a similar onslaught of air freight shipments at major gateway airports and a worsening of the lingering airport congestion problem we continue to face. Despite the lull in air cargo demand over the last weeks , airport cargo area congestion remains throughout major airports. As a result, truckers wait for long periods to tender and recover cargo while shipments get delayed and incur high costs in waiting time fees and storage charges. These delays and increased costs are why the Airforwarders Association (AFA) is driving an initiative to help find solutions and improve cargo throughput at these facilities. After surveying and receiving more than 400 responses from its membership and other associations — including airport managers, forwarders, airlines, truckers and other relevant stakeholders — we know the challenge continues due to several critical factors. As a result, the AFA’s Airport Congestion Committee agreed to focus on technology and automation, service standards, airport facilities, infrastructure, staffing, hours of operation and regulatory and paperwork challenges. The 35-member group is now drafting a recommendation that will serve as a tool to engage relevant stakeholders such as state and local officials, legislators, city planners, regulators and the White House. Experience says that while one voice can be influential, a group working together is even more effective. Therefore, other organizations are participating, including Airports Council International-North America, Airlines for America, the Airline Service Providers of America and the National Customs Brokers and Forwarders Association of America. The goal is to drive improvements in areas including enhanced electronic communications between all airport stakeholders, improvement in cargo area infrastructure and modernizing handling systems to improve operating efficiency. The rise in unfavorable global events certainly gives us reason to be concerned about upcoming challenges. However, we should anticipate a surge in cargo volume resulting from China ending its COVID-19-related lockdowns in the short term, making addressing the airport congestion challenge more essential than ever. When this seemingly endless hurricane of occurrences subsides, hopefully, this vital work will leave our airports prepared for what future storms may bring.

Forwarder’s Forum: Storm warning ahead: Airfreight demand expected to surge as manufacturing resumes in China

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