AirCargo 2021: Pandemic emphasizes need for investments in air cargo infrastructure

The recent surge in e-commerce cargo due to the pandemic has exacerbated capacity shortages for air cargo, emphasizing the rise of last-mile delivery providers and the need for digitalization of processes and investment in air transport infrastructure at major airports. The rise in e-commerce resulted in businesses digitizing and a rapid increase in inventory replenishment, according to today’s AirCargo 2021 webinar. Suddenly, businesses are no longer replenishing stock once a quarter, seasonally, or twice a year, but it is never-ending, and carriers are not equipped to handle that type of steady demand, said panelist Cathy Roberson, president of Logistics Trends & Insight and Air Cargo World columnist, during the webinar. While there have been capacity constraints across all modes of transportation, Roberson emphasized the lack of investment in air cargo infrastructure at major airports. U.S. President Joe Biden’s infrastructure plan allocated $25 billion for spending on airports, including funding for the Airport Improvement Program and movement of passengers, but nothing for air cargo, said Roberson. [caption id="attachment_68772" align="alignright" width="300"] Photo courtesy of DHL.[/caption] “There were a lot of investments going towards the [airports], but where is the investment for air cargo?” asked Roberson. “I’m seeing a need for that, and I think a lot of passenger airlines have woken up and realized [the need].” An audience poll during the webinar suggested that 48% of industry leaders believe that supply-chain bottlenecks impacting the freight transportation industry are attributed to pent up demand due to COVID-19 constraints, highlighting the need for added investment within the industry in order to combat capacity issues. The lack of truck driver equipment and availability was the second most likely reason for supply-chain disruptions. Aside from investing in major airports, Roberson and fellow panelist James Rice, deputy director, Center for Transportation and Logistics at the Massachusetts Institute of Technology, agreed that the automation of procedures is a great tool to provide visibility and transparency to be able to track a shipment. While manufacturers and freight forwarders are often partners, identifying the smaller-level partner is difficult without collaborative technology, said Roberson during the panel, and is a vital part of getting goods to market without issues. As a result, startups and other third-party logistics companies have been identifying new needs in the airfreight market. “Because of the rise in e-commerce, and the fact that we have really three major nationwide last-mile delivery providers, it really hit home with a lot of folks when they started noting delays in packages or lost packages as a whole, and UPS, FedEx and the post office all struggle with the sudden surge in packages and it's causing a rethink for a lot of shippers,” said Roberson. While automation and new logistics startups will not completely solve capacity issues, the rising awareness of air cargo as a vital industry throughout the pandemic will continue to positively influence the improvement of the industry. “We were already on a trajectory for a slow but steady increase in the amount of businesses using e-commerce as opposed to going brick-and-mortar,” said Rice. “COVID has just accelerated that... Is it going to retrench and go back? I don’t think so, companies have adopted systems that will allow faster fulfillment... and it’s going to continue.”

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