“A lot of alternatives to passenger aircraft were put in place during the pandemic,” Burdette explains. “Those aircraft won’t be thrown away. It will be interesting to watch the airline industry deal with its excess capacity.” CARGO BOOKING EARNS INSTRUMENT RATING It isn’t just a capacity glut that has made cargo space easier to come by. Electronic booking options proliferated in 2020 and 2021, enabling shippers and freight forwarders to compare rates and see different carriers’ availability in real time. “Digital tools such as CargoNet and cargo.one gave freight forwarders the ability to see a carrier’s rates over several days, and make quicker decisions with fewer emails,” says Cindy Cargain, air cargo pricing supervisor at Shapiro. “These tools are like priceline.com for air cargo. They have made shippers and forwarders much more efficient at using and rating that capacity.” In addition to cutting down the time it takes to reserve capacity, booking platforms also give shippers an opportunity to find and work with new carriers, explains Brennan O’Dowd, CEO and co-founder of 7LFreight/ WebCargo, a rate management and booking platform.
Despite lower capacity, Southwest Airlines reported solid third quarter 2022 profits and record third quarter operating revenues. Here, a Southwest Airlines ramp agent loads next- flight-guaranteed cargo in the aircraft.
not have used in the past,” O’Dowd says. “Right now, around 40% of global capacity is available on the 7LFreight platform for users to be able to book with. Using this technology, shippers are able to leverage available capacity in a much more intelligent way.” A CHANCE OF TURBULENCE IN INTERNATIONAL MARKETS As of October 2022, cargo space is readily available in import and export markets. But that could change, cautions Bogen Chi, director of air freight at C.H. Robinson, a third-party logistics provider headquartered in Eden Prairie, Minnesota. In Europe, for example, travel protocols were mostly relaxed during the spring and summer months, and belly space flooded the market. Even as cargo volumes sag (data from benchmarking index Xeneta shows air freight shipments from Western Europe to North America fell 1.4% between mid- March and late April), capacity climbed by 21%. But availability to and from Europe could tighten as passenger travel demand falls in the fourth quarter. Assuming cargo demand remains steady, this would create an environment where capacity is stretched and spot rates rise, warns Chi.
Prior to the pandemic, the main way to book space with an air carrier was by going to them directly. Once freight capacity went online, shippers and freight forwarders could see and compare a wider variety of options available to them. O’Dowd likens it to using a transportation management system to look for capacity in the trucking market. “Online booking tools give freight forwarders visibility into pricing and capacity from carriers that they might
Online tools offered by companies such as Flexport help air cargo shippers track goods in transit, catch issues to keep supply chains running on time, and compare costs across modes to determine landed costs down to the SKU.
44 Inbound Logistics • November 2022
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