All eyes are set on airfreight, expanding delivery options for shipping companies.
Key Details
- As online shopping continues to gain popularity and delivery slows, companies are opting for planes to fuel fast turnaround, filling in and adding on where ships cannot deliver.
- Port congestion, lack of workers, and the continuing war in Ukraine has drastically slowed down shipping deliveries.
- Ocean shipping lines are now turning to planes to get products delivered on time.
Why it’s news
The container shipping industry is dominated by three European companies: AP Moeller-Maersk of Denmark, CMA CGM Group of France, and Mediterranean Shipping Co. of Switzerland.
The big three have not bothered with air-freight in the past as it is more expensive and focused fully on shipping containers. But as the supply-chain issues continue and packages are continuously arriving late, customers are opting for air-shipment and the container shipping companies are scrambling to get into that field.
“You can’t rely only on ships anymore,” says Abbie Durkin, owner of Palmer & Purchase, a women’s clothing and accessories boutique. “I’m flying in our entire winter collection to make sure it arrives before Christmas.”
The airfreight industry grew more than 21% last year from a year earlier, based on a metric measuring tonnage and distance flown, according to the International Air Transport Association (IATA). Revenue hit $289 billion, up from $238 billion in 2020 and $264 billion in 2019 before the pandemic, according to Wall Street Journal writer Costas Paris.
IATA expects world airfreight to grow another 4.4% this year alone. In the past three years, 400 freight planes were added to the world fleet, a 20% rise, according to plane making company, Boeing. The company also estimates the global freighter fleet will increase to more than 3,600 in 2040 from around 2,000 now.
Shipping companies are striking deals with airlines to carry products so they can continue getting items delivered to customers on time.
