‘Positive signs in air express after a tough six months’

The airfreight express industry is a barometer and an early-warning indicator for an economy, according to Garry Marshall, MD of Bidair Cargo and executive director of the SA Express Parcels Association (Saepa). “It’s a very volatile business, and reacts very quickly as the global or local markets go up and down,” he told FTW. “If anything changes in the business lines, we are the first to notice.” The last six months have been very tough for the express airfreight industry, he added, but there are positive signs at the moment – and a small increase has been apparent. Marshall also noted that the industry had somewhat changed its status in recent times. Although in the past express delivery tended to be mainly for emergency or extremely urgent shipments, it is increasingly becoming the standard delivery option in a world where stock moves in and out of storage as fast as possible to reduce stock costs, he said. “This is particularly apparent in the pharmaceutical industry,” he added, “where the trend is to move chronic medicines direct to the door of the customer.” Although there will be brief delay hiccups as it passes through the wholesale and retail stock rooms, this is effectively a supply chain that runs direct from the manufacturer to the end customer. It also adds up to hundreds of thousands of local shipments every month in the destination country – and where air express often has to supply the product stock to support them. “This business-to-consumer delivery is ratcheting up to a great extent,” Marshall said. “We are also noting that middlemen are being cut out of the chain, and products now move directly to the shipper.” Another area of change and growth, he added, is the on-line business – as people become more technologically enabled. “Now someone in a small country village demands the same service as in a major suburb of Johannesburg, and that needs a complete re-planning of your delivery network. That ‘last mile’ of the supply chain is becoming more and more important.” Once again, Marshall cited the pharmaceutical industry as a choice example of this trend. The various modes of transport are also being viewed in a new light, according to Marshall “The mode of transport is purely a tool,” he said. “If I can send a truck from Johannesburg to Potgietersrus, and can do it in three hours, then road transport gains preference over air. But, if a road is blocked, or the distance too great, I’d use air. It’s a simple choice. “There is also a definite trend from air transport to sea. That’s based on comparative cost – and people must adjust their supply chain to suit the slower mode of sea transport.” But the well-tested theory of just-in-time (JIT) stock delivery planning overcomes any time element in the air-sea switch. That air-sea trend is also encouraged by the increasing cost of airfreight, Marshall added. “Fuel, the high capital cost of aircraft and security demands all add to the cost,” he said. But air is here to stay. There may be a bleed-off to other modes, but it will come back, because air transport is a safe, reliable and fast transport mode.”