Amid the ongoing airfreight capacity crunch, shippers are increasingly on the hunt for charter flights – and alternative shipping strategies – and are putting huge pressure on forwarders to ensure they guarantee space throughout the year.
If they don’t, shippers may follow Amazon’s example and take matters into their own hands, at least to some extent.
Two years ago, the United States Federal Maritime Commission granted the e-commerce company’s request to become its own non-vessel operating common carrier (NVOCC) and freight forwarder between China and the US – which allows the retailer to directly negotiate rates and secure capacity with ocean and airfreight carriers.
Satish Jindel, president of SJ Consulting Group, believes that because of the capacity crunch and rising airfreight rates, Amazon.com will increasingly control more of its supply chain rather than using third parties.
“Part of what Amazon is doing as an NVOCC, freight forwarder and broker is part of a bigger logistics picture of being everywhere in the supply chain so it can provide the seller the best experience. If Amazon can do it on its own, it can also cut out the margin,” he said. Adrien Thominet, group CEO for global cargo handling company ECS Group, agreed.
He said that many major shippers such as BMW had been left struggling to secure capacity amid surging demand and insufficient capacity. “Big shippers like BMW and the major pharmaceutical companies are now looking at having their own dedicated flights,” he pointed out.
The airfreight capacity crunch has not escaped Africa – especially on strong trade routes – with International Air Transport Association (Iata) data consistently showing airfreight demand (although there was a 2% demand dip in May this year) on the increase.
Capacity is increasing as well but seemingly not in line with the increase in demand. An African airline insider who wished to remain anonymous told FTW that he believed shippers on the continent could potentially opt for charter flights to manage capacity crunches but that these were more expensive and many shippers could not afford the rates.
“It would only be viable if the cargo was high value and/or extremely urgent,” he said, pointing out that the airfreight capacity crunch was far more likely to drive inter-modal shifts.
