Is Air cargo the new alternative for foreign trade?

The COVID-19 pandemic affected many economic sectors, and maritime transport was not the exception. After two years of the pandemic, maritime transport still faces a negative impact.

According to the vice president of the World Organization of Cities and Platforms Logistics, Mr. Hugo González, the logistic problems were generated by the pandemic. For example, bottlenecks in some ports and a shortage of containers- caused a disproportionate increase in the costs of maritime transport and delays in the supply of products. This affected the business of importers and exporters around the globe, especially small and medium-sized businesses.

Therefore, since maritime transport covers 80% of foreign trade (according to the World Trade Organization), some merchants have searched for other alternatives to supply their products, such as air cargo. Moreover, air cargo has increased due to the rise of e-commerce during the pandemic.

One of the essential characteristics of e-commerce is the immediacy of the business (purchasing and delivery of products). This immediacy cannot be achieved with maritime transportation (especially now that it is currently facing logistics setbacks); therefore, more and more businesses that offer e-commerce are looking to air cargo, which is far faster than maritime transportation.

The International Air Transport Association published the article “A new era for air cargo,” which stated that “E-commerce has revolutionized the way we do logistics. With online businesses and consumers requesting fast deliveries, operating models evolved to speed up transportation.”

The increase in demand for air cargo has become extremely crucial that some shipping companies are starting to launch their own cargo airline.

Such is the case of Maersk, who informed this month that it will re-launch its cargo airline “Maersk Air Cargo” to offer an essential service combining air, ground, and sea services to its clients. The airline will place its logistic hub at the Billund Airport and will start operating in the second half of the year.

IA insight

Foreign trade is constantly evolving, and it is vital for our company to keep our clients informed about how the foreign trade is moving to help them to make the best decisions for their companies. As foreign trade is slowly moving to e-commerce and -with that- to air cargo, it is important to keep an eye on this sector, since it could be the next generation of foreign trade

Witten by: Anna Paola Rodriguez?

*This article is informative and is not to be used as legal, economic, or commercial advice.

Sources: Eleconomista, Claa, Iata, Transporte