Airfreight companies are experiencing rapid growth but face challenges in meeting demand due to capacity constraints, as digitalisation and standardisation have become crucial for improving efficiency and sustainability.
Speaking at the Nordic Air Cargo Symposium 2024, Martin Drew, Chief Strategy and Transformation Officer at Atlas Air, shared his insights on the evolving landscape of airfreight and the opportunities it presents.
Reflecting on the rapid rise of companies like Alibaba, Shein, TikTok and Temu, Drew emphasised their remarkable growth trajectory: “Companies such as Temu seemed to have come from nowhere in the last 18 months. And the growth rates are incredible, and if they continue the same, these companies alone will drive worldwide airfreight growth well above predictions.”
However, with this growth comes the need to meet the soaring demand for air cargo services, with sufficient capacity required if the industry is to meet its potential: “A potential constraint on these companies’ ongoing expansion strategies is the availability of sufficient capacity to meet the increasing demand. We anticipate a continued shortage of large freighter capacity over the next several years due to planned retirements and limited new capacity entering the market.”
Drew stressed the importance of collectively addressing industry challenges to ensure sustainable growth, improved digitalisation, and standardisation across airfreight operations: “Airfreight is still lagging behind. While we must recognise the complexity of freight movement involving numerous stakeholders, the industry must persist in its efforts to standardise and digitise information exchange among all parties.
“This commitment is essential to providing our customers with the highest level of service.”
Keen to be green
Turning to sustainability concerns, Drew underscored the industry’s responsibility to reduce emissions and work towards decarbonisation: “As we all know, sustainable aviation fuel (SAF) is in very short supply, and demand will continue to outpace supply for the foreseeable future.
If the industry is to get on the path towards meeting its decarbonisation commitments, he was clear that “we will need support policies by incentivising the production and use of SAF.
“DHL, UPS and FedEx have all made public commitments to reduce CO2 significantly by 2030-2035. In Atlas, we have also aligned with the industry goal of net zero by 2050.
“It’s not only because we want to be good corporate citizens and it’s the right thing to do for the environment, but it’s also because the shippers that we work with are increasingly looking at decarbonising their supply chains.
“So, let’s make sure sustainability does not become another reason for heavy freight to shift to other modes in the future.”