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Airfreight Prices Reach New Heights Ahead of the Holidays


Airfreight Prices Reach New Heights Ahead of the Holidays

Numerous analysts agree that the upcoming holiday season could bring numerous supply chain challenges resulting in sold-out products, delayed replenishments and disappointed customers. Airfreight cost rises are already emerging as an obstacle in the mix.

Capacity Shortages and Rising Demand

Insights from airfreight logistics professionals and other people in the know suggest that reduced capacity on flights coupled with surging demands are two factors contributing to the current conditions.

An analysis of air cargo rates for September 2021 illuminates how all regions could experience the effects of more logistics professionals availing of air cargo services when they can. The push to secure spaces has pushed some major brands to invest in their own planes. However, smaller retailers are often left out because they lack the resources to cope with higher rates, let alone dedicated aircraft.

Global demand levels were up by 9.1% compared to figures collected for September 2019. Unfortunately, available capacity is 8.9% below pre-COVID-19 levels. However, other sources clarified that although volumes are up, not all planes are full.

When the report drilled down into regional situations, it revealed that Asia-Pacific airlines saw international cargo volumes rise by 4.5% compared to September 2019 figures. European carriers saw a similar 5.3% volume increase, and demand went up by 6.9% for the North Atlantic trade lane.

African, Middle Eastern and Latin American carriers felt even more intense pressure during the studied period than in September 2019. African airlines coped with a 34.6% jump in international cargo demand, while those in the Middle East and Latin America had overall upticks of 17.6% and 17.1%, respectively. The capacity shortage was particularly pronounced for Latin American air cargo specialists, with availability down more than 24% on 2019 levels.

Air Cargo Still an Appealing Option

Since goods often travel incredibly long distances to reach their destinations, intermodal transportation is increasingly necessary. It involves using at least two methods, such as a ship and a truck, to get cargo to the right places. However, it’s not always easy to choose the best options. That’s because airfreight is not the only sector saddled with extra demand.

In the United States, March 2021 container volumes for the Long Beach and Los Angeles ports were up 97% on the previous year, resulting in the busiest March recorded so far.  Also, the United States, Europe and Great Britain are among the places dealing with truck driver shortages.

While facing those obstacles, logistics professionals may understandably conclude air cargo carriers are among the best options, provided they’re willing to pay the associated rates. One issue is that many experts believe port backups won’t resolve anytime soon. A proposed solution to keep some United States ports open 24 hours may not be enough to make significant impacts, either.

Those realities have pushed more people to consider air cargo as a possibility. Bruce Chan, a senior analyst at investment bank Stifel, said, “Terminals and container yards are full. Drayage capacity is tight due to structural driver supply issues, as well as compounding disincentives to pick up from ports as a result of the delays.”

He continued, “As such, we believe there is a contingent of inventory that will not arrive in time for the seasonal rush via ocean and that freight may be converted to air.” Numerous logistics professionals have nonetheless warned consumers to expect product shortages this year. Some have recommended that shoppers take pictures of items and put them into holiday cards in case the actual products show up late.

A Few Things to Know Before Considering Airfreight Options

Shipping things by air is often the most desirable method when speed is a priority. Plus, delicate items, such as electronics and designer clothing, are among the products that most commonly travel in planes.

Airfreight cost averages were typically higher than other transportation methods even before these recent rises. Therefore, shipping more expensive items by plane was a popular choice because the hope was that the higher product revenue would justify the expenses.

However, carriers don’t accept goods in all cases. For example, aerosols with an aggregate weight of more than 150 kilograms cannot travel in a passenger aircraft. People should take the time to verify that cargo specialists will accept their products rather than assuming that’s the case. All forms of product transportation require considering things like weight and flammability to ensure safety.

It’s also more complex to prepare products for shipment by air versus sea. The cargo gets loaded onto a pallet in a warehouse, wrapped with plastic, and secured with cords and ropes. Packing the products together as tightly as possible is critical because shifting significantly during a flight could cause the plane to crash.

These details mean that even if someone is prepared to deal with rising airfreight costs, they must take the time to check that plane-based shipments are right for their products and their overall needs.

Passenger Air Travel Increases Could Decrease the Crunch

Even if there are no significant airfreight cost decreases on the horizon, an expected bump in passenger flights could ease the current capacity issues. For example, the United States recently reopened its borders to many international travelers who can show proof of their COVID-19 vaccinations.

The largest cargo holds in passenger planes’ bellies accommodate the equivalent of two 40-foot freight containers. At one time, they carried as much as half of the total air cargo capacity. Many airlines expanded their cargo space during the pandemic, but it still did not compare to levels seen previously.

Part of the reason was that airlines most dedicated to expanding cargo capacity limited the changes made. Representatives worried that demand could dry up in the future, meaning any efforts to expand cargo space might only bring short-term payoffs. However, the anticipated passenger flight boom won’t universally affect available areas.

Logistics professionals expect the most benefits to come from planes carrying people between the United States and Europe. However, the effects will not be as notable for transpacific flights.  For example, many pandemic-related travel restrictions remain in effect for China. Plus, more passengers originating in Europe traveled to the U.S. than to Asian destinations even before the pandemic.

Airfreight Logistics Are Continually Complex

People considering shipping goods by air have many pros and cons to weigh, and that was the case before rates began climbing. Being aware of those aspects will help them conclude whether the cost is worth the money when considering all other factors.


Emily Newton is an industrial journalist. As Editor-in-Chief of Revolutionized, she regularly covers how technology is changing the industry.



Prior to the COVID-19 pandemic, companies were increasingly relying on 3PLs to manage their supply chains, largely thanks to the steady rise in e-commerce and the impact of the digital marketplace on traditional brick and mortars. However, no one could have predicted the disruption of 2020, as retailers scrambled to move an unprecedented amount of goods quickly and safely in response to consumer demands. In fact, the Institute for Supply Management reports 97 percent of companies have been impacted by supply chain issues caused by COVID-19.

The pandemic forced companies to reevaluate their entire supply chains almost instantaneously to successfully adapt and meet the demands of the changing environment. Because of this, the use of 3PLs rose to the forefront for many brands in 2020 as they looked for strategic, critical guidance to best meet the challenges of the day.

Approximately one year into the pandemic, now is an optimal time to reflect on the top challenges that faced 3PLs during this period and the solutions that will continue shaping our industry in 2021 and beyond.

Problem: Pre-Pandemic Labor Shortages Escalated

The labor shortage is not a new challenge, but one that was exacerbated by COVID-19. Pre-pandemic, the steady rise in e-commerce was creating significant labor issues. In fact, CBRE reported e-commerce created demand for an additional 452,000 warehouse and distribution workers in the U.S. between 2018-2019.

On the transportation side, the driver shortage is ranked as the No. 1 industry concern, according to the American Transportation Research Institute. This is largely due to the higher-than-average age of the existing workforce (46 years old) and the subsequent impact upon exiting for retirement without having younger recruits to fill the void.

With these challenges already facing our industry, the pandemic took them to new heights as more workers were needed to accommodate the massive uptick in shipping volumes due to e-commerce. COVID-19 also presented new considerations, such as rising wage pressures due to the pandemic’s economic, political and public health challenges, as well as older drivers opting for early retirement out of safety concerns.

Solution: Incorporate Automation Advancements 

Automation is increasingly being utilized as a solution to help manage labor shortages. From a warehouse perspective, this means more frequent use of automated guided vehicles, goods-to-person robotics picking, and automated racking and shelving techniques to improve efficiency and cost-competitiveness.

GEODIS recently conducted a beta test at a distribution facility in Indianapolis to pilot the increased use of robotics in its warehousing efforts. Using 21 robotic units that offered an autonomous and smart-picking solution, a leading women’s apparel brand saw a 100 percent increase in operational efficiency. This is just one example of how automation can increase efficiencies and address labor market concerns. 

While automation has largely taken off within warehousing, we expect to see strides moving forward to specifically address driver shortages. 2020 was filled with exciting advancements in this realm, and we will continue to see innovative solutions like autonomous vehicles and drone delivery enter the market at a greater rate.

Problem: Capacity Shrank While Demand Surged

In 2020, the traditional peak season came and never left from a volume perspective. But while demand surged, capacity evaporated. As more than 50 percent of air freight is transported via cargo holds of passenger planes, capacity plummeted as flights were cancelled. For ocean freight, the lack of goods primarily out of Asia created a ripple effect that was felt globally. All the while, road shipments faced capacity issues due to skyrocketing e-commerce orders coupled with ongoing labor shortages.

The capacity constraints in the parcel delivery network were particularly a shock to the system for many in 2020, which was largely a byproduct of this acceleration in e-commerce. According to Transportation Impact customer data, parcel volume was traditionally 60 percent commercial and 22 percent residential prior to COVID-19. During the pandemic, this ratio drastically flipped with 40 percent being commercial and 46 percent residential. While delivery networks were previously accustomed to moving a large amount of goods with fewer stops, the process was reversed and created an immense strain on the current infrastructure.

Solution: Rethink Delivery Strategies

Due to the capacity constraints we saw in 2020, 3PLs will need to incorporate more diverse delivery strategies moving forward. For example, a solution for small parcel delivery issues is to build an expansive network that includes multiple international providers. By building and leveraging the network, it provides 3PLs the opportunity to identify the best small parcel provider to use in real time for its customers based on current capacity and shipping needs.

Air cargo delivery will be an interesting area to watch moving forward, as we continue to provide solutions that will help us solve 2020 challenges. Because of the increase in e-commerce, 3PLs will have more strategic control over flight patterns. For instance, GEODIS recently expanded AirDirect services to add a weekly flight from Shanghai to Guadalajara. 

Problem: Unpredictable Buying Patterns

In 2019, online retail sales in the U.S. amounted to $343.2 billion. By 2024, this is projected to skyrocket to $476.5 billion. 

The pandemic led to unpredictable buying patterns as consumers shifted away from brick and mortar stores to e-commerce platforms. While top e-commerce categories prior to COVID-19 were consumer electronics and apparel/accessories, the pandemic created an entire new demand for the type of goods being purchased online. In particular, demand for essential items such as groceries and health products grew in numbers we hadn’t seen before.

One of the biggest challenges of the pandemicand one that will remainwill be anticipating consumer buying patterns moving forward. Brick and mortar sales will increase as vaccines are more widely distributed, and we will see a new ratio of in-person to e-commerce shopping. The convenience factor of buying online is here to stay, but the question remains what the scale will be.

Solution: Accelerate Digital Technology

While it’s impossible to pinpoint consumers’ future buying patterns, the adoption of new technology by 3PLs will help brands build resilience. For instance, providing real end-to-end visibility will be imperative moving forward. By offering a robust “control tower” that integrates complex operational systems across all modes of the supply chain in one streamlined view, companies can best track and trace shipments, strategically manage inventory, and overall receive transparency that leads to faster and smarter decision-making.

Additionally, we will see innovative technology that offers solutions to move products closer to the end customer. For example, GEODIS recently released a new digital platform, City Delivery, that enables retailers to deliver goods directly to consumers from the closest retail store in just a few hours thanks to a combined delivery network of traditional carriers and private individuals. We will continue to see new technology that revolutionizes last-mile delivery, particularly in the urban environment, as e-commerce buying trends continue in some capacity.

Looking Ahead

No one knows what challenges lie ahead, but 2020 offered lessons to 3PLs we will take with us moving forward. Due to the pandemic’s spotlight on supply chains, we expect companies will increasingly leverage 3PLs as strategic, solutions-minded partners that will help protect and enhance their operations in the face of any challenge. By incorporating lessons learned during the pandemic, we will be best equipped to provide the solutions needed to support their growth moving forward.


As president and CEO of GEODIS in Americas, Mike Honious is responsible for freight forwarding, transportation management, business development, strategic management office, legal, accounting & finance, human resources, engineering & technology, ProVenture, shared service center and IT. He previously was the COO of GEODIS in Americas, and before starting with the company 15 years ago, he held several senior level operations positions at Gap, Inc. 

The Relationship Between Technology & Intermodal Capacity

In a world where operations don’t have an option to slow down, capacity concerns are issues that will always be a burden in the back of any operator’s mind. Whether you’re running a rail, port or even distribution center, capacity options are vital to keeping operations running–and efficiently. The last thing you want to see is a competitor taking the business you could’ve easily handled, but didn’t, all due to capacity restraints. Even worse, capacity restraints you didn’t anticipate, leaving your company seeming to look unprepared. Not only that, it ultimately tells prospective, lifelong customers that proactivity doesn’t exist in the company strategy and day-to-day operations. Proactivity is equally important as visibility.

These two features are complementing elements to operational success, but it’s nearly impossible to tap into their potential the old-fashioned way. The good news is there are options in the form of technology and innovation that stay one step ahead of you–meaning you have a system completely capable of updating you on what’s going on and what needs to be addressed, all at the click of a button while taking the stress off you. Insight given from leaders in transportation all share a common theme: visibility is key.

“There is not any difference in the requirements for [handling] truckload versus intermodal in today’s market,” InTek Freight and Logistics President Shelli Austin recently told Intermodal Insights. “It’s now falling into the need for visibility and on-time service. Before, it was the deferred ‘it will get there when it gets there’ type of freight. All successful 3PLs need to have the same real-time information for intermodal that they do for [over-the-road] freight.”

“3PLs are being asked to do more multi-leg management, particularly of drayage at both origin and destination,” says Tommy Barnes, president of project44, which bills itself as the world’s leading advanced visibility platform for 3PLs and shippers. “It is a little bit harder, but they are providing a lot more value to customers.”

Automation continues to make news headlines with its unmatched ability to seamlessly connect almost every aspect of each industry, including intermodal transportation. The main takeaway from automation integration is the level of visibility and connectivity provided among workers and companies that partner for the bigger picture. This shows customers the level of expertise and preparedness your company provides for their needs, ultimately creating competitive advantage and ensuring business keeps moving. The theme of the solution in demand is an increase in more accurate information.

“The key technology for the intermodal product is the ability to capture real-time drayage information at pickup and delivery,” Austin noted in the article. “It is easy to get the information once the container is in the possession of the rail lines. The challenge is grabbing the information from all the different truckers that can and will be used to create capacity for these moves.”

With that being said, blockchain technology continues to provide the solutions, information and visibility necessary for providers and terminal operators to ensure the measures needed are in place to avoid operational hiccups such as terminal overload and miscommunication.

More recently, Kalmar Global announced how it would provide its SmartPower rubber-tyred gantry cranes (RTGs) to Norfolk Southern in an effort to extend capacity efforts through its integrated system.

Norfolk serves as a transportation industry leader, boasting 19,500 route miles in 23 states. The company can also brag about an extensive network at every major container port in the eastern United States. Kalmar’s SmartPower RTGs were specifically chosen to improve capacity at Norfolk’s intermodal terminals in Chicago and Rossville in Memphis, Tennessee.

“We are very pleased to be able to continue our collaboration with Norfolk Southern and to support them with the optimization of their intermodal operations,” says Troy Thompson, vice president of Sales at Kalmar Americas. “The proven Kalmar SmartPower RTG provides the perfect balance between productivity and cost efficiency in a variety of container-handling applications.”

Whether it’s partnering with a company that knows what it takes to keep capacity issues minimal or implementing a technology platform—or both—the bottom line is to ensure visibility, ability and operations are not compromised. In a C.H. Robinson blog, author Phil Shook, the director of Intermodal, explains that intermodal shipping will play a role in driving business growth for American railroads, citing that “the 70 intermodal ramps continue to expand.” With this expansion will nonetheless come capacity concerns, providing even more of a reason to invest in automated technology that can keep up with rapid expansion and demand without falling behind.

In his post, Shook makes a fantastic consideration by adding that, “Knowing exactly where a shipment is in transit has quickly become the expectation rather than exception. Companies and consumers expect near real-time notifications about every step of a product’s journey—including facility and town names. And just like the truckload sector, intermodal providers are working hard to deliver.”

This snippet from his blog reiterates the need for an uncompromising level of knowledge from when and where the next load is going. Because the market and its ever-evolving nature continues more demand, it’s imperative to invest in an all-in-one transportation management system that goes beyond what an average TMS provides. Why? Your business simply cannot afford to not have a reliable TMS in place. If you’re lucky enough to find a provider that can not only provide a robust TMS but also integrate new levels of technology, even better, albeit difficult to come across.

Beyond your company’s terminal capacity management, technology integration is now the new standard to global operations. Customer demands will continue to rise, at times becoming more complex and challenging than before. Consider the missing elements in your operations strategy that ultimately hinder providing the very best to customers. Additionally, don’t forget to thoroughly educate and inform employees of changes to come, showing them how to work smarter and not harder. Through this level of anticipation, proactivity and integration, you will foster an environment that motivates instead of overwhelming.

Old Dominion

Old Dominion Meets Growing Demand with Facility Expansions

As capacity and customer demands continue to grow, leading LTL carrier Old Dominion Freight Line (OD) prepares to meet these industry needs by expanding its facilities across the country from Texas and Ohio to Idaho and Arkansas while adding more facilities to growing markets. The announces expansions include innovative technology allowing for increased shipping paces and seamless shipment transfers while reducing shipping time and adding more room for capacity and flexibility options.

“As our customers adjust to growing e-commerce demands, they rely on us to not only accommodate the additional shipments but to also help them keep their promises to their customers with fast, on-time delivery with no product damage,” said Terry Hutchins, Vice President of Real Estate. “We are excited about these new and renovated service center openings. OD will continue to invest in new capacity to welcome the growing demand and exceed our customers’ expectations.”

Among the regions now boasting renovated and improved facilities in El Paso and Lubbock, TX, Columbus, OH, and Chicago. The facility expansions and additions ultimately strengthen the LTL carrier’s market presence while maintaining customer satisfaction through upgrades and more bodies for support.

In addition to facility expansions, remodeling, and employee additions, OD will celebrate the opening of new facilities recently opened in Oregon, Idaho, Arkansas, and Georgia throughout the month of October.

Our long term strategic plan includes continual investment in our network to improve efficiencies and increase capacity so when our customers grow, we can serve them. The end goal of helping our customers keep their promises is solidified by our continued investment in new technology and service center expansion,” said Hutchins.