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What's Trending in Air Freight Shipping in 2016

Posted in Shipping on Jul 29, 2016, tagged with freight shipping, trends

Air freight shipping has one big advantage: speed. For emergency shipments, rush shipments, international shipments and shipments to geographically remote areas (e.g., Alaska), an air shipment’s advantages make the additional cost a win-win value for both shipper and receiver.

Changes to the air freight shipping industry could have big impacts on consumers, but while recent events have left some things up in the air, it’s not all uncertainty when it comes to the air freight shipping industry in 2016—growth, security and shipping speed have all seen improvements in the wake of recent trends.

With that in mind, let's take a look at how air freight shipping has been affected by recent trends.

Healthy Growth … So Far

While the national and global economies have been sputtering, air freight is performing reasonably well. The International Air Transportation Association (IATA) reports 2016 kicked off with a 2.7 percent increase for January 2016 versus January 2015. At the same time, load factors are down slightly, negatively affecting air freight carrier efficiency and profitability.

Uncertainty Ahead

The health of the air freight industry is enhanced by free trade and growing economies in all regions of the world. While economic predictions are difficult under any circumstances, the recent Brexit decision has created more than the usual amount of unpredictability. Some fear Britain’s decision to leave the European Union will ignite trade wars and the implementation of tariffs, along with disrupting economies worldwide. However, the true effects of Brexit and its aftermath will take several years to play out. Currently, U.S. equity markets are experiencing all-time highs, so all we can say with certainty is that the jury is still out.

Security on the Rise

Air freight companies are investing heavily in security technology, to prevent theft and product damage. Luxury items, pharmaceuticals, and other perishables are frequently transported via air freight shipping. Shippers must be able to track shipments accurately throughout the delivery cycle, as well as (in many cases) monitor and maintain temperature and other environmental variables with precision.

It’s All About Speed

A trend with positive implications for the air freight shipping industry: the explosion in e-commerce and the need for speed in both the commercial and consumer sectors. On the commercial side, manufacturers and distribution operations are constantly striving to reduce inventory, making rapid, just-in-time delivery more important than ever. Air freight shippers working in partnership with LTL (less-than-truckload) carriers have an opportunity to capitalize on this need with creative shipping solutions. On the consumer side, customers are growing more and more accustomed to ordering a product online today and receiving it the next day. Many customers are willing to pay a premium for instant gratification, an excellent development for the air freight industry’s future revenue and profit equation. Online retailers are rapidly developing multi-modal shipping strategies (e.g., a systematic combination of air, rail and truck) to make rapid deliveries on a national, continental and even global basis.

Learn more about the difference between air freight and ground freight shipping.