After two relentless years of crisis, freight flows and the supply chains they support are beginning to normalise in many parts of the world. For air freight, the extreme capacity shortages and demand surges triggered by the pandemic have eased significantly, even if rates remain relatively high, bolstered by fuel surcharges. Returning passenger air services have progressively replaced ‘passenger freighters’, and air freight capacity is gradually recovering towards pre-pandemic levels, albeit with a higher proportion of freighter services.

The recovery of services has been limited in some cases by staff shortages. Recruiting and retaining staff has become one of the biggest challenges for businesses of all sorts. Companies are having to think creatively, attracting staff with better wages, conditions and facilities, with obvious cost and resource implications.

As highlighted in the Supply Chain Focus article on page 46, the extent of the disruptions during the last two years and the desire to build more resilient logistics systems – combined with the already worsening relationship between the US and China – have accelerated companies’ efforts to seek alternative sourcing locations. But rather than decoupling from China completely, most companies are opting to add alternative options – for example, a ‘China plus one’ strategy.

As freight flows normalise, pressure on certain congested airports should also ease. Nevertheless, efforts to improve and streamline airport cargo handling, for example through community initiatives and systems, look set to continue, and there has been an acceleration in community-led data sharing and cooperation. As highlighted in the Airport Cargo Communities and Systems article on page 4, the benefits of sharing data across multiple stakeholders are becoming so obvious that demand for increasingly sophisticated Cargo Community Systems – and the willingness to participate – are growing almost exponentially.

Partnership between handlers and forwarders are also discussed in the Forwarder Handling article on page 26, with multinational handlers seeing this as an area with potential. But the big forwarders also want to increase their handling control at major hubs, limiting the extent they will outsource second-line warehouse handling to third parties. Indeed, some forwarders are seeking to operate their own first-line facilities, although competition issues seem likely to limit the extent of this and continue to favour neutral third-party cargo handlers in that role, in most cases.

Meanwhile, across the freight market, there seems to be a fresh wave of consolidation, including among cargo handlers, as highlighted by the acquisition of Menzies Aviation by Agility/NAS. And the interest of investors in the freight market is further illustrated by the agreed sale of Atlas Air for more than US$5 billion. With fresh money coming into the air freight sector, further change will follow.