4 Post-COVID-19 Strategies For Cost-Efficient Air Cargo Operations

The Coronavirus pandemic has significantly affected the aviation community. Flight restrictions and quarantine measures precipitated capacity shortages and budget constraints. Even with hundreds of people being vaccinated worldwide, authorities remain cautious about relaxing travel restrictions. With passenger traffic still at low levels, the industry must look at alternative revenue streams. The increasing demand for e-commerce goods and COVID-19 vaccine distribution puts air cargo as a gateway to thrive during the pandemic. This places extra pressure on air cargo operations, which need to be more cost-efficient than ever.

Strategies to promote efficiency in air cargo operations

1. Working together to find cost savings

From ground handling companies to regulators – the success of air cargo operations relies on a series of stakeholders. Fostering collaboration between them might be a complex task. The use of unsuitable methods for data sharing, inflexible policies, or unfamiliarity with certain topics are some of the challenges that exist. More than ever, improving cooperation among cargo chain actors is critical to optimally approach the current market situation and create alignment in a common response.

Vaccine shipments must be delivered on time so that countries can carry their vaccination programs as planned. Since airfreight capacity remains contracted, stakeholders need to adapt their processes and resources throughout the supply chain to avoid disruptions.  Under a common strategy, they can benefit from their innovation capabilities.

Governments also play a decisive role in facilitating an efficient air cargo ecosystem. Delays in permit approvals for the movement of airfreight can hinder connectivity and lead to high costs. Likewise, authorities should ensure that key industry partners have access to the latest COVID-19 operational and regulatory guidance.

2. A new approach for network planning

A central element for efficient air cargo operations is the generation of optimal flight schedules. This concurrently helps carriers to define the market potential and allocate their resources. Traditionally, designing a network plan is complex, time-consuming and involves different expertise. Since the pandemic affects reliability in demand forecasting, the process of defining flight schedules is even more challenging.

Forecasts need to be adaptative and self-correcting in order to best incorporate changes. By increasing data intelligence, analysts can better predict load factors based on average values registered in the last few weeks. Doing so rather than taking equivalent periods in the past as a reference improves accuracy since the current situation is unprecedented.

Another crucial point is route prioritization. With restrictions to international flights still in force in several parts of the world, carriers keep limiting their services. Therefore, it is crucial to orient network planning towards identifying core routes depending on demand. From a series of mandatory and optional flights, decision makers should determine the best combination to maximize cost-efficiency network-wide.

Efficient end-to-end delivery – making ground handling and infrastructure capacity available for air cargo operations is paramount for the correct function of the network.

3. More connectivity through cargo-friendly airport facilities

With demand for parcel delivery by air on the rise, achieving faster transit times and more transparency gain relevance. Enhancing efficiency in air cargo operations does not only depend on the expertise of the responsible staff. Operating in modern, automated, but above all fit-for-purpose terminals helps to improve overall performance. Likewise, it generates trust in the customer´s eyes.

In fact, airports following a cargo-centric approach are of great value during the pandemic. Even if they are small facilities, these airports give shippers more room to move compared to major gateways. Then the last ones have as core business the passenger transportation and cam deploy their resources and infrastructure accordingly. However, this does not mean that carriers should completely avoid hubs to prevent them from running into high costs. They should strive to prioritize cargo-dedicated airports in their network planning and combine them with big-city terminals, as required.

4. Advanced management of unit load devices

With approximately one million unit load devices (ULDs) in service, the optimization of air cargo operations would not be complete without taking a look at these valuable parts. Since ULDs contribute to transport safety, their unavailability could cause delays and even flight cancelations. Moreover, with an increasing number of wide-bodied aircraft being used for cargo-only flights, an adequate handling of these units is key.

Ensuring that the right unit load device is available in the right place, at the right time, and in the right condition is critical for a smooth airfreight flow. However, keeping track of ULDs is a known issue for the airfreight industry. Difficulties lie in gaining real-time information such as what is their current location, which units are empty, and which are defective. The traditional code-based identification system has proven not to be cost-efficient. Solutions based on artificial intelligence in combination with telematics facilitate the monitoring of ULD movements. Applying up-to-date data, the system allocates the load devices based on their specific status information.

Taking advantage of transporting cargo by air

In times when air travel remains restricted, it is important to understand the strategic value of the airfreight supply chain. Experts estimate that passenger traffic may not return to 2019 levels until 2024 at the earliest. Exploring opportunities in the cargo sector must be accompanied by a clear strategy and having the right partners. With limited capacity and budget and a demand expected to enlarge, the industry must seek more cost-efficient air cargo operations.

By enhancing collaboration, stakeholders benefit from the capabilities and strengths of all chain partners. In the past, communication could only take place by phone. Today, modern allocation systems enable sharing critical information seamlessly, facilitating deeper operational insights. By gathering varied and valuable input, carriers can optimize their network planning and airports can define ways of action to adapt their facilities for cargo handling. This enables aviation to be more resilient and agile.

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