2024 trends in air charter

Published: Tuesday, 27 February 2024

Significant geo-political issues have forced sizable changes across the logistics sector over the past few years. We asked our Air Operations Manager, Matthew Basford, to outline some of the key trends and challenges.

Q: What are the current levels of demand for air cargo and why?

A: The International Air Transport Association reported that, in October 2023, global demand for air cargo increased by 3.8% compared to October 2022, while capacity was up by 13.1%.

In 2023, we saw high demand for particular types of aircraft depending on the nature of cargo being moved. The war in Ukraine impacted the number and type of aircraft available for use across Europe and changed the routes that can be flown, increasing costs. During busy periods, aircraft availability can still be a challenge, often being one of the major factors dictating the solutions offered.

The Red Sea disruption is currently impacting automotive production, which relies on the just-in-time model. Volvo and Tesla announced pauses in production at the start of the year. This increased the demand for air charter as OEMs sought to get production back on track, including for the UK’s important March plate-change month.

Q: How has this level of demand affected Priority Freight?

A: We charter more than 2,000 aircraft per year, providing bespoke solutions to meet customers’ needs based on factors including desired delivery time and date, the start and end points, and the size and weight of the goods. We will always first propose general air freight and multimodal solutions, only suggesting air charter when no other solution is viable given the business-critical nature of the job.

If a client needs goods delivered to avoid either a production shutdown scenario or time penalties, they often need to rely on air charter – regardless of cost and environmental impact. We have immediate access to all commercial airfield locations and suitable aircraft to ensure speed, accountability and value. We have an hourly dialogue with key operators and know where their aircraft are at any one time. This gives us prior knowledge, for example, whether there is an aircraft ideally located upon receiving a new request.

Q: Is there longevity in the Just in Time model?

A: JiT’s long-term future may become more limited as businesses look at other options, such as onshoring or other regionalisation strategies. Manufacturers that had globally dispersed supply chains pre-pandemic are now looking increasingly at reshoring due to geopolitical uncertainties, sustainability pressures and a desire for greater supply chain resilience. Others are looking at onshoring or nearshoring to work with suppliers in the same or neighbouring countries in a bid to replace strung-out supply chains. The primary motivations behind such strategies are typically associated with cost, quality control, intellectual property protection and proximity to customers.  

Current thinking points to a transition away from JiT to just-in-case manufacturing, where companies establish their own surplus inventories of components and raw materials to better meet sudden increases in demand. However, implementing JiC effectively requires investment in advanced technologies, including automation, robotics, and digitalisation, particularly those that can enhance traceability throughout the supply chain.  

Q: Do you see this demand for air charter continuing?

A: With commentators saying the disruption in the Red Sea could last for months, or even escalate to impact other routes, we predict there could be an upward trend in the demand for air charter. Goods bound for Europe rely on ships passing through the Red Sea and the Suez Canal. Alternatives are far from favourable; going around the southern tip of Africa adds 10 days at sea and hundreds of thousands of pounds in fuel and crew costs. For now, the fastest and safest method of transport remains in the air.

While there are goods that cannot be transported by air, they are few in number. Our time-critical logistics team can source transport suitable for any cargo, including large, oversized, heavy, high-value, fragile or even dangerous goods.

As it stands, the necessity for an ad-hoc charter arrangement remains. They are often used to overcome various issues, including industrial action, weather and stalled production lines.

Q: What are your predictions for the rest of the year?

A: Later this year additional customs regulations will come into play in the UK, starting with systems changes in March and the Border Target Operating Model in October. Having a logistics provider that has a deep understanding of these changes, and what they mean in practise, can save time, money and reputation.