“Craziest Half Year in Air Cargo”
It goes without saying that the first half of 2020 was an interesting time. It’s hard to make a blanket statement about what happened because different places around the world were affected so differently. Perhaps only one word properly conveys the universal effects of the pandemic: crazy. No matter where you are from, January – June was a chaotic period of time. WorldACD has dubbed it “The craziest half year in air cargo.”
By the second quarter, passenger flight cancelations and travel restrictions had wreaked havoc on the international supply chain, particularly for air freight. Volumes contracted because so much air freight is dependent on the belly capacity of passenger flights. Ultimately, air freight volumes in the first half of 2020 declined by about 20%.
But, despite this hefty contraction, revenue for the air cargo industry actually increased by about 20%. If you’re thinking to yourself that the math doesn’t add up, you aren’t alone. This jump in revenue seems counter-intuitive when you consider the harsh dip in volumes.
So, how did revenues increase while volumes decreased? The dip in air freight volumes was offset by a pricing increase of nearly 50%! This offset was enough to parry the strike of COVID-19 to the global supply chain. But, only time will tell what the long-term repercussions of this chaotic six-month period are.
As we propel into the second half of 2020, one can only guess what the future holds. Stay tuned for more market updates and predictions for the second half of the year.