There are things that “everyone” knows that seemingly very few people actually do know. The other week this blog brought up such a thing, namely who is flying as passengers and who is not (link). For experts in the aviation industry and academia this was an issue that probably is well known, but perhaps not by many more than those experts. Today, we are bringing up a similar topic – the transport of goods via air around the world, i.e. air cargo. As much as it may be argued that “everyone” knows also about this topic, air cargo is probably not something that many has a good knowledge about. Even those who work outside of air cargo in the aviation industry often do not know much about it. So, here is a small overview of this crucially but less famous part of the aviation industry.
Airlines and traffic with passengers get most of the attention in the aviation industry, but the pandemic has showed how important the cargo part of the industry is. Still, it is not easy to find numbers that demonstrate this importance, at least not in comparison to passenger traffic. This is partly because a lot of cargo travels in the belly hold of passenger aircraft. A study from Cranfield stated that in 2013 half of worldwide cargo was transported in cargo aircraft and the other half in belly holds (link). This number has been stable for some time and while it has been expected that belly hold will increase, a 2018 forecast predicts that this will not happen untol 2037 (link).
As per IATA, the airlines represented by the industry organisation transport more than 50 million tons of goods annually. This is just one percent of world trade by volume, but more than a third of the total value. According to a study by the World Bank (link) the price of air cargo is about four to five times that of road transport and 12 to 16 times that of maritime transport. This is why air cargo is only competitive if what is shipped is of high value per unit and time for the transport is an important factor. This means that documents, medicine and medical equipment, perishable produce and seafood, expensive electronics and clothing, emergency spare parts, and inputs to just-in-time production are examples of items which are suitable for being transported as air cargo. The advantage of speed of delivery can be offset against the disadvantage of a higher cost for these types of items.
The COVID pandemic provided an unexpected and large boost for air cargo, with many cargo operators making sizeable profits and many airlines depending on it for survival. This resulted in increased orders for freighter aircraft as well as an increase in conversions of aircraft into freighters. However, the histrory of air cargo is one of dramatic cyclical shift in fortunes, depending on the development of the world economy. What seems safe to say is that, as per a forecast by Boeing (link), the share of air cargo linked to Asian economies will continue to grow for many years ahead (from just above 50% in 2017 to 60% over the next 20 years). A report from just a few weeks ago from IATA (link) stated that cargo volumes increased in August 2021 compared with August 2019, i.e. even when compared with pre-COVID levels. Air cargo demand was 7.7% higher in August this year, again comapred to August 2019 and at the same time capacity was down with 12% in the same comparison, setting up a favourable situation for pricing for cargo operators. The cargo load factor was 54%, which is 10 percentage points higher than in August 2019. Overall, the market situations continues to look good for air cargo and there are some who predict that the increased focus on cargo operations represents a “structural shift” in the industry (link).
From a pilot perspective, transporting passengers has always had a higher status than transporting air cargo. Perhaps because of traditions, pay and other reasons, but also because older aircraft are normally used for cargo operations. With the pandemic and relentless competition and cost pressure among passenger airlines, the difference in status may however gradually be shrinking. Large cargo operators, such as FedEX and UPS, offer competitive career opportunities for pilots. It may be that the old myths about differences between airline pilots and “freight dogs” (link to characterstics of “freight dogs here – link) will surely live on, but during the pandemic many pilots shifted from to air cargo operators and some seem to have found that there are advantages to this type of operation.
This was just a few pieces of information about air cargo and freighter operations, but hopefully we can return to this topic to further explore it. If there are any cargo pilots out there who can provide some guidance and information, or even write a guest post, about air cargo operations that would be warmly welcomed.