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Shippers need accurate freight capacity forecasts: forwarders

SHIPPERS must become more accurate with their forecasting air freight capacity, says Flexport's head of air freight, Neel Jones Shah, who urged shippers: 'You need to plan ahead for 2021

29 October 2020 - 19:00

SHIPPERS must become more accurate with their forecasting air freight capacity, says Flexport's head of air freight, Neel Jones Shah, who urged shippers: 'You need to plan ahead for 2021.'

He added: 'Forecasting tools have never been more critical. You don't have the luxury of air cargo capacity sitting on the side lines, you have to get it right. And you need to ask your forwarder if it has the right mix of capacity available for you.'



He also warned: 'You need to increase your supply chain budget. Rates will elevate, costs will be higher. And you need to be open to creativity, which has never been more critical. It's time to challenge the status quo.'



Forwarders have long called for shippers to create more accurate air freight forecasts, noting the potentially high cost of spot rates and emergency shipments. But inaccurate volume and schedule forecasts next year will accentuate the problems.



This year air freight has about 30 per cent less capacity - 6.5 million tonnes-worth were removed from the global fleet between April and July, as Covid-19 created a 'seismic impact' on capacity, while there is a 70 per cent projected decline in passenger numbers.



Add potential vaccines, and air cargo space is expected to fall short next year, reports London's Loadstar.



Now that cargo is accounting for about 26 per cent of airline revenues, up from 12 per cent, it does have a louder voice in the boardroom, and airlines are studying the possibility of getting more freighters; but it is a slow process. Combined with demand from increased e-commerce and Covid-related shipments, capacity is expected to be in short supply for some time.


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