Can Airfreight Smoothen the Supply Chain Bottlenecks
December 17th, 1903 is a milestone in human civilization. It was on this date that the Wright brothers made their first flight, marking the victory march for a mode of conveyance that is still looked upto as agile, luxurious and is a hallmark of aspirations and status symbol. Air travel is not only convenient for traveling a long distance in a short span of time, but it is also the one-stop solution in the supply chain industry for the swiftness in operations it offers.
Airfreight is the solution to go to when suppliers are walking down the tightrope. In case of urgent deliveries, or perishable objects, airfreight is the best possible option. Additionally, when the ports are facing capacity crunch or the tariffs of ocean freight and container skyrockets, it iis airfreight that comes as the savior. With the current business scenario changing at a rapid pace, the freight forwarding industry is shifting its focus towards airfreight. This article tries to gauge the issues that are working in favor of airfreight, making it the most sought after mode of shipment in the modern supply chain.
Capacity Crunch of Ocean Freight
With most of the industries taking advantage of ocean freight, it has become an extremely traditional model for transportation. Hence it has to deal with a whole lot of issues that come as subsidiaries such as issues related to overbooking, vessel omissions, congested ports, lack of containers, skyrocketing container price et al. With COVID-19 hitting the business world as the biggest disruption, the world got to witness and know the limitations of ocean freight. To avert those disruptions and the capacity crunches that have been induced by ocean freight, manufacturing industries of various kinds seem to be leaning towards air freight.
Business world swears by the dictum, ‘Time is Money’. Time is a very important factor in the business world that can either make or mar a venture. If speedy delivery of goods is not met, solutions to problems are not dealt with in an agile manner, then a business can definitely suffer setbacks. Thus in order to comply with the factor revolving around promptness, the supply chain industry relies on airfreight as it is the fastest way to ship goods.
Certain manufacturing sectors like fashion and electronics are reliant on the airfreight because of the nature of their business. Clothes and apparels are like food. They need to be served to the consumers piping hot. This industry is highly vulnerable to shifts in trends. Seasonality of fashion also induces unpredictability in this business. Therefore, for the fashion industry, airfreight is the go-to-solution to get their job of agile movement done.
On the other hand, the electronics industry deals with goods that are mostly bulky in frame and expensive. These are the types of goods that work well with a small number of touchpoints. To reduce the number of touchpoints in handling the goods within the value chain, to ensure that the goods are not getting damaged in a long shipping process and to meet the timeline of products, the electronics industry too depends massively on the airfreight industry.
Not only are these 2 industries dependent on airfreight. Items that are highly valued, fragile, perishable, and are susceptible to damage, are gradually relying more on this model to ship their consignment as fast as possible. With less time taken to transport goods, and a small number of touchpoints, the risk of the items getting exposed to disfigurement gets mitigated.
Exploring New Markets
With more companies attempting expansion of operations in different countries, trying their bits at offshoring and tapping in new markets, airfreight comes as their reliable partner. The operation model of airfreight gets in sync with the intentions of these companies. Instead of shutting down operations for weeks altogether, airfreight provides a quick solution through reduced lead time and swift movement
With the trade world in a state of flux, companies around the world are changing their strategies in operations. With airfreight addressing these supply chain troubles in its own inimitable and efficient ways, it may be befitting to say that airfreight is soon catching up with ocean freight as the most trusted medium of conveyance in the transitory business scene of the global supply chain.
Issues With Tariffs
Tariffs are levied on products that are imported from foreign countries. Not only do these charges become a source of revenue for the government, but it also helps promote domestic products in a way. While the tariffs on the goods from certain countries get high, companies shift their production bases from those parts to free themselves from the liabilities of taxes. In case of sudden increase in tariff and swift and smooth relocation of operations, airfreight becomes the most sought after solution, in comparison to the delays that can be entailed with ocean freight.
Sometimes in the wake of a revised tariff, the ports get to see a congestion with all the companies trying to book vessels before the new tariff gets implemented. With the slower movement of the ocean freight, the chances of tariffs catching up with the movement of goods creeps in. Thus to avoid higher export charges and to battle the unprecedented rush at the ports, airfreight emerges as an extremely viable solution.
In this evolving fast-paced business world, if one company wishes to outperform its competitors, then leveraging the agile solutions is the wisest solution. Be it taking recourse to technology or being backed by the fastest mode of shipment, businesses must make discreet plans to stay afloat and airfreight aligns itself well with the fast-growing international supply chain.
However it must also be pointed out that with more companies trying to take the advantages of airfreight, it may also come under the bane that ocean freight has been suffering for years. Hence, it would be judicious of the companies that they come up with strategies as to how airfreight would be used and a proper supply network of airfreight is formed with utmost accuracy. To tap in the yields that airfreight may produce and to have the resources of airfreight for strengthening the supply chain, the entire ouveure and the skillset of the industry must undergo a significant change. Only then can we experience the industries undergoing a paradigmatic shift, for their own good.