Understanding the Risks of Air Freight


The air freight business – or see trucking freight quote, is in a spiral due to rising fuel costs, security issues, evolving inventory strategy, mode shifting, and provider consolidation. Here’s how carriers and shippers intend to overcome these obstacles.

Here’s a deeper look at each problem and how it affects the air freight sector, as well as shippers and receivers.

1. Inexorably rising fuel prices

Increased demand from India, China, and the Third World; limited refining capacity in the Western Hemisphere (which means petroleum must be carried from considerable distances); political instability in the Middle East; and a lack of competition among fuel suppliers are all reasons driving up fuel prices.

2. Security Threats on the Horizon

The Transportation Security Administration, like shipper associations, opposes 100% cargo screening. The National Industrial Transportation League, one of the country’s oldest shipper groups, cautions that a regulatory framework meant to assure inspection of every item of cargo moved by air, presuming it could possibly be implemented, would impose a “impossible burden on air commerce.”

3. Inventory policies have been updated.

Companies are questioning the rationale of keeping low inventories as supply chain risk and the possibility for disruptions rise.

Retailers and manufacturers are now opting to carry extra emergency stock to fulfill demand and avoid having to fly in emergency cargo “Hoppin adds. “This is a watershed moment in global supply chain systems.

“Every firm was trying to squeeze as much inventory out of the supply chain as possible five years ago,” he recalls. “Companies who operate with little inventories and have supply chain issues, on the other hand, spend a lot of money on air freight. They are currently attempting to control the enormous debts.”

4. Changing modes

Companies are reconsidering their usage of air freight due to rising prices and stricter security requirements.

“Ground transportation in the United States is currently competitive with air freight up to 1,000 kilometers. Shippers are progressively streamlining supply chains to depend on less expensive ground and ocean shipments, with occasional air express shipments thrown in for good measure “Securing the Future of Air Cargo, by Mark Kadar and John Larew, is a whitepaper published by Mercer Management Consulting.