How Digitalization Helped Air Freight During Red Sea Shipping Crisis
The article discusses the disruptions caused by missile attacks on ships in the Red Sea, primarily by Houthi rebels, which has heavily impacted the international supply chain. This crisis has diverted a significant portion of maritime traffic, affecting global trade routes traditionally passing through the Red Sea to the Suez Canal.
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Rise in Air Cargo Demand
Latest update on 23 May, 2024 by Aurora Park– Marketing Analyst at FreightAmigo
In response to these diversions, there has been an observable shift from sea freight to air freight, particularly as maritime capacities become constrained and rates surge. Air cargo rates from South Asia to North America and Europe have seen substantial increases due to this shift.
Digitalization’s Role: Airlines that had previously invested in digital solutions for their air cargo operations were better positioned to handle the surge in demand. Digital platforms like Freightamigo allowed these airlines to maintain efficient operations by providing real-time rates and capacity visibility. In contrast, carriers lacking digital visibility experienced significant disruptions, evidenced by a sharp decrease in eBookings.
Economic Impact and Alternatives: The diversions and the resultant reliance on air freight are inflating costs, as air transport is considerably more expensive than maritime routes. Some stakeholders are considering multimodal transport solutions that combine sea and air freight to mitigate costs and maintain supply chain efficiency.
Future Considerations: The need for ongoing digitalization across all aspects of air cargo operations to ensure resilience and efficiency. It also highlights the potential for increased use of air freight as the situation persists, with an expected rise in demand during the summer as more bellyhold capacity becomes available.
The situation in the Red Sea has underscored the importance of flexibility and digital readiness in the logistics sector, particularly in air freight. Companies with advanced digital platforms were able to adapt more quickly and efficiently, pointing to digitalization as a crucial element for future resilience in the logistics industry. Check out more on Freightamigo see how we use technology to handle your parcel smoothly through different situation.
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Read more:
Logistics News | Red Sea Crisis Disrupts Supply Chains | FreightAmigo
Logistics News | Continued Uncertainty in Red Sea Route | FreightAmigo
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