Airfreight Capacity and Competition: Strategies for Service Stability Amidst Volatility

Facing pressure from surging demand and constrained airspace, freight forwarders are reverting to Block Space Agreements (BSAs) and daily consolidation strategies. AWA CEO Graham Burford shares how the company navigates geopolitical risks and the reality of sustainability goals.

Airfreight-Capacity-and-Competition-Strategies-for-Service-Stability-Amidst-Volatility

As the global airfreight market faces mounting pressure from booming demand and constrained capacity, freight forwarders are increasingly relying on long-term strategic planning to maintain service stability. The post-pandemic surge in cargo volumes - driven in part by shifts in e-commerce and manufacturing - has intensified the competition for already limited airspace, making predictable access to transport capacity more critical than ever.

Capacity Management Strategy: BSAs and Consolidation

A key method to mitigate rate volatility and space scarcity is securing long-term allocations and signing Block Space Agreements (BSAs) with airlines.

These agreements provide forwarders with guaranteed access to cargo space on key routes, minimizing risks from last-minute market fluctuations and ensuring more consistent pricing.

Additionally, maintaining daily consolidation services on major trade lanes allows for more efficient use of space, ensuring cargo moves without delay while optimizing cost structures.

Graham Burford, CEO of AWA, stated: “AWA operates daily consoles on many key lanes, which allows for efficient consolidation of cargo and optimal use of available space.”

These measures become vital as the e-commerce boom squeezes traditional cargo out of airspace. However, AWA focuses primarily on US exports, avoiding direct entanglement with platforms like Temu or Shein.

Burford emphasized: “This makes AWA less susceptible to sudden changes in capacity and rates, enabling the company to maintain stable operations and offer competitive services to its clients.”

Navigating Geopolitical Risks

In the face of global geopolitical tensions, the focus remains resolutely on solutions and adaptability. As air transport routes suffer increasing disruptions - from trade wars to regional conflicts - the corporate attitude is not to waste time lamenting challenges beyond control.

Burford shared: “AWA navigates the complexities arising from geopolitical tensions and trade barriers by adopting a solution-based approach.”

“When clients face challenges, AWA reacts promptly to provide effective solutions, ensuring minimal disruption to their operations.”

From sanctions to route closures and load restrictions, geopolitical fluctuations can paralyze unprepared operators. But a flexible strategy based on partnerships allows for rapid re-routing.

He explained: “While geopolitical issues are beyond AWA’s control, the company remains agile and adaptable, leveraging its extensive network and partnerships to find alternative routes and methods.”

Burford added: “By focusing on flexibility and responsiveness, AWA ensures that client needs are met despite external challenges.”

Sustainability: A Cautious Approach

In an industry under increasing pressure to decarbonize, AWA has chosen to proceed with caution.

Burford acknowledged: “AWA is currently adopting a wait-and-see approach to reducing its carbon footprint and promoting sustainability within its airfreight operations.”

While many logistics providers loudly announce bold carbon neutrality goals, the reality is far more complex.

He observed: “Many carriers have rolled back aggressive targets and clients have been unwilling to accept additional fees for sustainability initiatives.”

However, Burford affirmed that AWA is not standing still: “AWA remains committed to monitoring industry trends and regulatory changes.”

“By staying informed and adaptable, AWA aims to implement effective sustainability measures when the market and client readiness align.”

Tech-Driven Visibility and Regulatory Adaptation

Efficiency and visibility are the currency of modern logistics. Burford pointed to the proactive use of technology to enhance the forwarding experience.

“AWA is leveraging technology to enhance efficiency, visibility, and customer experience in its airfreight forwarding services by focusing on providing one-click visibility.”

He emphasized: “This approach ensures that clients receive critical information before they even need to ask for it.”

“By integrating advanced tracking systems and real-time data analytics, AWA offers seamless access to shipment status, enabling clients to monitor their cargo effortlessly.”

On the policy front, recent changes such as the elimination of the de minimis rule for low-value imports have shaken the industry.

Burford presented: “We have increased client communication to ensure they are well-informed about these changes and their implications.”

He added: “By keeping our clients involved and updated, we help them navigate these short-term adjustments, such as new tariffs.”

“AWA is closely monitoring these policy shifts and adapting our strategies as needed.”

“This proactive approach ensures that we can respond swiftly to regulatory changes while supporting our clients effectively.”

Global Strategy and Future Outlook

AWA’s future lies in strategic expansion and smart collaboration.

Burford revealed: “AWA is strategically focusing on underserved lanes that are showing significant growth opportunities.”

This includes markets such as Australia, New Zealand, Hawaii, South Africa, and Europe. But expansion does not mean going it alone.

He noted: “AWA leverages long-term, key partnerships with local experts in other critical global markets.”

Regarding technology: “Collaborations with technology providers have led to the integration of advanced cargo management systems, bookings, quoting and real-time tracking.”

“AWA has dedicated resources for developing and maintaining online booking platforms with vendors and clients.”

Looking further ahead, data will be central to strategy. Burford concluded: “We are developing significant data-driven reports across various business areas.”

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