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Shipping Lines Move into Air Freight

According to Glyn Hughes, TIACA director general, shipping lines are paying air freight “a wonderful compliment” by moving into their space.

Maersk and CMA CGM have transformed their business from being box carriers to end-to-end logistics players. This swift strategy now means they are integrators, having set up their own airlines, acquired freighters and purchased forwarders. The result of this diversification? They are now serious players in air freight.

Maersk and CMA CGM have diversified into air freight. Is this a challenge or a compliment?

In a recent podcast, Glyn Hughes labelled this move into the air freight market as “a fascinating evolution. Some people say ‘should we feel threatened by this?’ and I’m thinking ‘threatened?’ – surely this is a compliment.”

“These major maritime operators, which handle around 70% of global trade by volume and a significant chunk by value as well, saying, ‘we’re exposed, we’re light in air cargo’. Surely that’s them saying the future needs to be much more balanced-based (in terms of transport modes). And certainly, air cargo is an integral part of the global economic supply chain scenario.”

“Ocean carriers have brought a different approach to the airfreight industry which challenges the existing players. They look at the relationship with the shipper differently.”

Glyn Hughes, TIACA director general

“In the maritime sector there’s a smaller number of mega-customers that own a significant chunk of what’s moving. Air cargo tends to be much more proliferated in terms of the customer base, and I’m not sure you can be successful in trying to deal with every single customer in a direct fashion.”

“I think the role of the freight forwarder is incredibly important and will continue to be so. The notion of consolidation is critical when it comes to things like e-commerce. To move tens of millions of shipments of small individual items a day is going to be hugely complex and costly. So there needs to be much more focus on consolidated e-commerce and breaking down e-commerce at destination.”

Mr Hughes was optimistic about the remainder of 2022:

“Talking with many people from the airline side, and some from the regulatory side, there is the feeling that the summer period is as bad as it’s going to get, because ground staff that are coming back have not yet gone through the full certification and training programmes, etc.”

“And so, by the time autumn comes, they think they will be in a much more balanced situation, and the same for flight crews. And then, obviously, they’ll be in a better position for 2023.”

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