Challenges and opportunities of sea and air freight in 2021

Global supply chains face a variety of challenges as companies attempt to transition into a new COVID-19 environment.

Port disruptions lead to continued high freight prices

A shortage of freight containers caused by Port congestion and skeleton staffing continue to impact on cargo pricing. Typically it would have taken two to three days for a container arriving in the UK to be unloaded at the nearby warehouses and return to the port to begin the journey back to where it came from. However in recent months the average is more like two to three weeks. This has resulted in some container liners not stopping to avoid incurring the hours of delay and higher costs. Those liners which are willing to stop in the UK are charging a premium, given the limited supply.

Reduced air freight capacity due to less passenger flights mean price premiums

Many passenger carriers downsized their networks and put aircraft into long-term storage, after months of reporting dramatic drops in passenger numbers. This impacted on the available carriage of tons of goods worldwide, consumer because typically, between 45% and 50% of air freight is carried in the belly holds of passenger aircraft. Although the IATA expects traffic to rebound by 62% in 2021, it will be at a slow pace. It is expected that airlines are likely to continue converting passenger widebodies into full freighters. This is because disrupted sea freight routes means air freight continues to be at a premium.