The decision to create a third runway at Heathrow airport was a landslide, and pleased numerous freight forwarding practitioners, mainly air freight operators and carriers. The decision, all be it years down the line, could relieve pressure from the already crammed storage facilities at Heathrow, but does this solve the overall capacity issues the rest of the UK are feeling? Due to the economic and employment benefits of the expansion, I must admit, I have been in favour of it, and will be interested to see the overall results that it brings.
However, the belief behind the expansion doesn’t mean that I am not naive to the fact that it only solves a small fragment of the capacity issues that many of us are currently facing. Whilst the expansion, in my eyes at least, is a step in the right direction, it would be remiss not to look at the other issues affecting capacity and see if there are any solutions to these problems.
The Rise of E-commerce
The obvious issue we need to tackle first is the rapidly changing landscape of online shopping that has engulfed our lives. Both B2B and B2C has seen customers’ own sales channels pressure them to replenish their inventories and distribution faster. Due to this volume increase carriers are unable to meet the transit times and pricing requirements that were agreed upon in contracts with clients. The solution? Right now, there isn’t one due to the consumerist popularity of e-commerce. A way to cut down on over-storage is for an open line of communications between the e-commerce sites and advising them about the organisational benefits of continually monitoring software design, hardware specification, and bandwidth to increase visibility across their supply chain.
Unfortunately, whilst communications may help organise our airports better, due to the increase in the distribution method, air freight rates will continue to grow in the next 12 months. There is nothing that expanding a runway will immediately do about this. However, there are several measures you can take to try and reduce the rate. Understanding any additional fees, aiming for long-term value, pre-planning, even deferring your shipment can help reduce your air freight rates.
Much has been said throughout the industry about disruption. Both negative and positive. In terms of capacity, it really must be negative. E-commerce has disrupted the supply chain, and logically it is always going to take freight forwarders some time to adapt. This has a knock-on effect on all aspects of the supply chain. However, only time will be able to fix the digital disruption. All we can is wait for the industry to completely catch up and proactively act on reducing cargo volumes through innovative techniques.
Rate of Change
Speaking of disruption, the rate of change throughout the industry has affected cargo volumes incredibly over the past two decades. This isn’t going to slow down because we are running out of room to store products, or because we cannot cope with the amount of cargo coming through air freight. Necessity is the mother of invention, and right now this is true of the industry and innovative ways to deal with the problem must be thought of before we reach crisis point. Using more ports and utilising collaborations throughout the UK could be a way to cope better with changes. There is strength in numbers, after all. Will the third runway provide the fixes air freight so desperately needs? Well, I guess not, but it’s a start.
Matt Dailly | Editor | FORWARDER Magazine