Check Call: Shipping on a jet plane

As more shippers consider moving freight via air, it made me start to wonder what exactly shipping cargo via air entails? Good thing FreightWaves has an air cargo editor extraordinaire on staff who can teach me.

When it comes to the type of cargo shipped via air, the sky is literally the limit. Traditionally auto parts, flowers, time-sensitive deliveries and other high-value items travel via air cargo. At the beginning of the pandemic, most of the space was reserved for personal protective equipment and pharmaceuticals.

Animals for the Olympics, heavy cargo and most recently e-commerce have started heavily utilizing the skies for getting goods imported to the U.S. As the truckload congestion continues to plague the roads, companies are forced to move to the skies. 

The only thing is that as more shippers are using the friendly skies, wait times for expedited freight are adding up. A typical move from Asia to the U.S. used to be four or five days, but now it’s averaging a week or two. In some domestic situations, expedited truckload freight can be faster than shipping via air.

The decrease in international air travel has resulted in approximately 70% of all air cargo being forced onto air freighters. Passenger air travel, which would usually carry 50% air cargo and 50% passenger belongings, hasn’t fully recovered since the pandemic, leaving much of the burden of moving air cargo on the freighters.

Normally cost is a major deterrent for those thinking about air services, but now that ocean rates have skyrocketed and West Coast port congestion is what it is, the time saved and the offset of the costs for air aren’t that bad.

Quick Hits

Not even an international conflict can stop Everest Transportation from thriving. Everest is an Illinois-based truckload brokerage that launched operations in Ukraine more than five years ago. The company has relocated most of its 155 Ukrainian employees to the western part of the country, which is not as affected by the fighting between Russian and Ukrainian forces, or to other countries altogether.

The office in Kyiv is still open. However, there are no workers physically in that office. The Kyiv office handled a majority of the back-office operations, such as carrier scheduling and booking, to support the U.S. network. The employees are continuing to do business as usual, provided they can maintain internet connections — further proof that you can never underestimate the creativity and dedication of a logistics professional.

About those rates — yeah, they aren’t going down anytime soon. Like gas prices that suddenly wanted a 4.0 GPA, truck maintenance costs are following suit. Truck maintenance costs are up 10% over a year ago. The biggest factors of this increase are higher wages for service technicians and the aging of equipment. Due to equipment being unavailable for immediate repairs, carriers have had to prolong standard maintenance until parts are more widely available. 

Powertrain, exhaust systems and brakes top the list for the largest spend in repairs. Brakes have inched their way up the list as a result of the additional miles driven as fleets are keeping trucks on the road beyond the traditional four-to-five-year trade-in cycles. Higher labor costs are still the No. 1 driver behind any category of increased repairs.

Until the supply chain shortage of parts begins to level out, new truck orders catch up and things start to level out, we will continue to see an increase in maintenance costs that will force carriers to keep rates higher than they were before.

Market Check

The Outbound Tender Reject Index is really learning the art of self-care: not being spread too thin, spiking rejection levels up to insane heights, just kinda hanging out and enjoying the spring weather that is coming to most of the country. The index is sitting at 18.46%, meaning rates are still inflated, but not as bad as they were at the beginning of January. 

Any other year I would say this is a result of the typical lull in shipping that happens in January and February, but that was in the before times, when congestion wasn’t a term we heard every hour. It’s encouraging that the flow of trucks has leveled off a little, indicating that the load balance is evening out, not how long it will stay under 20%. We’ll just have to see about that. 

Who’s with Whom

Sourcemap has raised $10 million to grow its track and traceability solution, as well as to support expansions into Europe. Sourcemap is helping companies transition away from suppliers in high-risk regions. Not only that, industries like electronics, automobiles and solar panels that are embracing clean manufacturing practices can leverage the platform to find more sustainable suppliers. The series A funding was led by Energize Ventures, an investment management firm focused on digital transformation in energy and sustainability. 

Kiwibot, the robotic sidewalk delivery robot company, has chased its dreams and has a new U.S. headquarters and a contract from Sodexo. It has also closed a new round of funding. The headquarters will be in Miami; Kiwibot is currently based in Colombia. In a pre-series A round of funding, it has raised $7.5 million, bringing total funding to $14 million. One of the major investors, Sodexo, wants to utilize these bots on college campuses for food delivery services. 

The more you know

Open letter to supply chain leaders: Ukraine needs humanitarian relief

Russia sanctions cut both ways for air cargo

Soldiers win battles, logistics wins wars

The second Cold War is here — and supply chains will be the front lines