HOW GLOBAL SUPPLY CHAINS IN AIR CARGO INDUSTRY AFFECT POST COVID
Matthieu PETOT, CEO of CargoAi
1. How is the ongoing Covid pandemic affecting supply chains in Asia? Obviously, China is pursuing the zero-Covid strategy and this is being partially blamed for the major shipping congestion. How is it affecting other modes?
The pandemic continues to have a significant impact on supply chains with lockdowns effected by the Hong Kong and Shanghai regions, which resulted in much fewer aircraft in the air, and consequently, decreased capacity in the first part of 2022.
However, it appears capacity is trending upwards according to the available options provided by our airline partners on CargoAi’s marketplace platform. We can see scheduled capacity up to 2 weeks in advance, and over the last month or so, we can see things beginning to normalize. In broad strokes, this is a positive turn, and the industry as a whole can move forward to more available options for freight forwarders.
2. Where are the hot spots in Asian supply chains, where is the business being generated, where are new opportunities arising, and where are you seeing declines in trade? What is it that’s generating the high and low points?
From where we are based (Singapore), we can see that on the whole, Southeast-Asia, in line with individual governments’ covid strategies, is seeing a slower revival than Europe or North America at present. As trade is still below pre-pandemic levels, there is no discernible large trend or shift, other than air cargo capacity picking up.
Vietnam, Philippines and Indonesia should become large producers and hotspots in the trade comeback, however their rebounds are still influenced by how fast their industries can recover. Easing the processes and supply chain in those countries has a significant impact on how effective production can be there.
3. Looking forward, are you expecting any substantive changes to the overall way Asia’s supply chains operate - either resulting from the pandemic or as a result of other factors, for instance geopolitical instability in the world?
Two long years of the pandemic’s volatility has changed the thinking in supply chain leaders to adopt a stronger “rainy day” focus on their business decisions. Recent global events and their knock-on effects have demonstrated that unpredictability needs to be factored in a lot more. We are noticing a switch from “just in time” to “just in case” with more stock to cover for the unexpected.