Agility amid uncertainty

Singapore freight forwarders – Star Concord

With constant change in the airfreight industry amid a string of disruptions, from the pandemic to economic shocks to geopolitical challenges, the ability to swiftly and adeptly adjust strategies has never been more crucial.

On one hand, certain global events act as catalysts for supply chain disruptions, creating a silver lining for the air cargo sector as it becomes a pivotal solution amid logistical challenges. On the other, the industry contends with adversities such as inflationary pressures, which escalate operational costs.

“The only certainty is that there will be uncertainty so we have to be agile, in culture, mindset and in our organisation, Sebastiaan Scholte, CEO of Kales Group, stated. 

“It is in human nature to extrapolate the current conditions. During, and even at the end of the COVID period, people were expecting the market conditions to last. 

“Our industry is and will always be cyclical. Like Darwin said: “It is not the strongest that will survive, but the ones who are most adaptable to change.

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Surges and slumps

In recent months, China has emerged as a focal point of activity, experiencing an upward trajectory that underscores its return in the post-pandemic era. However, this growth is not universal, as other regions grapple with challenges posed by the continuing situation in the Red Sea.

Amid these regional variations, another concern has emerged with a general shortage of labour, both quantitative and qualitative, and many airlines are reluctant to add manpower, still facing pressure to downsize. 

“It is easier for a GSSA, like Kales, with an entrepreneurial mindset to quickly upscale manpower if the operation and volumes require. More airlines are looking as well for a one stop shop, so I expect consolidations to increase,” Scholte explained.

“Overall the outlook for this year is moderately positive across all markets. Looking at the longer term, trade ex Mexico, India and South East Asia will most likely outgrow other regions, and exports from China to the USA will even decline.”

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Expansion and opportunity

A number of cargo segments, such as the e-commerce industry, have been booming recently, seeing those in the airfreight industry diversify their portfolios to meet shifting dynamics. Kales Group has been among those working with companies to capitalise on this demand, becoming the global partner for Cainiao, except for in China. 

“e-commerce is mostly one directional, so it is ideal to partner with a global GSSA, like Kales, to commercialise the idle capacity caused by the imbalances,” Scholte stated.

To aid Kales growth globally, as the market presents new opportunities, the GSSA has been embracing the advantages offered by technology, introducing automation and digital solutions to unburden themselves and add value to their business.

“The technology is there,” Scholte highlighted.” However, the adaption to use it is still relatively slow in the air cargo industry. Partly explained by the many different stakeholders in the supply chain, but also because of bureaucracies with certain countries.”

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Author: Edward Hardy