That Sinking Feeling: Keeping shippers from running back to seafreight

  • Lewis King
  • July 6, 2017
  • 0

With any broken relationship – whether it’s a romantic tryst or a freight consignment – there’s always the danger of the “rebound effect.”

“Unrewarding rebound relationships can actually lead people to feel more attached to their ex-partners, rather than less,” warned Samantha Joel, assistant professor at the University of Utah Psychology Department. With time, she explained in a Psychology Today article, we tend to focus on the good times, while unpleasant memories fade. That’s why such relationships have such a high failure rate.

But, spurned lovers aside, Joel’s observation could just as easily serve as a warning to airfreight companies, which welcomed shippers with open arms last year after a particularly nasty break up with the maritime freight business. Shippers might not be reconciling with Hanjin any time soon, but the modal shift (or swing) under way for air cargo isn’t “happily ever after” quite yet. As any marriage counselors worth their salt will stress, relationships require hard work.

With each subsequent month of growth, airfreight bosses are growing increasingly complacent. Volumes have risen to the point where they are finally pushing up yields, forcing some carriers to require block space agreements (BSAs) to guarantee delivery. But, at a recent conference in Munich, Hactl CEO Mark Whitehead warned that, “shifts in the market can be quite violent, and quite sudden.” In an industry that moves as fast as airfreight, complacency is the kiss of death.

The last time the market shifted like this was back in 2007, during the global economic crisis, and the industry took almost a decade to recover. The downturn spurred a period of soul-searching in the industry, and that vulnerability to alternate modes of transportation incentivized a rush to embrace high-value products, like pharmaceuticals, and growing services, such as e-commerce. These developments represent a massive step forward, but beyond that, where can airfreight look next to ensure that shippers stick around?

One thing is for sure: The law of diminishing returns is at play here, and simply throwing more money at the problem will only make air cargo a more expensive proposition. Whatever investments in technology carriers and forwarders make, they must be made with the customer in mind.

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