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Aviation: Exploring the Factors Fueling the Growth of Cargo Charter Demand in Africa

by Atqnews
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cargo charter

Africa is emerging as a pivotal hub for global trade, drawing attention to its strategic location and economic growth objectives.

According to logupdateafrica.com, this newfound recognition is sparking a surge in demand for air cargo services, driving the growth of cargo charter operators across the continent. Factors contributing to this upward trajectory include the need for immediate and reliable cargo transport solutions, changes in customer demands, and a rise in online shopping.

Similarly, rising demand in the air cargo industry bodes well for air cargo providers and cargo charter operators, fueling the market for the air charter services. Customers’ need for immediate and prompt delivery of their items has resulted in an increase in the number of shipments transported by air in recent years.

Demand Modified
The rising demand for cargo charter services is significantly driving the expansion of the air charter services market, while challenges such as volatility in aviation fuel cost will limit the growth of the air charter sector. Some of the world’s largest charter operators have reported strong demand for cargo charters but what are the significant customer demands?

READ: Aviation: Dedicated Air Cargo Airports Outperform Hybrid Airports Amidst Shipping Slump, DePaul University Study Reveals

“Our customers’ primary requirement when chartering an aircraft is swift and tailored solutions for cargo transport. To fulfil this need, we provide efficient booking platforms, transparent tracking systems, and a diverse range of aircraft options to cater to specific cargo needs,” says Jenny Van Wyk, Country Manager, Chapman Freeborn South Africa. The surge in air cargo volumes has a positive prospect for air cargo providers and cargo charter operators. This also leads to the renewal of long-term charter contracts.

“Customers who are in the market for chartering aircrafts do so because they need a solution that is customizable, faster and more reliable than regular air freight. After a long time of global supply chain disruptions, customer expectations are at an all-time high, meaning that we as a logistics provider need to keep pushing the envelope and improve our service to keep up with those expectations,” says Daniel Randig, Senior Vice President Air Logistics, Middle East & Africa at Kuehne+Nagel.

One of the major reasons for the increase in demand for cargo charter operators is the shipment of oversized and difficult-to-fit products in comparison to the standard logistic containers and aircraft used by air cargo operators. We asked the industry players to understand if there has been a change in demand post-pandemic.

READ: News: Aviation Body, IATA says global Air Cargo Demand Decline Slows in April by 6.6%

“The main change we have seen in the last couple of years is a widening in lanes and in the commodities shipped. Yes, the traditional northbound into Europe for perishables and the southbound with spare parts are still going strong, but we saw an increased demand for flights connecting Africa to the Middle East, to Asia and even South America. We also noticed an increase of intra-Africa demand for chartering flights,” said Randig.

“The booming African charter market has garnered international attention. Notably, there’s a trend toward personalised services and accelerated deliveries. Following the pandemic, we experienced a notable increase in demand for adaptable cargo transport solutions,” said Wyk. Key growth factors The global chartered air transport market increased at an 8.5 percent compound annual growth rate (CAGR) from $79.16 billion in 2022 to $85.9 billion in 2023. The chartered air transport market is estimated to increase at a 7.7 percent CAGR to $115.78 billion by 2027.

The demand for items is surely increasing as people become increasingly drawn to shopping online. Scenarios such as time constraints, last-minute capacity, and unexpected applications have also pushed the acceptance of air charter, thus increasing the market size of air charter services.

“The first factor is the growing population, who are willing and can afford to consume a large variety of products, from cell phones and computers to fashion items. The population growth triggers the need for more infrastructure and so telecommunication and construction equipment need to be brought into countries. This population also needs access to medical and pharmaceutical products. There is also growing footprint of manufacturing plants (eg. automotive) in Africa,” said Randig.

Africa is also a source of perishable and textile products. These commodities need fast and reliable modes of transport to access their final markets worldwide, that increases the need for charter flights.

“The projected growth of the chartered air transport market can be attributed to several key growth factors. These include the continuous increase in global trade, the urgency of time-sensitive deliveries, the accessibility of remote locations, and the heightened demand for specialised cargo transport solutions. These factors collectively propel the expansion of the chartered air transport market,” said Wyk.

Trending Technology In today’s modern world, every success and growth is linked to technology. Thus, one of the reasons for a growing charter service is also technology. Innovative additions to the charter service portals are a significant trend driving the evolution of the air charter market. Many charter businesses are working to improve their digital client experience and optimise the booking process with real-time data.

“As in every other market, technology will continue to be a driver for the chartered air transportation service market’s growth also in Africa. For example, old aircrafts are constantly being replaced by more efficient and reliable equipment, which drives down the cost per hour flown and it also brings reduction in CO2 emissions. Newer and more efficient equipment for ground services will reduce the turnaround times and reduce idle space on warehouses, trucks, and aircraft, which ultimately reduce the cost per tonne transported. The access to high-speed internet across the continent will allow the adoption of new technologies such as IoT and machine learning which will bring more transparency and access to real-time information in every step of the supply chain,” said Randig.

Chapman Freeborn tripled its workforce in Africa in February 2023 as the charter specialist prepares to celebrate its 50th anniversary, owing to a 30% year-on-year increase in cargo revenues in the region from 2021 to 2023.

“In the African cargo charter industry, we expect the incorporation of numerous cutting-edge technologies that will foster expansion. These encompass sophisticated fleet management software, digital reservation systems, IoT cargo sensors, blockchain for tracking, and aviation solutions aimed at enhancing efficiency, customer ease, cargo protection, transparency, and industry advancement,” said Wyk.

Charter market in the next 5 years The African charter market is poised for growth as industry players are looking at it as a potential market in the future. This is said because many industry players have begun investing and setting up businesses in Africa, which will become a big market in the future.

For example, Kuehne+Nagel has been serving the African market for decades and has long-term own capacity contracts in markets such as Kenya and South Africa. In addition, they have recently announced the acquisition of Morgan Cargo, a leading South African freight forwarder.

“Naturally the access to capacity at the right price and speed will continue to be the name of the game. The need for more sustainable solutions will continue to grow and that will push for a quicker change in the fleet available. There are also a few good projects on the drone and unmanned cargo systems being developed. Africa with its large number of remote areas and often without big airports, could benefit from such solutions. Safety and security are and will be top of the agenda, which will impact the need to further invest in systems and infrastructure at the airports and terminals,” said Randig.

Chapman Freeborn also has strategic plans for the cargo charter business in the African market revolving around catering to the escalating demand for customised cargo transport solutions.

“To achieve this, we intend to offer efficient and user-friendly booking platforms, ensure transparent cargo tracking capabilities, provide a wide range of aircraft options, and introduce eco-friendly solutions. These initiatives are designed to align with the growing requirements of the flourishing African market for tailored and sustainable cargo transport services,” said Wyk.

“In the next five years, the air cargo charter market is poised for a revolutionary transformation. This evolution will be driven by the seamless integration of advanced technologies, enabling real-time tracking of cargo, fostering sustainable operational practices, and delivering unparalleled customer experiences. These changes will effectively address the shifting demands of the industry, emphasising speed, flexibility, and operational efficiency in an increasingly dynamic market landscape,” said Wyk.

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Aviation: Exploring the Factors Fueling the Growth of Cargo Charter Demand in Africa

by Atqnews
0 comments
cargo charter

Africa is emerging as a pivotal hub for global trade, drawing attention to its strategic location and economic growth objectives.

According to logupdateafrica.com, this newfound recognition is sparking a surge in demand for air cargo services, driving the growth of cargo charter operators across the continent. Factors contributing to this upward trajectory include the need for immediate and reliable cargo transport solutions, changes in customer demands, and a rise in online shopping.

Similarly, rising demand in the air cargo industry bodes well for air cargo providers and cargo charter operators, fueling the market for the air charter services. Customers’ need for immediate and prompt delivery of their items has resulted in an increase in the number of shipments transported by air in recent years.

Demand Modified
The rising demand for cargo charter services is significantly driving the expansion of the air charter services market, while challenges such as volatility in aviation fuel cost will limit the growth of the air charter sector. Some of the world’s largest charter operators have reported strong demand for cargo charters but what are the significant customer demands?

READ: Aviation: Dedicated Air Cargo Airports Outperform Hybrid Airports Amidst Shipping Slump, DePaul University Study Reveals

“Our customers’ primary requirement when chartering an aircraft is swift and tailored solutions for cargo transport. To fulfil this need, we provide efficient booking platforms, transparent tracking systems, and a diverse range of aircraft options to cater to specific cargo needs,” says Jenny Van Wyk, Country Manager, Chapman Freeborn South Africa. The surge in air cargo volumes has a positive prospect for air cargo providers and cargo charter operators. This also leads to the renewal of long-term charter contracts.

“Customers who are in the market for chartering aircrafts do so because they need a solution that is customizable, faster and more reliable than regular air freight. After a long time of global supply chain disruptions, customer expectations are at an all-time high, meaning that we as a logistics provider need to keep pushing the envelope and improve our service to keep up with those expectations,” says Daniel Randig, Senior Vice President Air Logistics, Middle East & Africa at Kuehne+Nagel.

One of the major reasons for the increase in demand for cargo charter operators is the shipment of oversized and difficult-to-fit products in comparison to the standard logistic containers and aircraft used by air cargo operators. We asked the industry players to understand if there has been a change in demand post-pandemic.

READ: News: Aviation Body, IATA says global Air Cargo Demand Decline Slows in April by 6.6%

“The main change we have seen in the last couple of years is a widening in lanes and in the commodities shipped. Yes, the traditional northbound into Europe for perishables and the southbound with spare parts are still going strong, but we saw an increased demand for flights connecting Africa to the Middle East, to Asia and even South America. We also noticed an increase of intra-Africa demand for chartering flights,” said Randig.

“The booming African charter market has garnered international attention. Notably, there’s a trend toward personalised services and accelerated deliveries. Following the pandemic, we experienced a notable increase in demand for adaptable cargo transport solutions,” said Wyk. Key growth factors The global chartered air transport market increased at an 8.5 percent compound annual growth rate (CAGR) from $79.16 billion in 2022 to $85.9 billion in 2023. The chartered air transport market is estimated to increase at a 7.7 percent CAGR to $115.78 billion by 2027.

The demand for items is surely increasing as people become increasingly drawn to shopping online. Scenarios such as time constraints, last-minute capacity, and unexpected applications have also pushed the acceptance of air charter, thus increasing the market size of air charter services.

“The first factor is the growing population, who are willing and can afford to consume a large variety of products, from cell phones and computers to fashion items. The population growth triggers the need for more infrastructure and so telecommunication and construction equipment need to be brought into countries. This population also needs access to medical and pharmaceutical products. There is also growing footprint of manufacturing plants (eg. automotive) in Africa,” said Randig.

Africa is also a source of perishable and textile products. These commodities need fast and reliable modes of transport to access their final markets worldwide, that increases the need for charter flights.

“The projected growth of the chartered air transport market can be attributed to several key growth factors. These include the continuous increase in global trade, the urgency of time-sensitive deliveries, the accessibility of remote locations, and the heightened demand for specialised cargo transport solutions. These factors collectively propel the expansion of the chartered air transport market,” said Wyk.

Trending Technology In today’s modern world, every success and growth is linked to technology. Thus, one of the reasons for a growing charter service is also technology. Innovative additions to the charter service portals are a significant trend driving the evolution of the air charter market. Many charter businesses are working to improve their digital client experience and optimise the booking process with real-time data.

“As in every other market, technology will continue to be a driver for the chartered air transportation service market’s growth also in Africa. For example, old aircrafts are constantly being replaced by more efficient and reliable equipment, which drives down the cost per hour flown and it also brings reduction in CO2 emissions. Newer and more efficient equipment for ground services will reduce the turnaround times and reduce idle space on warehouses, trucks, and aircraft, which ultimately reduce the cost per tonne transported. The access to high-speed internet across the continent will allow the adoption of new technologies such as IoT and machine learning which will bring more transparency and access to real-time information in every step of the supply chain,” said Randig.

Chapman Freeborn tripled its workforce in Africa in February 2023 as the charter specialist prepares to celebrate its 50th anniversary, owing to a 30% year-on-year increase in cargo revenues in the region from 2021 to 2023.

“In the African cargo charter industry, we expect the incorporation of numerous cutting-edge technologies that will foster expansion. These encompass sophisticated fleet management software, digital reservation systems, IoT cargo sensors, blockchain for tracking, and aviation solutions aimed at enhancing efficiency, customer ease, cargo protection, transparency, and industry advancement,” said Wyk.

Charter market in the next 5 years The African charter market is poised for growth as industry players are looking at it as a potential market in the future. This is said because many industry players have begun investing and setting up businesses in Africa, which will become a big market in the future.

For example, Kuehne+Nagel has been serving the African market for decades and has long-term own capacity contracts in markets such as Kenya and South Africa. In addition, they have recently announced the acquisition of Morgan Cargo, a leading South African freight forwarder.

“Naturally the access to capacity at the right price and speed will continue to be the name of the game. The need for more sustainable solutions will continue to grow and that will push for a quicker change in the fleet available. There are also a few good projects on the drone and unmanned cargo systems being developed. Africa with its large number of remote areas and often without big airports, could benefit from such solutions. Safety and security are and will be top of the agenda, which will impact the need to further invest in systems and infrastructure at the airports and terminals,” said Randig.

Chapman Freeborn also has strategic plans for the cargo charter business in the African market revolving around catering to the escalating demand for customised cargo transport solutions.

“To achieve this, we intend to offer efficient and user-friendly booking platforms, ensure transparent cargo tracking capabilities, provide a wide range of aircraft options, and introduce eco-friendly solutions. These initiatives are designed to align with the growing requirements of the flourishing African market for tailored and sustainable cargo transport services,” said Wyk.

“In the next five years, the air cargo charter market is poised for a revolutionary transformation. This evolution will be driven by the seamless integration of advanced technologies, enabling real-time tracking of cargo, fostering sustainable operational practices, and delivering unparalleled customer experiences. These changes will effectively address the shifting demands of the industry, emphasising speed, flexibility, and operational efficiency in an increasingly dynamic market landscape,” said Wyk.

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