Shippers Turning to Planes

Ports are backed up, ships are stranded at sea, and American consumers are buying.

It’s a perfect storm.

To resolve supply chain issues, manufacturers are turning to the air. Short term air cargo is a solution to prioritized must-have items and parts needed by American companies to manufacture goods, but in the long run is cost-prohibitive.

Prior to the pandemic a chartered cargo jet was running in the neighborhood of $750,000. Now it’s about $2 million. $3 million if you’re shipping from Vietnam.

Sam Houston State University Supply Chain Management Associate Professor Dr. Jason Riley says one way or another you will pay the fare. “I would believe all those costs will be passed on to consumers. We’ll see higher prices. It’ll be higher fuel prices, higher surcharges that go right to the consumer.”

Air Charter Services expects this to be the busiest peak season in history. Passenger airlines are limited in how much cargo they can transport, dependent on how many passengers they have, so Dr. Riley expects the major cargo airlines to pick up as much as they can. “Primarily we’ll see this from charter groups: Fed Ex, DHL. UPS for a while was limiting the amount that people could airship because they didn’t have enough planes. Now we’re seeing other companies going out and chartering their own planes.”

Amazon, on the other hand, is looking to buy their own planes, expanding their fleet with second-hand cargo planes.

photo: Getty Images

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