Capacity crunch: How can GSAs cope?

Capacity crunch: How can GSAs cope?

Despite an increase in passenger flights, particularly across Europe and Northern America, global capacity constraints are continuing to disrupt the cargo industry. Paired with high demand on the edge of peak season, this has created a perfect storm of challenges for GSAs, explains Vasili Sushko, vice president of sales at New York City based GSA, Transatlantic Airways.

“In terms of airfreight, the worldwide collapse in passenger demand, and with it the lack of passenger aircrafts fulfilling the worldwide flight network, is causing the demand for air cargo space to remain high, and until passenger carriers resume their pre-Covid frequencies, you likely won’t see capacity return to normal either.

“While a freighter is a hot commodity right now, the current capacity doesn’t come close to the previous network of passenger flights, which peaked at nearly 10,000 in the air on a given day before COVID began. For reference, that number is a little more than half today.”

Sushko notes that if complicated conditions and restrictions for travellers were lifted, this may encourage people to fly and in turn help ease capacity issues.

With this in mind, he expects this upcoming peak season to be a “mix of hurdles and challenges”.

“Since the global logistics chain was severely disrupted, we are currently facing severe equipment and staffing shortages as well as overflowing warehouses that are trying to keep up with the upcoming influx of freight that is coming with the first true peak season since COVID restrictions (for the most part) have been lifted.

“It’s a particularly challenging time as a GSA since we are continuing to face significant pressure from our passenger air carriers to maximise profits while being able to offer only subpar service to our freight forwarder customers due to the disrupted flight schedules, lack of equipment and manpower within many of our ground handling agents, among other issues.”

With mounting pressure, how can GSAs manage customer’s expectations? Sushko says that unfortunately the only way is lessen them.

“It’s a given today that wait times to either pick up imports or offload exports are astronomical. It’s a given that rates can change without notice. It’s a given that screening delays due to lack of manpower or too much cargo on the floor can and likely will happen, delaying shipments.

“We are forced to lower everyone’s expectations knowing that this peak season will be a difficult one. Avoiding subpar service to any customer is of course a priority, but avoiding making false promises in today’s environment is also important. You cannot guarantee something you know you can’t offer.”

Despite this, ever optimistic Transatlantic sees opportunity in every difficulty and Sushko believes this is a “key time to shine.”

“We have our offices working full force assisting both our carriers and freight forwarders to navigate what we hope are the closing stages of the pandemic. Not many industry leaders can add “Pandemic Readiness” to their resume. We hope to at least be able to learn from this process and get out of it on both feet, standing strong to tackle similar obstacles in the future, although we hope we never have to.

“By far the greatest lesson learnt is to think ahead. Years ago a simple plan would have worked, but today you need to have four or five plans. This is especially true when servicing passenger air carriers, which have been extremely critical of their respective cargo departments since they suddenly became the lead revenue makers during the pandemic. Now you need to not only plan to try to carry out maximum tonnage across all available flights, but you need to plan for overflow as well.

Sushko advices: “Make a plan for what happens when you are over capacity. Make new partners, particularly truck networks. Make sure you know what to do with cargo that can’t fit on your planes and send it to other cities or stations where it can. Lastly, build your network so that you can divert your cargo via several different routes for when capacity runs tight.”