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COVID-19

Pandemic is accelerating automation of global air logistics industry

In 2019, air cargo performance was impacted by slowing GDP growth in manufacturing economies and trade tensions that dampened global trade. Softer business and consumer confidence, along with falling export orders, also contributed to air freight struggles. IATA described 2019 as the worst year for the air cargo business since the Global Financial Crisis in 2009. While trade tensions eased somewhat at the beginning of 2020, the Covid-19 outbreak in January has since added more pressure and has severely disrupted global supply chains.

Despite a challenging market environment, all divisions under The Deutsche Post DHL Group, including DHL Global Forwarding has recorded positive growth in the first quarter of 2020, with the Group’s broad geographic footprint and portfolio of logistics solutions.

There is no doubt that aviation has been one of the worst affected industries. Naturally, airports are also significantly impacted, as they have to bear fixed operating costs despite a drop in passenger numbers.

The fall in passenger traffic has grounded many aircrafts, and thus severely impacts belly capacity. This is posing a challenge to air cargo operators who have to grapple to service demand with limited capacity. On the ground, new logistics arrangements, a result of the need for social distancing, safety and hygiene protocols, are also impacting how operations are carried out, such as trucking and ground handling.

However, air cargo remains at the frontlines of the fight against Covid-19, delivering lifesaving relief materials and medical equipment to the countries that need them. With the gradual resumption of passenger travel, it would be imperative for governments to simplify customs declaration processes and ease off restrictions to aid the recovery of the aviation sector.

The Covid-19 crisis is creating a challenging situation regarding staffing, especially in cities under lockdown, closing workplaces, or where strict social distancing measures apply. As digitalisation is a core focus in the company, DHL Global Forwarding is ready to manage these challenges including allowing most of our workforce to be working remotely from home.

Employees are able to access and utilise the systems and remote working tools DHL Global Forwarding have in place to keep in touch with our customers to manage their shipping needs.

The logistics sector is being disrupted by technologies such as robotics, automated systems, drones, Big Data and AI. Digitisation has the potential to improve operations for shippers and freight forwarders; even more during unpredictable times such as the ongoing Covid-19 pandemic, which is going to accelerate digital disruption of the industry.

It is against this unpredictable and challenging climate that DHL Global Forwarding is more convinced that the Group’s Strategy 2025 to focus on globalisation, e-commerce, digitalisation and sustainability is the right one. DHL Global Forwarding is convinced that digitalisation bears the potential to ease improve the daily business of shippers and freight forwarders simultaneously.

Moustafa Elbanhawi, CEO, DHL Global Forwarding, Arabian Cluster
Moustafa Elbanhawi, CEO, DHL Global Forwarding, Arabian Cluster

 


Key takeaways

  • IATA described 2019 as the worst year for the air cargo business since the Global Financial Crisis in 2009.
  • The fall in passenger traffic has grounded aircrafts, and thus severely impacts belly capacity.
  • Air cargo remains at the frontlines of the fight against Covid-19, delivering lifesaving relief materials.
  • With gradual resumption of passenger travel, it would be imperative for governments to simplify customs declaration processes.
  • Digitisation has the potential to improve operations for shippers and freight forwarders.
  • Ongoing Covid-19 pandemic is going to accelerate digital disruption of the industry.
  • Digitalisation bears the potential to improve daily business of shippers and freight forwarders.

By Moustafa Elbanhawi, CEO, DHL Global Forwarding, Arabian Cluster.

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