Air Cargo Capacity Challenges: Context, Costs, and Solutions

Capacity issues in the air cargo industry are top-of-mind as global supply chains face mounting strains. Tariff threats, the holiday season, and increased e-commerce demand are intensifying the pressure. Here’s a look at the key challenges facing air freight, and what shippers can do to mitigate their impact. (10 minute read.)

1. Capacity Constraints and the “Preighter” Solution

Air cargo capacity dropped during the pandemic, as passenger flights (which traditionally carry a substantial share of cargo) decreased. To address this, some airlines converted passenger aircraft into “preighters” dedicated to cargo. While this helped, it hasn’t met soaring demand. According to IATA, these adjustments have led to higher costs for shippers, impacting prices across the board. (Air Cargo News / Caasint).

In North America, demand surged during the pandemic, particularly for e-commerce and medical supplies. Airports like Memphis (FedEx’s hub) and Louisville (UPS Worldport) have been expanding, but these projects take years. Meanwhile, North American carriers have relied on chartered flights to add temporary capacity. Cargo Airports & Airline Services discusses how hubs are using tech solutions to manage capacity challenges.

2. Rising Costs and Operational Challenges

Increased demand, fuel prices, and labor shortages have spiked air cargo costs. European hubs, like Schiphol and Liege, have expanded freighter capacity to help manage peaks, while U.S. carriers contend with labor shortages affecting everything from cargo unloading to ramp handling. 

Rising labor demand, documented by the U.S. Bureau of Labor Statistics, has created bottlenecks in handling operations at major hubs like the FedEx superhub in Memphis, where automation is being used to address staffing gaps.

European airports have also adopted “load balancing,” coordinating with handlers to prevent bottlenecks during high-traffic periods (Cargo Airports & Airline Services). The U.S., meanwhile, is investing in airport infrastructure to address these issues in the long term, though high costs and labor constraints continue to impact shipping rates.

3. Digitization: Pros and Cybersecurity Concerns

The digital transformation of airfreight is gathering pace, with platforms enabling real-time data sharing to optimize the flow of goods. Fraport, for example, has developed a data exchange system to streamline imports, and Memphis International uses artificial intelligence to track cargo and manage resources efficiently.

However, increased connectivity poses cyber risks. CISA has highlighted the growing vulnerability of logistics and transportation systems to cyber threats, making cybersecurity a priority for maintaining operational resilience.

4. Building Future Resilience in Air Cargo

The industry has adapted by combining cargo aircraft and freighters while expanding the infrastructure of major hubs. Long-term solutions involve investment in infrastructure, regulatory adjustments, and sustainability initiatives.

For instance, the FAA funds air cargo modernization at high-traffic airports, while Toronto Pearson in Canada is expanding to support increased e-commerce volumes. (Air Cargo World).

Shippers are not entirely dependent on long-term solutions and can proactively manage capacity problems by taking the following steps:

Taking these steps can help shippers reduce the impact of air cargo capacity issues and strengthen their logistics strategies. Close coordination with forwarders and a proactive approach will be essential for navigating these ongoing challenges.