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What is the biggest threat to air cargo?

Here is the second of three questions CargoForwarder Global put to ChatGPT this week (see also “What would a world without air cargo look like?” and “Is the future of air cargo electric?”). Given that it is fed with data until SEP21, in other words pre-Russian invasion, the answers are perhaps more generic than they might have been were it up-to-date. That said, the time period includes pandemic knowledge, yet does not mention pandemic as a risk until you push it for more information.

Do you agree with ChatGPT? Or has it failed to consider certain points? Image: Canva/CFG

Do you agree with ChatGPT? Or has it failed to consider certain points? Image: Canva/CFG

Here is ChatGPT’s answer to the prompt: “What is the biggest threat to air cargo?”

Several factors can be considered as potential threats to the air cargo industry. Here are some of the significant challenges that the industry faces:

Economic downturns: Economic recessions or downturns can significantly impact global trade and consumer demand, leading to a decrease in air cargo volumes. Reduced business activity and consumer spending can result in lower demand for goods, which directly affects the need for air cargo transportation.

Tensions and threats

Global trade tensions and protectionism: Increasing trade tensions, trade wars, and the implementation of protectionist measures by countries can disrupt supply chains and affect international trade flows. Tariffs, trade barriers, and geopolitical disputes can lead to decreased trade volumes and uncertainty, impacting the demand for air cargo services.

Security threats: The air cargo industry faces ongoing security concerns related to the transportation of goods. Risks include terrorism, smuggling of illegal substances, and theft. Implementing stringent security measures and ensuring compliance with international regulations is essential to mitigate these threats and maintain the integrity of air cargo operations.

Volatility and sustainability

Volatility in fuel prices: The cost of aviation fuel is a significant expense for air cargo carriers. Fluctuations in fuel prices can impact profitability and operational costs for the industry. Sharp increases in fuel prices can lead to higher transportation costs, potentially reducing demand for air cargo services or causing carriers to pass on the increased costs to customers.

Environmental sustainability: The aviation industry, including air cargo, faces growing pressure to reduce its environmental impact and carbon emissions. The carbon footprint of air cargo operations and the reliance on fossil fuels for aircraft create sustainability challenges. Regulatory changes, such as emissions trading schemes and environmental regulations, may impact the industry’s operations and require investments in more fuel-efficient aircraft and sustainable practices.

Technology and infrastructure

Technological disruptions: Rapid advancements in technology, such as 3D printing and digital supply chain solutions, have the potential to disrupt traditional manufacturing and logistics models. These advancements could potentially reduce the need for certain types of air cargo transportation if goods can be produced locally or delivered through alternative means.

Infrastructure limitations: Inadequate airport infrastructure, limited cargo handling capabilities, and congestion at airports can hamper the efficiency of air cargo operations. Insufficient infrastructure can result in delays, increased costs, and reduced capacity for cargo transportation.

It’s important to note that the air cargo industry is dynamic and resilient, and stakeholders continually work to address these challenges through innovation, collaboration, and adaptation to changing market conditions.

ChatGPT’s more indepth interview

Interesting that it mentions 3D printing which still appears to be very much a future threat, but one that I have long considered. On the other hand, it also does not explicitly mention the term near-shoring, which could be a more imminent threat.

When probed for more information on the war in Ukraine, it reminds you that its last knowledge update was in SEP21. Nevertheless, it points to four key impact areas on air cargo (in more detail than outlined here): Disruption of air transport infrastructure, increased operational risks to air cargo leading to delays or suspension of services, trade disruptions, and geopolitical factors hampering air cargo flows both within Ukraine but also in the broader region.

Regarding the pandemic, it confirms that this “had a significant impact on the air cargo industry, both positive and negative, presenting both challenges and opportunities,” and detailed six key areas illustrating both sides. It underlined the resilience of the air cargo industry with words that could have been uttered by TIACA’s Glyn Hughes or IATA’s Willy Walsh: “Despite the challenges, the pandemic showcased the resilience and adaptability of the air cargo industry. The industry responded quickly to changing demands, utilized technology for efficient operations, and demonstrated its critical role in supporting global supply chains during a crisis,” and concluded: “It’s worth noting that the impact of the pandemic on air cargo has evolved over time and varies in different regions. The industry continues to navigate the challenges presented by the pandemic while exploring opportunities for growth and improvement.”

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