Securing and managing air capacity can no longer sit in the back office. For importers and freight forwarders, it needs to become a front-line strategic weapon, with technology as the key enabler.
Today’s air freight market presents meaningful growth opportunities for businesses of any size that want to access distant markets or deepen their established footprint abroad.
Global air cargo is therefore becoming increasingly popular, with volumes projected to grow at an annual rate of ~3% through 2030. In such a crowded scene, though, operational hurdles can be complex and challenging for logistics teams.
A major hurdle, to begin with, is procuring adequate air freight capacity to efficiently meet the needs for every shipment. Let’s take a closer look.
Key Takeaways
- Air freight capacity shifts unevenly, making planning and budgeting harder for shippers and forwarders.
- Procurement teams must align processes with business goals, build a strong partner network, and plan for disruptions.
- Modern air freight procurement strategy relies on real-time data, digital platforms, automation, and human expertise.
A Record-Breaking Landscape
The state of air cargo today is stronger than many supply chain analysts expected.
Despite expectations of a slow recovery after years of volatility, global air cargo demand continues to rise. It recently reached a new milestone of nearly 275 billion CTK (Cargo Ton-Kilometres), surpassing the previous record by roughly 0.5%.
As a result, demand for capacity is also increasing and, unavoidably, air freight procurement now requires a more sophisticated approach.
Across thousands of carriers, airports, forwarders, and intermediaries, even small inefficiencies in pricing, capacity allocation, or execution can quickly compound, turning growth into operational pressure for importers and air freight forwarders alike.
A robust operational strategy is the only way forward.
But first, let’s take a step back.
What Is Air Freight Procurement?
Air freight procurement is the process of obtaining the necessary cargo space exactly when you need it at the most competitive price. It’s an intricate process that involves a deep analysis of market fluctuations, anticipating capacity shortages, and ensuring that every shipment is smooth, compliant, and cost-effective.
Why Air Freight Procurement Matters In Logistics
Today, as global supply chains grow and connect across borders and cultures, a single disruptive event can rapidly ripple through even the most distant links.
Consider, for example, that a sudden labor strike at an arrival hub, thousands of kilometers away from your suppliers, can still destabilize your entire flow of goods.
If you are shipping via air, procurement is your shield against such risks.
For international shippers in particular, effective air freight procurement matters because:
Volatility Is Constant
Jet fuel prices fluctuate; surcharges shift rapidly; capacity reallocates constantly. Procurement teams must act strategically rather than just reactively.
Capacity Is Finite
During peak seasons or global disruptions, such as the Red Sea crisis that caused major bottlenecks along key trade routes and pushed ocean shipping times up by 30%, air procurement ensures you aren’t left on the ground.
The Stakes Are High
Many different factors can cause instabilities in air freight.
Last year alone, airlines added significantly more cargo space to the market, increasing total available capacity (or ACTK, Total Available Cargo Ton-Kilometers) by 7.4%.
However, less than half of that space was actually used, with the global cargo load factor (CLF) averaging a mere 45.9%.
The result?
Capacity returned faster than shipping demand could absorb it, leaving many aircraft flying with significant unused space. While this may sound insignificant at first, it actually makes planning harder for shippers and logistics teams, mainly because:
- Capacity is not evenly available across routes or time periods
- Prices become more volatile
- Airlines adjust schedules and pricing more frequently
So what does this mean in practice?
Availability becomes unpredictable, air freight costs are harder to control, and long-term planning requires far more coordination and flexibility than before.
To address this reality, air freight procurement must now account for these conditions, ensuring shipments reach their destinations on time and at a controlled cost, despite ongoing market instability.
Traditional vs. Modern Air Freight Procurement Approaches
Have you ever heard of ‘spreadsheet chaos’? Or dealt with annual RFPs (Request for Proposals) that rarely survived market shifts? That’s how air freight capacity was procured before tech came onto the scene.
The Traditional Way: Manual data entry, repeated negotiations via email, and a focus purely on the immediate rate.
The Modern Way: Thankfully, today things have moved toward a unified, digital infrastructure.
Modern air freight procurement platforms use real-time airline data to provide instant updates on rates and availability. They also integrate with an organization’s Transportation Management System (TMS), bringing air, trucking, and local charges into a single cost view.
Armed with this visibility, forwarders can convert complex buy rates into accurate, profitable sell rates in minutes, and offer shippers the capacity they need at the right price. Similarly, shippers benefit from faster cost visibility, more reliable capacity access, and better-informed routing decisions.
Best Practices For A Strong Air Freight Procurement Strategy
A robust air freight procurement strategy must keep pace with today’s fast-moving market. Forward-thinking companies are adopting more dynamic approaches.
1. Integrate Procurement With Business Objectives
Air freight procurement must be closely tied to the company’s overall inventory and omnichannel strategies. Setting clear goals and KPIs that align with business objectives is crucial for success.
2. Foster Strategic Carrier Relationships
As with nearly every supply chain move, building strong, long-term relationships with core carriers and third-party logistics (3PL) providers is essential. During capacity crunches, a trusted partner network can be the difference between keeping goods moving and having them sit idle at a high cost.
3. Embrace Data-Driven Decisions
Leverage data analytics to gain insights into market trends, historical price movements, and carrier performance. Real-time rate benchmarking is an importer’s guide to securing competitive, fair rates.
4. Adopt A Hybrid Sourcing Model
Combine contracted rates to cover baseline volumes with a flexible approach to the spot market. Sourcing bots can automate spot bidding, reducing risk while capturing opportunities when urgent capacity is needed.
5. Prioritize Risk Management And Contingency Planning
Keep up with global events to assess supply chain risks, be it labor strikes, geopolitical issues, or natural disasters, so that you can develop robust contingency plans before disruption strikes. Remember that relying on a single supplier or shipping lane is no longer viable.
Technology & Tools for Smarter Air Freight Procurement
Did you know that digital tools help you access live data from over 60 airlines at the same time? And that’s just one of all the things tech can do for you.
Here are some more:
- AI & Machine Learning are used to predict market shifts and automate carrier selection based on proven reliability and capacity.
- Digital booking platforms – integrated systems like Ship4wd – enable one-click booking and real-time tracking. This helps shippers make optimal routing, pricing, and capacity decisions in minutes.
- Sourcing automation, such as smart sourcing bots, is transforming air freight procurement by handling time-consuming tasks like inviting carriers, validating bid data, and generating award recommendations tailored for freight forwarders.
By trading in tedious, manual sourcing approaches and replacing them with intelligent and automated processes, businesses can find a new harmony between humans and machines that counters the air-freight challenges that are here to stay.
Alan Holland, CEO of Keelvar
Need Air Freight Capacity At Optimal Prices?
Ship4wd helps you secure the right capacity at the right price, without delays or guesswork.
Our digital freight forwarding platform brings together real-time data and carrier access, giving you thousands of routing options to get your shipment where it needs to go – on time, every time.
Move faster. Buy smarter. Secure capacity with confidence today.
FAQs
What Is The Freight Procurement Process?
The freight procurement process is a systematic cycle: first, evaluate your current needs, then invite qualified carriers to bid, analyze those bids using both cost and service metrics, award the business, and keep on monitoring performance and market changes to adjust as needed.
What’s The Difference Between Procurement And Logistics?
Procurement is the strategic function of obtaining goods and services for a company’s operations (sourcing, negotiating, buying). Logistics, on the other hand, is the management of the flow of goods once procured, ensuring they move to the customer (transportation, warehousing, inventory management, and delivery).
How To Become An Air Freight Forwarder?
In the U.S., trucking and road freight forwarders must get their license from the Federal Motor Carrier Safety Administration (FMCSA). Air freight forwarders aren’t subject to a federal license, but will need training and a membership number from the International Air Transport Association (IATA).