Nov 27, 2020

Air Cargo Demand Surges in Face of Passenger Downturn

Procurement
Supply Chain
Logistics
air cargo
Sam Jermy
3 min
During the COVID-19 pandemic, air cargo transportation has been adopted to avoid the delays along global supply chain networks experienced by traditional freight means.
At the height of the pandemic, air cargo transportation firms have seen a huge surge in demand, to assist struggling global supply chain networks...

Airlines which have the required facilities and certifications have been enjoying a huge surge in demand for air cargo transportation, despite the Covid-19 related passenger downturn this year, it has been revealed.

Not all passenger aircraft carriers are able to take advantage of this opportunity to capture increased air cargo volume, but those who do are getting much-needed trade in what is turning out to be one of the most difficult periods of economic strife in living memory.

One such company is Virgin Atlantic’s cargo division. Dominic Kennedy, Managing Director at Virgin Atlantic Cargo, said: “Since the start of the Covid-19 pandemic, Virgin Atlantic Cargo has played a vital role keeping global supply chains running and transporting essential goods around the world. We are continually innovating, bringing in new destinations in line with the demand to expand our cargo only offering.”

Although the UK government restrictions on travel may mean that passenger flying has decreased this month, Virgin Atlantic’s cargo business continues to go from strength to strength. The airline is set to fly over 800 sectors in November – nearly 60 per cent are cargo only. This represents a 14 per cent increase in cargo-only flying month on month, highlighting the airline’s quick reaction to a rapidly changing external environment. Virgin Atlantic Cargo’s charter service continues to be in demand from customers worldwide. Since the airline operated its first cargo-only service in March, it has gone on to fly over 330 cargo only charters.

Perhaps unsurprisingly, the industry-leading Middle East airlines are among the frontrunners looking to provide cold chain pharmaceutical logistics in the effort to supply the world with the Covid-19 vaccine. Distribution of the vaccines in the region will be a joint effort between a recently formed group of transport entities, called the Hope Consortium. The vaccines will be stored in Abu Dhabi Ports Company facilities, and then delivered by Etihad Cargo, the first Middle Eastern carrier to gain IATA’s Centre of Excellence for Independent Validators (CEIV) certification for pharmaceutical logistics.

Tony Douglas, Group Chief Executive Officer, Etihad Aviation Group, said: “With two-thirds of the world’s human footprint within a four-hour flight of Abu Dhabi, the UAE capital’s investment in technological expertise and world-class infrastructure facilities means we can serve as a global logistical hub too, and for, the world.

“We are already managing all anticipated shipment elements through our dedicated COVID-19 vaccines workforce,” Douglas added. “A dedicated pharmaceutical handling facility to accommodate increased capacity at our Abu Dhabi hub is also currently under review, as well as additional thermal covers and enhanced capabilities at origin stations based on established pharma trade lanes and specific requests.”

The British International Freight Association (BIFA) meanwhile reported that although worldwide volumes by more than 18 per cent in the first half of the year, the average price rose by 48 per cent. Perhaps most surprising is the fact that alongside the massive disruptions in air freight capacity and demand, including dramatic drops in volumes, air freight revenues actually increased by around 20 per cent in the first half of 2020.

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Jun 10, 2021

Will Public Procurement Budgets Increase in 2021?

supplychain
Procurement
budgets
strategies
3 min
Often overlooked, government procurement professionals will play a critical role in helping communities, and local businesses recover from the pandemic

Procurement is more than just a private enterprise. COVID-19 reminded us that sourcing materials is an essential part of the government’s role. Throughout 2022, tiny departments sourced massive amounts of personal protective equipment (PPE), medical supplies, and emergency vaccines and testing kits. Even non-procurement professionals were pulled into the fray, as frantic timelines demanded nothing less. 

According to Celeste Frye, co-founder and CEO of Public Works Partners, the crisis brought procurement to the attention of skilled employees who had never considered it. As non-procurement personnel stepped up to help their coworkers, many found that they’d stumbled upon a critical and rewarding job. “Existing public employees have seen the essential nature of the work”, Frye said. “[They’ve] gained some critical skills and possibly [grown] interested in pursuing procurement as a longer-term career”. 

Small, Local Suppliers Take Charge

Frye, whose firm helps organisations engage stakeholders and develop long-term procurement strategies, thinks it well worth the effort to open one’s mind to new opportunities. Cooperative contracts, for instance, can help public departments and municipalities save money, time, and effort. By joining together with other towns or cities in the region, public procurement teams aggregate their purchasing power and can drive better deals. 

These cooperative contracts have the added benefit of advancing equity. Smaller suppliers that struggle to compete with established firms for government contracts can act as subcontractors, helping big suppliers fulfil bits of the project. Once they get their foot in the door, small, local, and disadvantaged suppliers can then leverage that government relationship to take on additional projects. 

Especially as governments start to pay attention to procurement resilience, public procurement departments must expand their requests for proposals (RFPs) to take into account innovative solutions and diverse suppliers. According to Frye, Public Works Partners—a certified female-owned firm—has benefitted from local and state requirements that specify diversity. 

Post-Pandemic Funding Swells Procurement Budgets 

And the pandemic won’t be the end of it. City governments need to build sustainable energy infrastructure such as solar panels, charging stations, and recycling plants, ensure that masks and medicines are never in short supply, and source new technologies to keep up with cloud and cybersecurity concerns. 

Public procurement budgets will likely increase to match demand. As Peter Ware, Partner and Head of Government at Browne Jacobson, explained, “in a non-pandemic world, the [U.K.] government spends on average around £290 billion on outsourced services, goods, and works...anywhere between 10% and 14% of Gross Domestic Product (GDP). Post-pandemic, city procurement will only increase as national governments provide local divisions with emergency funding.
And in truth, government employees might jump at the opportunity. Frye noted that public procurement could give immediate feedback on new programmes: “[Procurement] is where new laws and policies ‘hit the road’ and are implemented”, she said. “Professionals in these fields get the satisfaction of creating real change and seeing quantifiable outcomes of their work”.

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