The air cargo industry is critical and highly valued for serving markets that demand speed and reliability for the transport of goods. Amidst the pandemic, there has been a significant rise in the demand for air freight. This is also fueled by the container shortage and fewer vessels catering to the ever-increasing demands of the logistics industry.

Today we speak to Mr. Tobias Hock, Project Logistics Alliance partner, from National Air Cargo for expert insights into this demand to know how the air freight industry is coping with this radical shift.  In conversation with Tobias…

PL-Alliance: 2020 marked 30 years since National Air Cargo’s inception. Can you please give our readers a brief overview of how the company has expanded? What does a normal day for you look like?

Tobias Hock: Ever since National is focusing on special transport solutions and going to places others are not able to go, mainly for the defense and military sector. Especially being the first ones to touch ground in unexplored areas or conflict scenarios has been our USP and this has never changed. Our owner’s philosophy of lean management and quick decision-making processes helps us to adapt quickly to customer needs in a fast-changing environment. This straight customer focus is lived throughout the company. During the last years, we managed to diversify our portfolio even more while discovering other business areas like High Tech, Aerospace, and lately Pharma. One of the biggest milestones of the enterprise was the addition of three new B747F´s to our sister company’s (National Airlines) fleet during the beginning of the pandemic. This led us from a small niche airline to a global player.

A typical day is always unpredictable, as the world never stands still. Especially not during the challenges we experience right now with all the global supply chain issues caused by COVID-19. Usually, I balance the day between freight forwarding business (air, ocean, and trucking) and airline tasks such as charter quotation, customer service, and operational tasks. It´s very important to ensure constant communication between the different divisions within National starting from operational departments to other sales colleagues and for sure our airline HQ in the USA.

PL-Alliance: How did you start your journey into the world of logistics? What motivated you to work in this rather niche sector of logistics which is air freight?

Tobias Hock: I always wanted to work in a fast-changing environment with a global reach. While working in logistics, you are always up to date, right? I started my apprenticeship at Kuehne & Nagel and enjoyed very good training on all important topics related to logistics. After several years and the first leadership experience, I took the opportunity to join National to start a new chapter in my career. Switching roles from a global player to a niche forwarder is something special and proven to be right as I enjoy the fast and quick communication between all stakeholders as well as the ability to be strongly involved in important decisions to achieve an efficient and timely solution for my customers.

Despite ocean freight being the backbone of global trade, the minimal airfreight portion is as important as the big ocean freight part. Let me tell you why: Airfreight always takes place where other modes of transport are limited in terms of speed, global reach, and transport safety.For clients identifying the values of airfreight as their right mode of transport, National will be the right partner to guide them through this challenge with first-class industry solutions. Finding these solutions and assisting the client in the whole door-door process motivates me the most.

PL-Alliance: The demand for air freight is limited by cost, typically priced 4–5 times that of road transport and 12–16 times that of sea transport. Even then there has been a steady growth in the air freight markets. Can you please explain to us this shift towards air freight from ocean freight? What are the development costs associated with the paramount shift?

Tobias Hock: From our point of view, the main reason is the continued growth of world trade and the significant development of e-commerce. People order something online and want it tomorrow (B2C). This will lead the producer’s factory to tasks like reducing the time of resources availability, cutting production time, and expanding capacity. As you can see, everything must be quicker and better connected. This trend will fire up the need for sustainable airfreight solutions. The Coronavirus and the result of urgently needed PPE equipment, vaccine, and other medical supplies is the latest push for global air freight demand.

PL-Alliance: A lot of freight forwarding companies are expanding their “own-controlled” charter network. Is National Air Cargo also establishing partnerships with a similar approach? Is this a move to combat capacity shortages due to the loss of belly-hold capacity?

Tobias Hock: You are right, we have seen a lot of freight forwarders creating their own controlled capacity. This will change the airfreight and aviation market significantly.

National is both freight forwarder and airline, so we have our own controlled capacity in-house, which is great. Basically, we can combine the advantages of being an airline and freight forwarder with each other, that´s what other forwarders want to do right now as well.

Nevertheless, we work very closely with external airline partners to always find a suitable flight for our clients. Speaking of National Airlines, we get a lot of inquiries from forwarders asking for an own controlled capacity setup while using our cargo aircraft. As the market is so volatile the forwarders are pushed to create their own solutions, to keep up with their clients' shipping requirements regarding pricing and transit time. Especially with the forecast in mind that belly capacity will not return by the end of 2022 (best guess). 

PL-Alliance: A lot of passenger-focused airlines today have started loading small cargo into their cabins to increase capacity. Does this pose a threat to cargo-focused air carriers? Is National Airlines also adopting these practices to mitigate losses and increase air freight capacity?

Tobias Hock: We operate both full cargo freighter and pure passenger aircraft. For sure we used our passenger aircraft as well for cargo-only operations around the world. This is necessary to keep the aircraft busy and fight the global pandemic while shipping essential medical goods (mostly small parcels) to desperately waiting for end users. As capacity is still pretty tight, we are happy to be busy with our freighter aircraft. We used the so-called “preighters” (PAX + Freighter) aircrafts many times because our own aircraft were busy doing other trips.

PL-Alliance: Vaccines are nothing new for the air cargo industry. Temperature-controlled vaccines have been transported for many years and have also become the preferred mode of transport. While some of these vaccines need to be transported in special temperature-controlled containers utilizing dry ice (classified as among dangerous goods) which again limit the use of cargo capacity. Are there any developments to tackle this capacity issue?

Tobias Hock: Global COVID-19 vaccine distribution is surely the biggest challenge right now to return to our so much wanted “normal”. We see a lot of development in recent months but there is still a long way to go. Usually, the temperature-controlled containers will be transported in the lower deck of passenger aircraft. Right now, the most important task is speeding up the whole vaccine process. Starting from production until final distribution all parties involved are working with a central focus on that crucial mission. Airlines and forwarders joined forces with pharma companies and governmental entities to pull on the same string and do their best for our mutual goal of global health. It is good to see that common goal in the industry to overcome as many hurdles as possible all together as a united team.

Each vaccine shot done is the right step forward to battle this global pandemic. National has identified the urgent need for capacity in the supply chain of the pharma companies as well as the governmental distribution projects and is working continuously to offer out-of-the-box solutions. Since the beginning of the pandemic, we have a very close relationship with our clients and help them in every possible way to find the best shipping solution even under extreme conditions.

PL-Alliance: It has been a little over a year that supply chains all over the world have been disrupted. The impacts of post-COVID-19 on the economy are yet to be seen. When do you expect those small and large companies even while making profits to get out of their survival mode? What does the future look like for not only the air freight but the forwarding industry in general?

Tobias Hock: The world has changed for sure, and the Coronavirus will continue following us in the future, hopefully not with that severe impact as of now. We expect that 2021 and 2022 will be special in terms of global trade and daily life. National lives the spirit that we always thrive for a better tomorrow and adapt to the current needs. The airline and forwarding industry must adapt in all aspects quickly to such scenarios, only companies who will identify the problems of the customers and offer them a first-hand solution will be the leaders of tomorrow's market.

Related links

Website National Air Cargo
LinkedIn National Air Cargo