Get ready for big supply chain overhaul in North America
After completing just one month in the White House, the United States president Joe Biden on February 24, 2021, signed an executive order requiring a review of supply chains within 100 days triggered by pandemic-led disruptions. On June 8, the White House released the report identifying the fragility of the US supply chains on four critical products: semiconductor manufacturing; large capacity batteries; critical minerals and materials; and pharmaceuticals and APIs. This pointed at underinvestment in domestic production, private sector prioritization of low-cost, unregulated labour markets and unfair trade practices by competitor countries.
The report is perceived as the completion of its first step towards significantly, if not completely, overhauling the global supply chains connected to the US and North America with wide-ranging reforms and geopolitical strategies. So in the coming months and years, supply chain executives and companies not just in air cargo but across all modes should expect a significant shift in commodity flows.
As a result of the capacity cut and surge in demand the North American markets has brought many changes in the air cargo operations including the increased demand for freighters, as belly capacity is down, and the increased activities in cargo gateway airports which caused several operational challenges to airports as well as airlines.
North American domestic air cargo
Despite the cargo surge and congestions reported in many North American Airports, the data released by the US Census Bureau in June 2021 shows that the ratio between inventory sizes and sales of US retailers dropped to a new historical low in April 2021. It shows the sheer size of supply-demand imbalance in the North American market.
Jannie Davel, managing director commercial, Delta Cargo, informed that the airline has seen a strong increase in US domestic and cross-border e-commerce movements as well as high demand for pharma shipments, especially the Covid-19 vaccines.
Davel has identified a couple of trends in the air cargo industry as well.
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