That was the title of a panel at the Aviation Connect in Istanbul at the end of OCT24. A vast subject, given the scope of what constitutes supply chains, as was acknowledged by moderator, Asok Kumar, Head of Global Air Freight at DB Schenker, in his opening summary. “It’s a very broad topic. Understanding the latest trends is critical and important: supply chain dynamics, continuity, digitization, AI, sustainability, Mergers and Acquisitions in a very fragmentized industry…,” he listed before inviting his panelists to the stage to discuss the industry’s emerging trends, challenges, and strategies to navigate the evolving landscape.
Joining him, were Ram Menon, Group Chief Commercial Officer of Wallenborn Transports; Martin Drew, Chief Strategy & Transformation Officer of Atlas Air; Thomas Yu, Senior Director, Global Hub Operations and Product Development at Cainiao Network; Kendy Choi, Director Commercial & Partnership Regional Hub Services at Cainiao Group; Mohanned Badri, Vice President Operations at Saudia Cargo; and Joanna Li, Executive Director – Commercial and Business Development at HACTL.
Capacity constraints are a growing challenge
In answer to the question of the latest trends affecting supply chain dynamics, the capacity crisis clearly took first place when it came to the industry’s challenges. Martin Drew noted that despite being the world’s second-largest cargo airline, demand consistently outpaces supply. “Capacity shortages will continue for the foreseeable future,” he predicted, pointing to delays in production, new aircraft technologies and certification for converted freighters. The industry eagerly anticipates Airbus’s widebody freighter debut in 2026, yet systemic pressures will remain.
Mohanned Badri highlighted the dual challenge of rising demand and smaller passenger aircraft replacing larger models, further straining capacity. “Older aircraft consume much fuel and are therefore less efficient, and newer models don’t meet demand,” he stated. “A clear trend is value creation for customers,” he noted, underlining the importance of partnerships such as Saudia Cargo’s collaboration with Cainiao in Liège, to expedite deliveries.
Kendy Choi agreed and stressed the need for integration across the supply chain. “Cost barriers must come down, and collaboration is key,” she argued, aligning with Joanna Li, who advocated for agility and customer-centric solutions to address these constraints.
e-commerce is a double-edged sword
e-commerce has been both a boon and a challenge for the industry. Li highlighted its exponential growth and its impact, especially the handling of complex shipments such as lithium batteries which require specialized safety measures. “e-commerce brings business but significantly increases risk,” she explained. Thermal detection systems, Lithium Battery dogs and other initiatives all require investments to ensure safe handling and transport.
Drew acknowledged the growing flow of goods from China to Latin America and Mexico, driven by e-commerce. “It’s safe to say e-commerce will always find a way,” he remarked, underscoring its role in reshaping global trade routes.
Sustainability: aspirations vs. practicality
With the International Civil Aviation Organization (ICAO) setting ambitious sustainability regulations for 2028, the panelists debated the feasibility of these goals. Drew’s opinion: “I don’t see how 2028 will be achievable. There are 633 widebody freighters in the world. 103 of those (mostly MD11) are over 30 years old,” he illustrated. Though Atlas Air pushes SAF, it is extremely expensive, and not enough is being produced. “How much of that [cost] can be passed on to the customer?” he queried. Badri, too, warned of skyrocketing costs as older, less fuel-efficient aircraft are phased out. “We all support sustainability, but it needs to make sense,” he argued, echoing Drew’s concerns.
On the ground, Ram Menon highlighted the high costs of transitioning to hydrogen and electric vehicles – including the lack of infrastructural support, as well as the expensive running costs. “Hydrogen is 115% more expensive to run than diesel RFS,” he revealed. “Everyone wants sustainability, but no one wants to pay for it,” he said, emphasizing the importance of optimizing current diesel fleets to balance cost and emissions.
Technological integration requires a mindset shift
Technology is a driving force behind supply chain transformation, Choi explained, describing it as a “mindset,” and urging stakeholders to integrate systems rapidly to unlock e-commerce’s full potential. Drew lamented the slow pace of digitalization in cargo compared to passenger aviation, while Badri celebrated the transformative impact of artificial intelligence (AI).
Menon called for improved communication and collaboration, particularly for road feeder services (RFS), which often bear the brunt of inefficiencies. “Turnaround time is our biggest challenge,” he stated, advocating for agility, flexibility and clear communication across the supply chain to mitigate delays.
Collaboration and agility are key
Collaboration came up time and again during the discussion. Li urged stakeholders to involve ground handling agents (GHAs) in planning and decision-making, highlighting their critical role in ensuring smooth operations. “We can be the stopper if something doesn’t work,” she cautioned.
Menon echoed this sentiment, emphasizing the shift away from traditional silos toward a more integrated approach. “The old boys’ club of cargo is changing,” he declared, a sentiment shared by Drew, who noted the increasing role of partnerships in driving value and efficiency.
The road ahead
As the supply chain industry grapples with all these challenges, the consensus among the panelists was clear: adaptability, innovation, and collaboration are paramount. “Post-COVID, our industry has transformed completely,” Badri concluded, with e-commerce shaping the future in ways no one predicted a decade ago. And while sustainability, capacity, and digitalization pose significant hurdles, the industry’s resilience and ingenuity offer hope. As Choi aptly summarized, “Technology is no longer just a tool – it’s a mindset. To thrive, we must integrate faster and smarter.”
