How do labour shortages affect air cargo capacity and growth?

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Labour Shortages Significantly Hamper Air Cargo Capacity and Growth

Labour shortages, exacerbated by factors such as employees in quarantine, insufficient airport storage, and processing backlogs during the year-end rush, have directly contributed to supply chain disruptions and a slower growth rate in the air cargo market. These constraints within the logistics system have unexpectedly led to lost opportunities for expansion.
Direct Impact of Labour Shortages on Supply Chains

The air cargo industry experienced significant supply chain disruptions in November 2021, directly impacting growth. These disruptions were a consequence of labour shortages, which were partly attributed to employees needing to quarantine. Furthermore, inadequate storage facilities at certain airports and processing delays, intensified by the year-end surge in demand, compounded these issues, leading to a slowdown in operations.
Constraints Lead to Lost Growth Opportunities

The pressures stemming from labour shortages and broader constraints across the logistics system unexpectedly resulted in missed growth potential for air cargo. While economic indicators suggested continued strong demand, the operational limitations prevented the market from fully capitalizing on these favourable conditions. This situation led to a significant deceleration in growth, with demand increasing by only 3.7 per cent in November 2021 compared to November 2019, a marked decrease from the 8.2 per cent growth recorded in October 2021.
Calls for Government Policy Incentives

In response to these challenges, the International Air Transport Association (IATA) has urged governments to implement innovative policy incentives to address the existing labour shortages. IATA's director general, Willie Walsh, emphasized the need for swift government action to alleviate pressure on global supply chains, suggesting that policymakers should ensure air crew operations are not impeded by COVID-19 restrictions intended for air travellers. The association hopes that such measures will help to mitigate the disruptions and support the economic recovery.

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How do labour shortages affect air cargo capacity and growth?

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