Dynamic pricing complicates air cargo transportation
The shift of airlines to dynamic pricing and fragmented booking channels makes it more challenging for freight forwarders to calculate costs and find available cargo capacity. To operate efficiently, it is essential to integrate digital platforms and apply professional judgment when selecting the best solutions for clients.
Vector
Airlines are increasingly adopting dynamic pricing, which, combined with fragmented booking channels and scattered data, makes it more challenging for freight forwarders to calculate costs for clients and secure cargo capacity.
The Rise of Dynamic Pricing
Many major international air cargo carriers are shifting to dynamic pricing through their own or third-party digital portals. E-commerce shipments are often offered at lower rates, while remaining capacity is placed on the spot market with fluctuating rates to maximize revenue. This trend is especially noticeable on key global trade routes.
Airlines aim to respond more quickly to market demand and boost profits, so they are increasingly using dynamic pricing and spot sales instead of fixed long-term rates. Long-term agreements remain important for strategic clients but are becoming more flexible and often include dynamic pricing elements.
Impact on Forwarders
Changes in pricing approaches have significantly affected how forwarders acquire cargo capacity. Rates and availability often differ between airline websites and third-party booking platforms. To get a complete picture, forwarders must check multiple platforms, where the same flight may have different rates and varying cargo space availability.
In some cases, the system may automatically move cargo to later dates if the selected flight is unsuitable due to aircraft type or insufficient capacity. The lack of immediate contact with an airline representative or support creates additional challenges for forwarders.
Causes of Discrepancies and Transparency Issues
Airlines may allocate different inventory to various sales channels, and not all booking platforms update simultaneously. Some rates are based on special commercial agreements, while others reflect spot market prices. Additionally, certain booking platforms may add their own markup for specific airlines or routes, leading to price differences for the same flight.
Fragmented information has become an industry-wide issue: forwarders must reconcile data from airline portals, booking platforms, direct agreements, email, and other sources, which may reflect different contracts, validity periods, surcharges, service conditions, and update cycles.
Shorter Quotation Validity
Dynamic pricing shortens the validity period of quotes, making it harder to determine current options for sales, booking, and delivery. A rate may be valid when received but become unavailable by the time it is confirmed with the client, requiring recalculation, service changes, or searching for alternatives.
In this environment, the professional judgment of the forwarder becomes increasingly important, as they must consider not only cost but also speed, reliability, and flexibility when selecting the best option for the client.
Operational Challenges and System Integration
Operational issues arise when digital booking systems do not reflect the actual availability of aircraft, especially during peak periods or on fully booked flights. Such situations are more common with airlines that manage cargo sales independently, as opposed to those working through professional GSAs, where capacity control and client communication are usually better.
To address these challenges, better integration is needed between airline systems and digital booking platforms, as well as more timely updates on availability and transparency when capacity changes.
The Human Factor
Despite the development of digital platforms, air cargo remains a people-driven business. Digital tools cannot fully replace experienced teams capable of quickly solving problems and supporting clients in non-standard situations. The optimal approach combines digital efficiency with high-quality human support.
To improve transparency, it is recommended that digital platforms clearly indicate the source of the rate, the time it was obtained, included services, as well as the status of the space (tentative or confirmed) and possible changes before booking. This enables forwarders to make offers for which they can be accountable to their clients.
