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Issue 3 2019 - FBJNA


A Delta Below Wing Employee loads a container onto an Airbus 330-300 (333). (Delta Air Cargo photo.)


///AIR CARGO


Air cargo carriers brace for e-commerce juggernaut


By John Jeter


While air-cargo executives and trade organizations see the global market softening, now might be the time, if only momentary, to prepare for the juggernaut that’s not only here but is about to explode by triple digits. That’s e-commerce. “[E-commerce] creates


significant opportunities for the air-cargo industry, be that one or 10 years from now,” says Chris Isaac, managing director of Revenue Management at American Airlines Cargo. According to a recently


released report by the International Air Transport Association (IATA), which quotes statistics from the International Port Corp. (IPC), e-commerce sales are projected to grow by 141% and reach a forecasted global sales value of $4.8 trillion. That’s exponentially higher than the 20% annual increases since 2005, says the paper entitled “Air cargo and E-commerce Enabling Global Trade.” Simultaneously, the paper


notes that online retail is still relatively immature and accounted for only 12% of total retail sales in 2018. “I don’t expect this trend


to slow down,” Isaac says. “So we, as an industry, will need to continue making changes to grow with it.” Brandon Fried, executive


director of the Airforwarders Association, concurs. “The airlines do what they do best and that’s flying people and cargo from airport to airport,” he says. “They’ve never been


good at going out and picking up cargo. Nor, by the way, have they been good at picking up passengers from their homes.” Sure, a plane is not going to


pick you up at home or drop a package on your porch, but United Cargo’s president, Jan Krems, acknowledges that carriers


“need


“E-commerce creates


significant opportunities for the air-cargo industry.” -- Chris Isaac, AACargo.


develop first-mile and final- mile solutions.”


Challenges for all


Fried suggests airlines should be even more involved in creating solutions and have a seat at the table to help address infrastructure issues such as warehousing and airport capacities. “Because e-commerce is


to


optimize real-time tracking technologies and work with other transport modes to


becoming such a megatrend, consumer demand is spiking,” he says. “It’s producing more volume for airlines.” Consequently, one of


the


biggest challenges for air carriers today is where freight


“Making the most of the opportunity presented by e-commerce will


require higher levels of innovation, flexibility, and cooperation among shippers, forwarders and carriers.” -- Jan Krems, United Cargo.


United Cargo workers in action. (United Cargo photo.)


is going to be placed once it gets to the airport.” Airports are experiencing


30% to 40% higher volumes than anticipated in the two to three years, “driven by e-commerce,” he says. While some folks among


AfA’s 275 member companies say they’re plenty busy, Fried says he gets an earful when he meets with hundreds of people across the country. “They


tell me they’re


are challenged.” Fried contends that finding


solutions to challenges resulting from cargo booms caused by e-commerce involves all stakeholders. Krems agrees. “Collaboration


is key to our logistics model,” he says. “Making the most of the opportunity presented by e-commerce will require higher levels of innovation, flexibility, and co o p e r a t i o n


14 >>


concerned that offloaded


they or


have


trucks piling up at the airport,” he says. “They can’t get their freight


picked


up because there’s so much volume coming in. Handlers


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