WEEKLY NEWS BY Ajinkya GURAV


THE e-commerce boom continues to reshape global trade dynamics, presenting both opportunities and challenges for the air cargo industry. “e-commerce is not just a segment; it’s a revolution driving significant


E-COMMERCE IMPLICATIONS FOR THE INDUSTRY


changes across the supply chain,” Jonathan Mellink, Head of Sales and Marketing at Rotate, stated. “The challenge for the air cargo industry is to evolve rapidly enough to capitalise on this growth while mitigating emerging risks.” Global air cargo demand grew by an impressive 13 percent year-over-year


through October 2024, driven largely by e-commerce shipments. “Despite capacity growth lagging behind at eight percent, the sector has


demonstrated remarkable resilience and adaptability,” he added, noting that the disparity between demand and capacity growth has created a “hot” market, with yields increasing by 12 percent to US$2.55 per kilogramme, even as fuel costs dropped significantly during the year. However, capacity constraints remain a concern. Integrator networks such


as FedEx, UPS, and DHL have shown limited capacity growth, and delays in the delivery of new freighter aircraft like the B777XF and A350F are expected to exacerbate this issue in 2025. “The industry must address these capacity bottlenecks to sustain growth and profitability,” Mellink cautioned.


The role of China China continues to lead global e-commerce exports, with its share of air trade increasing steadily over the past decade, which is visible in the growth of Chinese exports, particularly to North America and Europe. “China has set the benchmark for e-commerce logistics, leveraging its robust infrastructure and production capabilities,” Mellink said. Emerging markets such as Southeast Asia, Latin America, and Africa are


expected to be the next frontiers for e-commerce growth as demand in North America and Europe begins to mature. “These markets represent significant untapped potential, but their development will require tailored logistics solutions and infrastructure investments,” he added.


Shifting fulfilment Companies like Temu and Shein, which rely heavily on air transport under de minimis regulations, are facing increased scrutiny and potential regulatory changes. Adjustments to customs thresholds or other regulations could impact the cost competitiveness of airfreight for e-commerce. “Regulatory risks are a growing concern for the industry,” Mellink stated.


“Changes to import rules or sustainability mandates could disrupt existing models, forcing companies to adapt quickly to maintain their market positions.” As the e-commerce sector continues its meteoric rise, the air cargo


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industry finds itself at a crossroads, balancing opportunities with the need for strategic recalibration. “The rapid expansion of e-commerce is undeniably a major driver for air cargo


demand,” Mellink stated. “However, its impact underscores the necessity for balancing growth in this sector with the fundamental elements that sustain network profitability.” While e-commerce attracts much of the spotlight, general cargo remains


the backbone of many carriers’ profitability. “e-commerce might be the exciting growth story, but general cargo provides


the stability that airlines need for long-term success. Balancing these two will be critical for the industry’s future,” he emphasised. The challenge of capacity optimisation also looms large. With international


air cargo capacity growing by only eight percent against a 10-12 percent rise in demand, resource utilisation has become a pressing concern. “As flights on key trade lanes approach full capacity, efficient resource


utilisation will not just be an operational goal but a strategic imperative,” Mellink explained.


Regional potential Regions such as Southeast Asia, Latin America, and Africa present immense opportunity but require tailored logistics solutions and localised partnerships to unlock potential areas for expansion. “Emerging markets hold the key to the next wave of growth,” Mellink said.


“To tap into these opportunities, carriers must adapt their strategies to the unique challenges and dynamics of these regions.” The air cargo industry is also navigating an increasingly complex regulatory


environment, with potential changes to tariffs, customs requirements, and sustainability mandates. These factors demand agility and forward-thinking approaches. “Freight carriers must not only address current market dynamics but also


anticipate and adapt to regulatory shifts,” Mellink noted. Despite the challenges, the industry’s prospects remain strong. With


e-commerce volumes projected to grow steadily, the sector stands at the cusp of transformative growth. As Mellink concluded: “The air cargo industry has always been resilient. By


embracing innovation, optimising capacity, and fostering partnerships in new markets, it can turn the challenges of today into the successes of tomorrow.”


ACW 16 DECEMBER 2024 www.aircargoweek.com


AIR CARG O WEEK


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