NEWS


E-COMMERCE GOES INTO OVERDRIVE


AIR CARG O WEEK


CHINA and its internet retailers are leading the way in an e-commerce boom, which is not only supporting the air cargo sector but likely bringing in a range of changes across the sector. “The industry has been exploding in terms of cross-border


AZura International, Robert Denholm House, Bletchingley Road, Nutfield, Surrey RH1 4HW, United Kingdom Tel: +44 (0)1737 906107


Advertising: sales@azurainternational.com Subscriptions: subs@azurainternational.com Press releases: news@azurainternational.com


www.aircargoweek.com • www.azfreight.com Editor:


Supplement Editor: Associate Editor: Contributors:


Director of Operations:


International Sales Director: International Sales Executive: Finance Manager:


Design & Production Manager: Production Supervisor: Website Consultant:


Managing Director:


Edward Hardy James Graham Chris Lewis


David Craik, Stuart Flitton, Neil Madden, Donald Urquhart Kim Smith


Rosa Bellanca Zainab Khalid Rachel Burns Alex Brown Kevin Dennis


Tim Brocklehurst Steven Polmans Annual subscription rates: £100 • €120 • US$140


The views and opinions expressed in this publication are not necessarily those of the publishers. Whilst every care is taken, the publishers cannot be held legally responsible for any errors in articles or advertisements. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by electronic, mechanical, photographic or other means without the prior consent of the publishers. USA: The publishers shall not be liable for losses, claims, damages or expenses arising out of or attributed to the contents of Air Cargo Week, insofar as they are based on information, presentations, reports or data that have been publicly disseminated, furnished or otherwise communicated to Air Cargo Week. © AZura international 2024 • ISSN 2040-1671


AZURA INTERNATIONAL Printed by Warners Midlands plc. The Mailing, Manor Lane, Bourne, Lincolnshire PE10 9PH


e-commerce,” said Steve Saxon, Partner, McKinsey & Co, who added it is “seriously underestimated….in particular China outbound.” One of the big reasons for this is customs data does not


capture the full picture because it tends to travel as parcels, which Jaisey Yip, VP Cargo Business Division at Changi Airport Group, labelled “parcelisation”. The other issue is these values are low-yielding products, meaning that, while it counts for significant amount of volume, it doesn’t show much value. There are eight billion e-commerce orders a year,


according to Saxon, of which roughly one in six (around 16%) are cross-border. This has led to the situation where “there is the equivalent of seventy freighters a day e-commerce demand in China.” Support for this comes from well-placed but different


industry sources. Wilson Kwong, Chief Executive of Hong Kong Air Cargo Terminals Limited (Hactl) said cargo growth at Hong Kong airport for last year was 3.2% to 4.3 million tonnes with “a lot of growth in the fourth quarter.”


The


boom was bigger in Europe, with Liege Airport recording 15% to 20% import growth, according to Torsten Wefers, Liege Airport’s VP Sales & Marketing. Both Kwong and Wefers are candid about what the cause


is – China. “What is really driving that is e-commerce” Kwong said.


“Longer term the prospect of growth is definitely positive.” Tefers was a bit more striking: “We anticipate 11% growth


again, mainly coming from the booming Chinese market.” The key drivers in all this is the rise, although virtual vertical ascent is probably a better way of putting it, of four


2 ACW 19 FEBRUARY 2024


Chinese companies: Shein, Temu, TikTok Shop and Alibaba – labelled ‘the Fantastic Four’ by Thomas Yu, Director Global Hub Operations & Product Development, Cainiao Network/ Alibaba Group. Alibaba is the veteran of the group at ten years old but two


others Temu and Shein, who work on a fast fashion almost direct from the factory model in China, are credited with so much of the growth. “Whoever heard of Temu eighteen months ago?” Martin


Drew, Chief Strategy & Transformation Officer for Atlas Air Worldwide said. Currently Temu is shifting between 1,500 and 2,000 tonnes daily and the expectation is it will be moving 5,000 tonnes daily by the year end. “That’s the equivalent of fifty 747s a day,” Drew added,


assuming they can secure the planes, ground handlers and the staff to do their bit in processing it all. One of Temu’s strengths is its reputation as a consolidator


which gives them a high density. “They are maxed out in terms of payload because of the density they are achieving” Drew said before suggesting they might not need additional volume. This would be good as a concern flagged by Drew for the future was the sheer lack of capacity, not just in terms of planes, but also in terms of services available. It also throws the emphasis back onto an industry-wide


problem: the lack of digitalisation, which would help goods move faster and more reliably. Whilst Kwong urged the industry to tackle this, in part because of how automation can address ongoing labour challenges, he also pointed out one way forward is another industry buzzword – collaboration. “Build a relationship with the ground handlers early and give them as much information as early as possible,” he said.


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16