Expedited : Spotlight on Air Cargo
Special Report
Air freight is heading for an imminent capacity crunch amid expectations that the peak season will be the strongest one yet , and forwarders are having to placate their more traditional customers .
“ We have our regular bread-and-butter customers that are very concerned about this trend , and we need to know how we cater to the entire air freight industry that needs support ,” Asok Kumar , head of global air freight at forwarder DB Schenker , told the forum .
Capacity is already in short supply and is set to tighten further through the rest of the year , Emirates ’ Van Haeften warned .
“ We are already full ,” he said . “ All the second legs into Europe [ from Asia ] serving 40 cities , some of them up to eight flights a day , are all full .”
While air cargo executives at the forum also highlighted a struggle to serve their traditional markets and not devote all capacity to e-commerce cargo , they acknowledged it was difficult to differentiate between e-commerce and traditional air freight .
E-commerce represents up to 60 % of Cathay Pacific ’ s outbound volumes from Hong Kong .. Terry K / Shutterstock . com
“ It is hard to measure exactly what e-commerce is ,” Owen said . That was echoed by Van Haeften , who said on Europe and Americas routes , “ we don ’ t always recognize what e-commerce is .”
Veltman said airlines had to balance their traditional customers against the demands of the new segment and adapt their networks to serve the changing cargo flows .
“ It ’ s all e-commerce , and if it wasn ’ t there , we would all be in trouble .”
“ You can ’ t just focus on e-commerce , but it would be stupid to ignore it ,” he said . “ From this month , we have changed our schedules with a lot more capacity moved to China . The business is disrupting the market .”
A retired air cargo executive at the forum told the Journal of Commerce it makes little difference to carriers whether cargo is e-commerce or not , as long as it could fill their aircraft .
However , there is pressure coming from the International Air Transport Association to assign a special handling code for e-commerce that would aid safety and security checks as well as provide information to customs authorities at destination . That pressure is placing online shipments under greater scrutiny in the European Union and the US .
Regulatory crackdown
The increased regulatory scrutiny is regarded as a challenge to the unbridled growth of e-commerce , but it was mostly shrugged off by the airline executives who said the demand can withstand any legislative attempts in the US and European Union to clamp down on online orders arriving from China .
“ I can ’ t see any sensible government taking an axe to e-commerce ,” said Owen . “ It is a force for good for the general population and people wanting to purchase affordable goods . This is now a way of buying that will continue .”
Van Haeften said he expects some kind of legislation to come down the pipeline , but he does not believe it will “ change the curve .”
“ It will at most hamper the growth a little , but at the same time , we also see the number of people that buy through e-commerce is growing , so in the end , it is unstoppable ,” he told the forum .
Veltman agreed . “ Trade restrictions are never good for business ,” he said . “ And if the US imposes restrictions , you might see a reaction from China on goods imported from the US , and everyone is concerned .
“ The de minimis level [ currently at $ 800 ] could be lowered , but cargo will find a way via other gateways ,” Veltman added . “ People are very creative in getting cargo to where it needs to be . This is here to stay , and I don ’ t see legislation stopping it .”
email : greg . knowler @ spglobal . com www . joc . com October 7 , 2024 | Journal of Commerce 15