Cover Story
Dawn of the e-cargo era
Air cargo defies seasonality amid soaring e-commerce demand
By Greg Knowler
Barring changes to import duty rules in the US and Europe , e-commerce platforms will keep driving up air cargo volumes while soaking up capacity and pushing up rates for the foreseeable future , even if consumer demand falters .
The enormity of sales driven by Chinese retail marketplace platforms such as Temu , Shein , Tmall and Taobao as they connect with an exploding consumer base is creating a new dynamic for an air cargo industry accustomed to seasonal patterns , not a perpetual peak season . In the short term , the entrants are crowding the market , but rising rates and tight space may spur other shippers to consider cheaper — but slower — transport modes in the long term .
“ Even with sluggish GDP growth , you see these massive air freight volumes because there ’ s a new business model that consumers are tapping into ,” Niall van de Wouw , chief air freight officer at rate benchmarking platform Xeneta , told the Journal of Commerce .
The most visible Chinese cross-border e-commerce marketplaces , Temu and Shein , offer inexpensive products made to order and exclusively use air freight to transport huge numbers of packages to the major markets of the US and Europe . Industry estimates suggest e-commerce accounts for 20 % of global air freight volume , with the volume exported from China alone enough to fill 50 to 80 freighter aircraft every day .
Van de Wouw said even with economic conditions and inflation slowing consumer spending , it is becoming less relevant how much people were spending on goods as opposed to the way in which they were spending .
“ If you spend £ 100 on the high street [ downtown ], there is a 95 % chance the goods you are buying will have come in by ocean ,” he said . “ But if you spend £ 80 , or 20 %
Shutterstock . com
10 Journal of Commerce | September 9 , 2024 www . joc . com