Cover Story
less , on the online platforms , it might be that 95 % of it is by air freight .”
A market update by Australia-based consultancy Trade and Transport Group found overall international air cargo tonnage handled at Asia-Pacific airports was up almost 14 % from January through July . Most of that growth in volume was in China , which was up 32 % year over year in the first seven months of 2024 ; Hong Kong volume was up 24 % in the same period . Other locations in Northeast Asia did not see the same level of growth .
“ One of the key drivers behind the recent strong performance in global international air cargo has been an increase in cross border e-commerce traffic rather than a recovery in traditional manufacturing-driven supply chain cargo ,” the consultancy found .
Ex-Asia demand keeping air cargo spot rates elevated in Q3
Global air cargo spot rate index , with year-over-year change
Level of Index
3,400 3,200 3,000 2,800
|
1,000
2,600
|
100 -20% |
2,400 |
-30% |
2,200 |
-40% |
2,000 |
1,800 |
-50% |
1,069 |
-100% |
1,600 |
-60% |
L |
Oct |
Jan 2023 |
Apr |
Jul
Jul , 2021
|
Oct |
Jan 2024 |
Apr |
Jul |
10 % 0 % -10 %
Year-over-year % change
In the crosshairs
A potential threat to the e-commerce bull run is the growing regulatory scrutiny into business-to-customer ( B2C ) online platforms , with calls to lower de minimis value thresholds in the US and Europe that allow the platforms to avoid import duties . Other suggestions from regulators include imposing a tax on certain commodities that are purchased online .
But even if legislation lowers the de minimis levels , cross-border e-commerce is here to stay and will continue to grow , van de Wouw said .
“ There are millions of US consumers who are not forced , but voluntarily buy stuff on these platforms ,” he said . “ The Chinese companies aren ’ t pushing packages into the US ; they are being pulled in by consumers . While a lot of the regulatory focus is on the online platforms avoiding tax , that is a result of their business model , not a founding principle of their business .”
Global Index
Source : Baltic Air Freight Indices powered by TAC
Year-over-year % change
© 2024 S & P Global
e-commerce market , despite the company being among the top five global air freight forwarders by volume .
Forwarder involvement comes down to a question of value-add , according to Glyn Hughes , director general of The International Air Cargo Association ( TIACA ). Hughes said forwarders have established sophisticated systems to deal with complex border management procedures and
“ There ’ s a new business model that consumers are tapping into .”
Brian Bourke , CCO at SEKO Logistics , said stiffer regulations may cause changes in air cargo , but he agreed that the general growth trend of cross-border e-commerce would continue regardless .
“ This is all very fluid and all in flux ,” Bourke told the Journal of Commerce . “ A lot of this demand is driven by the Internet and smartphones , and those things aren ’ t going away . And the rising middle class around the world isn ’ t going anywhere , either .”
While the cross-border e-commerce boom has been highly beneficial for airlines , forwarders have not been able to capitalize on the huge volume out of China that is filling much of the available air freight capacity . For instance , despite being one of the world ’ s largest global forwarders , Kuehne + Nagel ’ s e-commerce volume was “ in the single digits ,” a spokesperson said .
Similarly , DSV CEO Jens Lund said in a July 24 earnings call that the forwarder is “ not very present ” in the
12 Journal of Commerce | September 9 , 2024 www . joc . com