Airfreight maintains “extraordinary” volumes as e-commerce grows

The latest U.S. Customs and Border Protection (CBP) e-commerce import regulations and greater inspection of goods appear to have had no impact on air freight rates.

Although several sources said Loadstar that planned e-commerce-focused services due to launch in the second half have faltered somewhat, existing traffic has held steady, as have rates – in fact, summer air cargo continues to perform surprisingly well.

“There are extraordinary volumes on the market,” said Niall van de Wouw, director of air freight at Xenet.

“We have gone from probable to probable that there could be double-digit growth this year. I’m not picking up any signs that things might go south.

“Overseas rates are crazy and crazy rates can lead to unreliable service, which is good for air freight. The air transport industry doesn’t really have control over its fate, it has ups and downs, but imagine if there was no e-commerce.”

An air freight forwarder in Shanghai added: “I personally haven’t seen any decline in the e-commerce industry yet, even with the news that U.S. and EU customs are more stringently checking small packages shipped from China.

“Overall e-commerce volume currently takes up more than 50% of airline capacity. The latest air freight rates out of China have remained steady for several weeks.”

He added that air freight could shrink as the summer progresses – if that happens to sea freight.

“But I don’t think air freight will drop significantly.”

A freight forwarder from Singapore added: “The air freight market from Asia to the US appears to be very buoyant. Most Asian airlines say their June seats are fully booked and are only accepting new bookings based on express ratings.

“For travel from Asia to Europe, the situation is not as bad and airlines are still able to accept bookings for June at general cargo rates. However, for most routes, airlines currently quote weekly rates due to market volatility.

A large part of the market remains skeptical about e-commerce and its sustainability. E-commerce volumes continue to make it difficult to acquire capacity for the rest of the market, and freight forwarder Iain Donald, director of ISD Logistics Solutions, noted on social media: “I know I’m not the only freight forwarder who sees the growth of e-commerce adversely impacting available e-commerce solutions. air freight in terms of the availability of commercial cargo.

“There has to be a limit at some stage, otherwise other parts of the economy will be left behind and countries will constantly have cheap, throwaway e-commerce imported into them, impacting local economies that once had significant power.

“Are (e-commerce platforms) concerned about the latest US CBP findings regarding goods shipped from stores around the world? If I was handling any part of the logistics of these shipments, I would definitely think twice now.”

Jonathan Holmes, director of global sales strategy at ANA Cargo, questions the true value of e-commerce for carriers.

“For commercial carriers, e-commerce is an economic loss. This is the lowest efficiency load and has a large volume. Advertisers make money from consolidation, unlike integrators who make money from bundling.

“The nature of e-commerce logistics is to constantly reduce costs. The rate of reduction in the amount consumers are willing to pay is much greater than commercial carriers can compensate in cost reductions. In this game, ads squeeze the life out of them over time.

“In a relatively short period of time, smart commercial carriers will be out of the e-commerce game and this will largely be the domain of integrators. There is simply not enough margin (or none at all) for commercial carriers to make a living.”

However, it looks like these volumes will remain, at least this year.