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E-shopping holidays deliver air cargo peak-season stress
Source
American Shipper
Post Date
11/09/2018

The big online shopping dates in November that cut across national borders will soon add huge volume to tightening international air freight pipelines, just as the peak season starts to kick off.
Singles’ Day, Black Friday, and Cyber Monday are coming, and while the line between e-commerce and general air cargo is sometimes hard to see, there is no doubting the effect rising demand for air freight is already having on the market.
Sebastiaan Scholte, CEO of Jan de Rijk Logistics, told JOC.com that although business was not as busy as last year, “we did see an increase in the last couple of weeks.”
But it is the next two weeks of November when the real action will be found, and forwarders are preparing their operations to handle the consolidation, destuffing, fulfilment, and brutal last-mile demands the e-commerce shopping festivals will generate.
Although Black Friday and Cyber Monday are traditionally US events, and Singles’ Day on Nov. 11 is thought of as a Chinese occasion, Swiss-based forwarder Panalpina said the events would grow into global shopping and shipping events, with the air freight volumes to prove it.
A sustained, global air cargo demand increase
Lucas Kuehner, Panalpina’s global head of air freight, said in a blog post that e-commerce was the fastest-growing air cargo sector and it was driving global volume.
“We have gone from zero to an estimated 20,000 tons [of e-commerce air freight] in only two years. The actual figure is likely to be higher,” he said. Kuehner pointed out that the market was getting bigger as traditional stores turned increasingly to e-commerce and to air freight.
“When doing e-commerce air freight, you have to know exactly what you’re doing and deliver with speed and consistency. That includes staying on top of customs, as well as dangerous goods and security regulations because nothing can go wrong,” he said.
But all eyes, and forwarder efforts, will have to be tightly focused on e-commerce for the rest of November. Kuehner said legions of consumers would go online this month to purchase products, but after the final, effortless click, their international orders had to be consolidated, transported, and deconsolidated — often multiple times.
“Only freight consolidation can make international e-commerce shipments affordable in the first place. Otherwise, transport costs, especially for air freight, would be too high and often in no relation to the price of the purchased product,” Kuehner said.
“But the consolidation comes with challenges. In many cases, the original shipper details and the product information get diluted by a single commodity list provided under the name of the consolidator, who deals directly with a freight forwarder such as Panalpina. That makes e-commerce cargo riskier than other cargo.”
There have been concerns over the available capacity in the market and fears that the chronic space shortages of peak season 2017 will be repeated. However, Asian airlines — which transport more than 40 percent of all global air freight — have moved to allay shipper fears of chronic space constraints this peak season and believe belly cargo and flexible freighter flights should be able to handle cargo owners front-loading shipments ahead of the Jan. 1 round of US trade tariffs on China.
This view is shared by commodity and freight broker Freight Investor Service (FIS). “There should be enough space as supply catches up with demand, but it is still possible to have a peak like we did last year [2017],” a spokesperson for FIS told JOC.com.
Unlike the container shipping industry, which has reported just one profi year in the last seven, the air cargo market has been enjoying profitability since 2010. Air cargo markets have reported 5.1 percent compound annual growth rates in the last six years and global airlines are on track for a $33.8 billion net profit in 2018.


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