It’s been another extraordinary few months for the air freight sector and logistics more broadly, with the attacks on container shipping in the Red Sea continuing to disrupt supply chains, causing conversion of some sea freight to air cargo and sea-air traffic, and putting significant pressure on air cargo capacity, infrastructure and pricing in some markets. Alongside this, we’ve seen demand for air freight capacity from the e-commerce sector continue to build, especially from parts of southern China. As highlighted in the article on page 56, McKinsey estimates that as much as 70% of air cargo from southern China’s Greater Bay Area is e-commerce traffic. McKinsey’s Ludwig Hausmann pointed out that one single new e-commerce shipper – Temu – now accounts for 7% of global cross-border e-commerce orders, most of which are shipped by air, compared with 0% in 2022. He highlights that there is no single cargo airline that has 7% market share on a global scale.
In the interview article on page 4, Cathay Cargo’s Tom Owen estimates that around 50-60% of the GBA-origin cargo Cathay currently flies is e-commerce generated, with Cathay particularly well positioned to capitalise on the extraordinary growth in cross-border e-commerce thanks to its location in Hong Kong.

Some countries, including the US, have indicated their intention to review and change their so-called ‘de minimis’ duty-free import thresholds, moves that could threaten some e-commerce models. But in the absence of bold and significant moves by regulators along those lines, e-commerce and the air freight needs it generates seem set to continue growing strongly.
Unsurprisingly, e-commerce took up a significant amount of space at this year’s World Cargo Symposium in Hong Kong, along with themes including artificial intelligence, One Record, and the usual topics of digitalisation, efficiency, safety, and people.

A number of One Record trials have already been taking place, and technology representatives and others acknowledge that they need to build and promote convincing use cases and business cases in order to help get more of the industry on board. But momentum seems to be building there, with support including from Chinese e-commerce logistics specialist Cainiao, as highlighted in the Vertical Focus on E-commerce (page 42).

How to best serve and handle this market is a topic for continuing debate, and the article explores one model – a close partnership between e-commerce logistics specialist, cargo handler, and airline. Hausmann suggests that carriers or cargo handlers could ‘reimagine’ their businesses to step into the role of ‘commercial parcel forwarder’, although it would require significant investment in areas such as customs clearance and end-to end logistics and fulfilment capabilities. Some carriers are trying to enter this space, but forwarders seem likely to continue to have an important role there, with many already building e-commerce logistics capabilities.