In the wave of rapid global economic development, air cargo as a critical pillar of international trade requires profound transformation in its development patterns and operational models. While economic globalization presents opportunities, the air cargo industry faces a complex landscape of both promise and challenges. Despite generally positive market trends, the industry continues to struggle with profitability issues, particularly in China where problems like large wide-body freighter operations and incomplete business chains significantly constrain sustainable development.
I. Current Challenges in the Air Cargo Industry
China's air cargo industry, despite its early start, still faces numerous unresolved issues after decades of development. First, the industry suffers from weak overall profitability. While some major airlines have gained competitive advantages in route networks and customer resources through years of market competition, deficiencies in industrial chains and high operating costs keep overall operations in the red.
Meanwhile, intensifying competition—not just from traditional air cargo carriers but also from high-speed rail logistics—has eroded market share. High-speed rail logistics, with its convenience and relatively lower costs, presents growing competition for air cargo services.
II. Factors Influencing Air Cargo Development
The development of air cargo is shaped by both external and internal factors:
1. External Factors
- International Trade Volatility: Global economic conditions, such as the recent U.S.-China trade tensions, have reduced demand for air cargo, impacting overall shipping volume growth.
- High-Speed Rail Competition: Expanding high-speed rail networks now rival air cargo in speed while offering cost advantages, forcing traditional air cargo to adapt and innovate.
2. Internal Factors
- Outdated Business Models: China's relatively monolithic industrial structure makes traditional air cargo models ill-suited to rapidly changing market demands, particularly in customer experience and service diversity.
- Inadequate Ground Networks: Air cargo involves not just air transport but also ground logistics and warehousing. China's current lack of efficient ground support networks results in lengthy, inefficient supply chains.
III. The Impact of Digital Thinking on Air Cargo
The digital era has revolutionized industries, and air cargo must adapt to achieve efficient, modernized operations. Internet technologies enable faster information flow, optimize resource allocation, and enhance service quality.
1. Optimized Resource Allocation
- Big data and cloud computing can analyze market demand to allocate transport resources efficiently, reducing costs.
- Digital platforms can connect upstream and downstream players in the air cargo ecosystem, improving information flow and resource sharing.
2. Enhanced Service Capabilities
- Under digital thinking, air cargo companies can explore O2O (Online-to-Offline) models, offering self-service options and real-time tracking to meet customer demands for convenience and flexibility.
- Cross-industry collaborations, such as partnerships between airlines and e-commerce platforms, can expand service scope and create seamless logistics experiences.
IV. Recommendations for Tactical Innovation
To boost China's air cargo competitiveness, we propose three tactical innovations:
1. Establish an Air Cargo Bidding Platform
In the digital age, disintermediation and streamlined channels are inevitable. Air cargo companies should create an online bidding platform for real-time information exchange, allowing direct transactions between shippers and airlines. This would reduce intermediary costs while expanding service coverage and transparency.
2. Build an Air Cargo IoT System
With IoT technology advancing rapidly, air cargo should integrate smart logistics with traditional systems. Smart warehousing and automated transport would eliminate information asymmetry, while real-time monitoring of factors like weather and traffic would improve efficiency and customer satisfaction.
3. Develop a Freight Agent Trust System
Freight agents play vital roles but face credibility issues that harm transactions and industry reputation. A transparent credit system with incentives for trustworthy agents—such as preferential rates and services—would promote integrity and healthy industry growth.
V. Conclusion
Reforming the air cargo industry isn't just self-preservation—it's essential for staying competitive in a globalized, digital economy. By embracing digital thinking and modern technologies, the industry can rebuild its market and service chains, paving the way for sustainable growth and greater value for customers and society.
