In the rapidly evolving air cargo industry, a critical question continues to emerge: Has the e-commerce boom truly driven shipping rates to unprecedented heights? The sector is experiencing rollercoaster-like market fluctuations, with surging demand and shifting market dynamics raising sustainability concerns among industry players.
Global air cargo demand has rebounded significantly following pandemic disruptions, fueled by e-commerce growth and constrained ocean freight capacity. According to Matt Castle, Vice President of Global Air Freight at C.H. Robinson Worldwide Inc., many shippers are opting for air transport to avoid maritime shipping delays, pushing air cargo prices to post-pandemic highs.
Katherine Kaczynska, spokesperson for the International Air Transport Association (IATA), notes that while air cargo volumes have recovered, e-commerce's market impact will be lasting, compelling carriers to optimize logistics for faster deliveries. Geopolitical conflicts, particularly in the Red Sea region, have intensified these pressures, prompting more shippers to switch to air transport to minimize delays.
IATA data reveals steady air cargo volume growth since 2023, with projections indicating an eighth consecutive month of double-digit expansion in 2024, while capacity growth remains limited to approximately 5%. Castle observes that Asian e-commerce demand has led many carriers to redirect capacity from other routes to this booming market. Despite increased belly-hold capacity in passenger aircraft, matching supply with demand remains challenging.
Facing mounting pressure, air cargo operators and airports are pursuing operational efficiencies to enhance capacity. DHL is expanding facilities at multiple airports, while AIT Worldwide Logistics is increasing flight frequencies to meet peak season demand. Major airports are also investing heavily in cargo infrastructure to handle perishables, pharmaceuticals, and e-commerce shipments.
However, industry executives are sounding alarms about potential market bubbles. They caution against overfocusing on e-commerce at the expense of traditional clients. Asok Kumar, Global Head of Air Freight at DB Schenker, warns that while e-commerce shows explosive growth, it may not sustain the air cargo market long-term.
Airlines echo this sentiment, with many prioritizing capacity for traditional customers over e-commerce expansion. Anna-Maria Kirchner, Head of Global Sales at Finnair, notes that stringent regulations make e-commerce cargo a secondary priority for many carriers.
In the current tight market, shippers must carefully evaluate air transport options. C.H. Robinson emphasizes the growing importance of optimizing transportation strategies and business models, particularly during peak periods, to ensure efficient cargo movement and smooth supply chain operations.
