Dive Brief:
- A surge in e-commerce volumes from China and Hong Kong pushed global air cargo demand up 5% year over year in November, according to a Dec. 7 emailed analysis from Xeneta’s Clive Data Services.
- While e-commerce companies Shein and Temu almost single-handedly accounted for the increase in volumes and air cargo rates last month, the data doesn’t point to a fundamental global market shift.
- “You rarely have a conversation with an airline or forwarder right now that doesn’t reference Shein or Temu because these two e-commerce behemoths seem to be upsetting the market by themselves, supposedly accounting for some 80% of airfreight volumes ex-Hong Kong on certain days,” said Niall van de Wouw, chief airfreight officer at Xeneta.
Dive Insight:
Although November’s uptick isn’t seen as an economy or market change, it showcases air cargo’s “growing dependency on e-commerce,” according to van de Wouw.
Van de Wouw noted that air freight is key to e-commerce because it “relies on speed,” but questioned whether the model is sustainable.
“This need for capacity is creating quite a bit of havoc in the market — but this is a local shift and not a bellwether for a changing global economic tide,” he said. “It is more related to US and European consumers buying more lower value goods from these vendors.”
Van de Wouw added that the demand improvement being driven by low-value products is a worry for carriers and forwarders.
“E-commerce produces big volumes but how can you, in a sustainable manner, deliver an $8 t-shirt to someone’s doorstep from China to the US and make money across the entire supply chain?” he said. “Even the vendors delivering these goods question its long-term viability.”
Despite November’s slight bump in demand, the general air cargo market continues to show a weak market trend. Global air freight capacity is also anticipated to still outpace market demand in 2024, Clive reported. This is attributed to expected weak consumer spending in the first half of next year, and ongoing recovering belly capacity for certain markets due to passenger travel.
