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E-commerce is rapidly growing and the air cargo industry must be prepared to handle the forecasted increase in cross border e-commerce shipments, according to an executive of IATA
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Approximately 18-20% of air cargo is e-commerce and it is expected to grow to 22% in 2022
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E-commerce grew to US$5.2 trillion in 2021 and online sales are forecasted to reach around $5.7 trillion in 2022
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There are five strategies to address these pain points and for airlines to adapt to the needs of e-commerce players
E-commerce is rapidly growing and the air cargo industry must be prepared to handle the forecasted increase in cross border e-commerce shipments, according to an executive of the International Air Transport Association (IATA).
The COVID-19 pandemic has accelerated growth of e-commerce, growing to US$5.2 trillion in 2021 and with online sales projected to reach around $5.7 trillion in 2022, according to IATA head of eCommerce, Cargo and Mail Operations Andre Majeres during a recent presentation at the first Philippines Air Cargo Day organized by IATA, the Philippine Multimodal Transport and Logistics Association and PortCalls.
Approximately 18-20% of air cargo is e-commerce and it is seen to grow to 22% in 2022. Moreover, about 80% of cross border e-commerce is shipped via air.
To capitalize on the demand brought by the e-commerce industry, Majeres said air cargo industry players must address pain points and turn them into opportunities.
These pain points include unstandardized services and pricing, high international rates, lack of tailored products, insufficient service levels in fulfillment, low visibility of status, slow pricing processes and reduced rate competition, inflated costs of forwarding, and poor visibility, disconnections in track and trace mechanisms and reverse logistics.
Majeres said there are five strategies to address these pain points and for airlines to adapt to the needs of e-commerce players. These are to focus on e-commerce products and services, digitalize to increase speed, build into own system, shift to cargo, and compete through responsiveness and value-added services.
He said airlines and freight forwarders must be creative and consider what value-added service they can provide e-commerce players. He also emphasized on the need for digital transformation to increase speed as e-commerce players “don’t play with paper anymore.”
According to an IATA white paper, e-commerce players expect innovation from their partners, and therefore, the complexity and out-of-date processes that are still in place in the logistics industry must evolve to meet their needs.
“Before the pandemic, e-commerce was really key to air cargo. It was absolutely essential, it was part of the business, it was bringing business to our industry. But today, honestly, air cargo is key to e-commerce. They need us. So, let’s be prepared and, again, and just offer what they need,” Majeres said. – Roumina Pablo
