Analyst Insight: This year, e-commerce is still expected to be a major driver of increased air cargo demand. As e-commerce volumes rise, air carriers and logistics service providers face increased levels of competition, highlighting the need for strategic differentiation and operational excellence. 

According to IATA, 80% of cross-border e-commerce is transported by air , with over 20 million parcels sent, on average, in a 24-hour period. With global e-commerce revenue projected to reach $4.7 trillion in 2028, the air cargo industry is anticipating mounting shipment volumes in 2024 and beyond. 

The growth of Chinese online shopping platforms such as Shein and Temu has markedly escalated the volume of small parcels moving by air. A closer look at China’s Singles Day on November 11, 2023, shows that the country’s e-commerce giants Alibaba and JD.com recorded year-on-year growth in the 24-hour online shopping period, while the worldwide air cargo industry managed to move 657 million packages worth $17.8 billion. 

As competition in China’s e-commerce landscape grows, it also intensifies among air freight providers and their logistics partners, such as freight forwarders and customs brokers. To secure coveted contracts with e-commerce platforms, companies must not only offer competitive pricing structures but also provide efficient and reliable shipping services aligned with heightened customer expectations. 

Air cargo stakeholders must adapt operationally to accommodate greater numbers of smaller shipments at increased frequency. With 46% of supply chain professionals citing shipment delays in customs as the leading challenge in cross-border e-commerce last year, one critical opportunity lies in streamlining customs clearance with the ability to process high volumes of Section 321 Type 86 filings. 

Introduced by U.S. Customs and Border Protection in 2019, this entry type eliminates duties and taxes for shipments valued at less than $800, imported by one person on one day. Plus, it expands the number of imports eligible for informal entry, including cosmetics, food items and other products. Many e-commerce shipments can be processed this way to simplify the entry and release process, expedite delivery, and increase visibility into e-commerce imports for government authorities. 

To boost clearance efficiency, freight forwarders and customs brokers require technology to automate and consolidate a high volume of transactions in a single filing. Solutions that can submit thousands of house bills on one master, automate rating, and enable automatic billing further streamline operations. The productivity stakes are high, as CBP estimates 85% of all shipments entering the U.S. are Type 86.

To improve air cargo visibility and mitigate the risks associated with lost or delayed shipments, the use of Bluetooth Low Energy provides air carriers and ground handling agents with cost-effective technology that’s approved for travel on aircraft.

Next-generation systems use Bluetooth tags affixed to unit load device (ULD) containers or pallets, mobile applications and mesh networks to automate the end-to-end tracking of assets and the shipments they hold. Tags communicate with readers in an internet-of-things-based network to provide real-time ULD location information and shipment-level condition data such as temperature, light, pressure, humidity and movement.

In addition, innovative solar-powered readers for outdoor ULD storage areas with no access to power are expanding network coverage areas, and new mobile apps provide anytime, anywhere access to data on the location and condition of air cargo shipments. 

Outlook: Continuous advances in technology, such as automated customs filing solutions and IoT-based shipment tracking and condition monitoring, foster an environment where efficiency is pivotal to meeting customers’ needs. 

Resource Link:

www.descartes.com