E-commerce is bringing new opportunities to air cargo, both domestic and international, says Milind Tavshikar, chief executive officer of SmartKargo.

Air cargo has been a source of revenue for airlines as long as there have been passenger services. But the product has traditionally been supported by paper-based processes, which might have been sufficient for business-to-business shipments of pallets and containers, but doesn’t work in the world of e-commerce, which is characterized by individual packages moving directly to the consumer. 

The emergence of e-commerce as a new source of revenue has awakened airlines and freight forwarders to the need for digitizing manual processes, especially with the surge of consumer orders caused by the COVID-19 pandemic, Tavshikar says. They’ve made some progress — “it’s already a good start” — but the airline industry has a ways to go before achieving complete digitization.

“E-commerce is a completely newfound revenue stream for airlines, if they can target it,” Tavshikar says. Amazon.com, for one, has shown the way with its Prime Air option, and with consumers getting accustomed to receiving their orders with one to two days. “If you really are focused on speed,” he says, “you cannot beat an airplane. Airlines have no option other than to digitize.”

The biggest opportunity for the moment is domestic movements, spurred by internet sales. Those products move in the bellies of narrow-body planes — “a perfect use case for small parcel,” Tavshikar says.

There’s also money to be made in international shipments, which can take advantage of the copious space within widebody aircraft. E-commerce orders eliminate the need for staging of product from overseas; instead, they move directly from fulfillment centers to buyers in the U.S. or elsewhere. “That journey was never part of air cargo in the past,” Tavshikar says. “Today, it is.”