E-commerce to drive air cargo growth: IATA
Air cargo is already responsible for transporting 80% of cross-border e-commerce goods but this is rapidly increasing.
The airline industry recorded a 13.4 percent annual increase in cargo tonne kilometres (CTK) in the first half of 2024. "Boosted by a low 2023 base, strong e-commerce demand and global maritime shipping disruptions, air cargo saw record-breaking H1 performance despite rising trade tensions and policy uncertainty," says the International Air Transport Association (IATA) in its report titled Cargo Operations - 2025 Strategic Priorities Report.
International air cargo volumes increased by 15.6 percent year-on-year (YoY) compared to June 2023, supported by all world regions and major trade lanes, the report added. "Airlines registered in the Middle East and Asia Pacific expanded air cargo volumes by 18 YoY and 16.7% YoY, respectively. African and European carriers followed closely with 15.9 percent and 14.2 percent annual growth.
"The Americas lagged behind the other regions but recorded a 10.4 percent increase in Latin America and a 6.6% increase in North America."
E-commerce and need for speed
Following a Covid-induced surge where e-commerce grew by approximately 30 percent, the sector’s growth moderated but remains robust, expanding by 10-12 percent post-pandemic, the report added.
"Factors like geopolitical tensions, economic hurdles, inflation and currency instability have impacted consumer spending power but e-commerce has re-emerged as a cost-effective option.
"E-commerce sales are expected to reach $6.3 trillion by the end of 2024, and the sector relies heavily on air cargo for speed and network. Air cargo is already responsible for transporting 80 percent of cross-border e-commerce goods but this is rapidly increasing. One in five e-commerce packages are transported by air, reaching one in three by 2027. While 30 percent of consumers bought more in 2023, 79 percent have changed their shopping behaviour due to sustainability concerns."
The report adds that e-commerce players and logistics partners must respond to demands in a few clicks and harness capabilities like:
*Automation: Automating booking, tracking and documentation processes improves speed and transparency for e-commerce shipments.
Faster delivery networks: Develop more efficient and reliable air cargo routes, focusing on next-day and same-day delivery services.
*Increased capacity: Expand airfreight capabilities to meet growing e-commerce demand, leveraging dedicated freighters and considering the rise of multi-modal transportation.
*Last mile integration: Seamlessly connect air cargo with local delivery networks for faster last mile solutions; and
Sustainability: Adopt eco-friendly practices like fuel-efficient aircraft and carbon offset programmes to minimise the environmental impact of e-commerce shipping and packaging waste.
Sustainable cargo operations
The surge in e-commerce has dramatically increased packaging usage, highlighting the need for eco friendly materials and processes, the report added. "If current plastic production and waste management patterns continue, 12 billion metric tonnes of plastic will cover the globe by 2050. Air cargo firms urgently need solutions that encourage more sustainable packaging and shipping, meet consumer demands and address environmental challenges.
"Colombian freight carrier Avianca Cargo uses biodegradable plastics in its pallet covers, replacing conventional plastics. The company is using BioNatur Plastics, which are manufactured with an organic, food-safe proprietary additive that enables anaerobic bacteria to digest the plastic in a landfill site. This allows the product to degrade over eight to 12 years rather than the 1,000 years required of conventional plastics. Avianca has purchased over 1,000 boxes of biodegradable plastics to avoid the equivalent of 3.2 million plastic bottles ending up in landfills."
An IATA survey of air cargo stakeholders found that 75 percent of organisations have a strategy to reduce single use plastic products (SUPP), which suggests the industry is making efforts to comply with regulations and reduce plastic usage. "However, challenges like availability, cost and quality hinder this mission. The research finds that 35 percent of companies reuse single-use plastic, 26 percent use recycled plastic products and 11 percent use biodegradable plastic products. However, more than two-fifths of companies (42 percent) have adopted reusable alternatives to SUPP."
Air cargo and digitisation
Digital transformation is essential for meeting the growing demands of e-commerce logistics, including speed, efficiency and customer satisfaction. "Technologies like automation, AI and data analytics streamline operations, optimise inventory management and improve last mile delivery. Additionally, real-time tracking increases transparency, enabling businesses to scale, reduce costs and remain agile in a highly competitive market."
Regulatory compliance
IATA’s Preloading Advance Cargo Information (PLACI) guidelines provide standardised procedures for filing advance cargo information in a comprehensive manual. "PLACI enables companies to improve procedural efficiency and achieve compliance with regulatory requirements across key markets like the U.S., Canada, Europe, the UAE, and the U.K.
The PLACI manual covers international standards set out by the World Customs Organization SAFE Framework of Standards and furthers them with elements like transmission protocols, the update added. "As a result, PLACI helps air cargo companies align with regulatory requirements and avoid non-compliance issues with regulators and supply chain partners that could result in significant financial penalties and shipment delays."
