Rising e-commerce drives up demand for air cargo freight

A plane delivering cargo at an airport. PHOTO | FOTOSEARCH

What you need to know:

  • Analysts also say air cargo globally is growing faster than other modes of cargo transportation thanks mainly to the growth of e-commerce.

Air cargo transportation globally increased in the last quarter, due to increasing load factors and stable demand for air cargo from consumers, importers and exporters, according to a survey by the International Air Transport Association the International Air Transport Association (IATA).

Analysts also say air cargo globally is growing faster than other modes of cargo transportation thanks mainly to the growth of e-commerce.

The report released this month surveyed global chief executive officers and heads of cargo in different airports and airlines. It also looked at the confidence in air cargo transportation globally.

According to the study, 58 per cent of respondents reported a rise in air freight volumes in quarter three compared with a year ago – down seven per cent from the previous survey in July. However, it was still well above the average over the past five years at 51 per cent.

“Of those surveyed, 63 per cent of respondents expect further increases in input costs over the year ahead. At the same time, a majority of respondents (56 per cent) expect to see higher yields – for both passenger and cargo segments – over the same period. The demand is expected to remain relatively robust; almost 60 per cent of respondents expect higher passenger demand over the next 12 months, while 52 per cent expect air cargo volumes to increase over the coming year,” reported IATA.

During the high season, October to May, there is an increase in air cargo transport with consumers purchasing products from different online retailers influenced by discounts and special deals.

The air cargo transportation is expected to keep the momentum due to significant consumer holidays such as Thanksgiving and Christmas as well as Black Friday, one the largest shopping events.

Global data from IAG cargo, the freight handling division of International Airlines Group, shows that during Black Friday, electronics and fashion goods are quite popular with millennial shoppers driving up air freight. While Thanksgiving and Christmas lead to an increase in the transportation of ingredients used in the preparation of meals.

“In 2017, in the run-up to Black Friday, we transported more iPhones and accessories from Hong Kong to the UK than ever before. Towards Thanksgiving we experienced a rise in the shipments of dried oranges from Cape Town, South Africa to Los Angeles, US and other dried fruits shipments from other African countries that go through our London hub and onto multiple destinations across the US,” reported IAG Cargo.

It is also during this period that airlines operating in Kenya increase their flights in order to meet the demand for exports for the high season from October to May. Cut flowers to the Netherlands are especially popular due to the holidays.

For instance, Turkish Airlines scheduled additional 12 freight flights during this period between 26 January and 12 February 2018. It was carrying 906 tonnes of cut roses from Kenya to the Netherlands for Valentine’s Day, according to a study released in August 2018 on airfreight in Kenya by the Netherlands Enterprise Agency.

It also found that one of the main carriers reported load factors of about 95 per cent during the October-May period and 90 per cent during the low season from June to September.

The researchers interviewed over 20 stakeholders in the Kenyan industry including freight forwarders, airlines and airport personnel, growers, importers, government institutions as well as other industry influencers.

“Airlines plan to increase capacity again at the start of the high season but flower traders are afraid that airlines may deploy their aircraft on more profitable routes, depending on commercial factors. One of the interviewed importers told us that during the high season they were confronted with surcharges in case of extra shipments on top of standard volumes,” reported the Netherlands Enterprise Agency.

- African Laughter

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