News Content

E-commerce drives cross-border trade - air cargo had better catch up

THE air cargo industry is being urged to make greater use of technology in the digital era, using e-commerce to propel business growth.

This would aid and development, improve communication with clients and partners and tap into the growing cross-border trade the way Alibaba has done.

One third of the US$3 trillion global e-commerce market is cross-border trade, which is growing faster than domestic sales, says Alibaba's director of logistics partnerships Steven Li.

"This will drive demand for air freight, but at the same time e-commerce requires the air cargo industry to make changes," Mr Li told the Cargo Facts Asia conference in Hong Kong.

"Sellers and buyers need quick response times, flexible services, complete visibility from pick up to delivery.

Air freight companies need to integrate more with other logistics companies, market places and transactions. IT capabilities will be very important in the future."

Mr Li explained that Alibaba marketplaces were experiencing bottlenecks with air freight, due to restrictions on products with batteries, liquids and powders.

"So I don't know if you have any solutions on this, because the volumes are huge. And with these restrictions a lot of the time we have to switch to sea freight," he said.

FedEx executive vice-president Raj Subramaniam said e-commerce was driving significant change in the air cargo status-quo, from shipment sizes to customer profiles.

"The customer definition is changing. You now have micro-multinationals, or even individual sellers, looking at the marketplace on a global basis. And instead of just shippers we now have to worry more about the recipient," said Mr Subramaniam.

Co-founder of Strategic Aviation Solutions International, Stan Wraight said: "We're seeing the stagnation in general cargo, and the rapid decline in consolidations and their viability for freight forwarders and scheduled airlines. On the other hand, everything to do with post and express is growing at double and triple digits."

Said Cathay Pacific's Cargo chief Mark Sutch: "We already do a lot of consolidation for e-commerce companies on behalf of the integrators. So we're in it. But for us it's really how we can be efficient as possible for those doing the end-to-end, door-to-door, last-mile stuff ?we're not going to get involved in that final-mile game."