The Nippon Cargo Airlines Boeing 747-8F is playing a crucial role in meeting the increasing demand for capacity growth on the transpacific trade lane to accommodate the recent surge in e-commerce volumes. The peak season for airlines, which initially seemed tepid in October, was saved by an unexpected surge in demand in November and December.
Shawn McWhorter, president for the Americas at Nippon Cargo Airlines (NCA), noted that the peak season, especially from Asia to the US, was robust due to the rapid growth in e-commerce flows out of China, led by companies like Temu and Shein. This growth in e-commerce demand helped to exceed yield levels seen in 2019.
Other factors contributing to the upturn in traffic included special cargoes like pharmaceuticals. Cathay, for example, focused on refining services for project cargo, dangerous goods, and the courier segment to meet the demand in these sectors. The growth in e-commerce and traditional B2C traffic, particularly in high-tech and automotive sectors, was significant, as well as the launch of new products by brands and the return to ordering products by firms.
Another trend affecting airfreight developments across the Pacific is the rise of Mexico driven by nearshoring. Chinese manufacturers setting up production facilities in Mexico to maintain access to the North American market contributed to this trend. Airlines like NCA and Air Canada Cargo saw good demand between Mexico and Asia, with plans to expand their reach in the region.
E-commerce continues to be a major factor in shaping airfreight developments, with growth in e-commerce flows from Asia to Latin America observed. Connectivity between Asia and Latin America remains attractive for airlines, with China Cargo launching new flights to Miami, connecting through Los Angeles.
Challenges arising from the increase in e-commerce volumes include changes in the ground handling at destination airports, where individual shipments are sent directly to consumers from China, bypassing distribution centers in North America. Proper planning is essential to avoid warehouse congestion.
To address these challenges, companies like SEKO Logistics have adapted their strategies to track shipments at the parcel level and invested in building pallets and consolidations to streamline processes. Long-term partnerships and scheduled charters are also being explored to secure capacity and efficiency in airfreight operations.
The availability of belly capacity, especially in the transpacific arena, is critical for cost-sensitive e-commerce shipments. While capacity on the North Atlantic has seen significant growth, capacity on the North America-China sector has remained low. Airlines are working to restore and increase capacity to meet demand, with Cathay aiming to bring capacity back to pre-pandemic levels by the end of the year.
Overall, the outlook for airfreight remains positive, driven by the growth in e-commerce volumes, special cargoes, and nearshoring trends. Airlines are adapting their strategies to meet the evolving demands of the market and capitalize on new opportunities for growth in the air cargo industry.
