News / Don't get intoxicated by ecommerce's 'quick buck', air cargo players warned

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Senior air cargo executives have warned the industry not to become too ‘intoxicated’ by the ‘ecommerce  bubble’ – and to remember their original customers. 

Traditional shippers had begun to query high rates and lack of capacity, said Asok Kumar, head of global airfreight for DB Schenker – which estimates that about 2% of its airfreight volumes are ecommerce. 

Speaking at Tiaca’s Air Cargo Forum in Miami this week, Mr Kumar said: “We do have ecommerce customers, and we are supporting them in whatever way possible. The concern is over-exuberance …and, in terms of the capacity … obviously our bread-and-butter customers have severe concerns. 

“The tendency is to point to ecommerce and say, ‘oh, because you’re supporting ecommerce, that’s why you’re trying to increase rates’ – which is not necessarily the case. The long-term view is, we have fashion, we have electronics, we have AI, we have automotive; we have so many other industries which are supporting our growth. And we should just be very mindful of that and responsible. We’ve balanced our ecommerce volume with our other customers’ volume. 

“We obviously have priority lists and our top customers, and they get fully supported. They’re strong partners, but negotiations with them are never easy.  

“We all understand and appreciate ecommerce is here and will continue to grow. But the discussions we have with customers are very much focused around what they need, and protecting capacity for them which doesn’t disappear overnight for no reason. Certainly not because we stole it and gave it to ecommerce customers.  

“Ecommerce customers have their allocations, and we won’t take from others.” 

However, he added, much of the rest of the market was not growing: “Automotive is definitely suffering, but AI, that is absolutely growing bonkers.” 

Jan Krems, head of cargo for United, said the carrier didn’t have enough capacity for ecommerce and added: “We don’t want to deal that much with ecommerce, because we feel that the capacity we have is for our regular customers.” 

Finnair also said it preferred to keep its capacity for its traditional verticals. Anna-Maria Kirchner, head of global sales at Finnair Cargo, said on the sidelines of ACF that safety was the airline’s top priority, and that it had concerns over some ecommerce shipments. 

“Ecommerce is exciting, but we are one of the safest airlines in the world, so we are very selective. EU regulations are quite tight in terms of ecommerce, but they are not always being followed.” 

She added that, despite a strict scanning regime, “what if for some reason we don’t see that one battery which was not declared?”. 

“So this is not a key business area for us. However, ecommerce has elevated yields in Asia. So we work quite extensively on the general cargo side as well as verticals like pharmaceuticals and perishables, but a very big bulk of our business is general cargo.” 

Brandon Fried, head of the US Airforwarders Association, said his members didn’t want to lose customers “over some fly-by-night ecommerce company”. 

“I see what’s going on in the ecommerce business, and I know it’s very intoxicating for airlines to fall in love with it, because ecommerce is a quick buck.  

“But I always say ‘don’t forget who brought you to the dance’. 

“Shippers still want a personal touch. They still want you to be able to handle complex logistics challenges. And we want the room to be there on the planes.” 

To find out what else is being talked about at TIACA’s Air Cargo Forum in Miami this week, check out our bite-sized podcast