News / Ecommerce will continue to drive air cargo growth in 2025, says Delta Cargo chief

02/01/2025

Ecommerce will remain the key driver of air cargo growth this year, as it was in 2024, according to a senior industry executive.

In a STAT Times Cargo Masterminds podcast at the end of December, Peter Penseel, SVP at Delta Air Lines and president of Delta Cargo, underlined that despite “the economic and political challenges around the world, the market was very strong and very resilient, and I see this continuing in 2025”.

He added that ecommerce was having “a huge impact on demand for air cargo capacity”, with no let up expected”.

Mr Penseel took up his post on 1 June last year and had previously been chief operating officer, airfreight, at CMA CGM-owned Ceva Logistics. His career has also included spells at Qatar Airways Cargo, DHL Global Forwarding and UTi Worldwide.

“The knowledge I gained in the years I worked for a freight forwarder is helping me now I’m with an airline, and I feel I know ‘both sides of the table’ pretty well,” he said.

In October, Delta reportedcargo revenue for Q3 24 of $196m, on “international volume strength”, an increase of 27% on Q3 23, and Mr Penseel noted that ecommerce was taking up a significant part of the Atlanta-based carrier’s cargo capacity.

“Delta does not operate freighters. but we can offer customers the bellycargo capacity of a global network. Such an offering represents huge added value for a lot of players in the market because it’s fixed capacity in a scheduled environment.”

Asked whether it was a challenge to optimise ecommerce cargo, given that it is generally perceived as being a low-yield vertical, Mr Penseel replied: “Air cargo pricing and yields are always a topic of discussion, but seeing the volume and consistency of ecommerce traffic, I think you have to be very careful in making statements like low-yield, especially in a market where demand is strong and capacity tight.

“Ecommerce has become such a huge component of the air cargo market that I don’t think you can say that it is always low-yield and doesn’t make [commercial] sense. You do it or you don’t. It all depends on your business model.”

Peter Penseel

Early-2024, Delta Cargo made a move into the US domestic ecommerce market, launching DeliverDirect, a door-to-door service, powered by technology platform SmartKargo. Almost a year on, Mr Penseel describes it as “a booming business”, adding: “Airlines normally offer airport-to-airport, but we believed that with a partner such as SmartKargo we could become a carrier that can deliver a door-to-door product.

“What we see in the numbers and the growth over the last months is that we have tapped into a strong need in the market. And we’ll keep investing in the service, because we believe strong growth will continue in the coming years.”

Returning to the outlook for 2025, despite the tense geo-political environment, Mr Penseel sounded upbeat. He said: “In recent years, we have had to contend with the impact of Covid, the Russia-Ukraine war, disruption to ocean shipping in the Red Sea and conflict in the Middle East. The new year will see the inauguration of a new president in the US and there is speculation of a tougher stance on trade tariffs, but we don’t know exactly what will happen.

“As an industry, we are used to change, the challenge is to manage it properly.”

And Mr Penseel again pointed to ecommerce as the growth driver, keeping demand for capacity strong, and added: “I am very positive for the market. Rate levels are at a healthy level, allowing us to keep investing in new technology.”