Shopping cart icon with lines pointing on different places around the globe, online shopping concept

Cross-border e-Commerce Looks to Drive Logistics and Air Freight Growth

The spread of e-Commerce has been like a wildfire. The heat from which has pushed changes into every business around the world. The transportation industry is no exception where all the players are fast adjusting themselves to accommodate this growing trend.

e-Commerce business is undeniably one of the major dynamos energizing global economic growth at the moment. All parties including Business to Consumers (B2C), Business to Business (B2B), and Consumer to Consumer (C2C) activities are benefiting from the momentum e-Commerce is offering.

The Rise of Cross-border e-Commerce
It was estimated that online commerce will hit the US$3.5 billion mark in 2019, and cross-border e-Commerce is one of the sky-rocketing segments. Cross-border e-Commerce includes the trade transactions between buyers and sellers in different countries. Air transportation is playing an important role in serving the sector with its fast-paced service regardless of the distance. Cargo can be shipped within days or hours, depending on the buyer’s preference. Such contribution is in line with the nature of e-Commerce, where order volumes are small, and buyers are anxious to receive their goods.

The rapid increase in the needs for small, but speedy packages transportation is resulting in a sharp increment in demand for air transportation, especially for cargo space underneath the passenger plane (belly space). It is a necessity that each segment of transport and logistics industry are prepared for such growing opportunities.

Automated Logistics
The variety of new channels for goods to reach consumers is driving the manufacturing industry to expand their production and along with that comes an increasing need for logistics services. Cargo packaging, repackaging, inventory stocking and transportation, are all service that look to be increasing in need. Many businesses are seeking technologies to help fill in the efficiency gaps. For example, warehouse and inventory management software, automatic replenishment systems, automatic conveyor systems, automatic storage/retrieval systems, or even a complete AI automated system to help to improve overall operations.

Increasing Visibility
On top of the improved efficiency both in terms of speed and the integrity of transport, the emergence of cross-border e-Commerce has hastened the maturity of real-time cargo tracking solutions.

High-value goods are becoming more common in online commerce, and include items such as precious stones, jewelry, consumer electronics and luxury fashion brands which are sometimes ordered and shipped across countries or even continents. It is common for customers and sellers to want to know the whereabouts of their high-priced purchases. While on the seller side, their creditability is very important for customers they may have never met in person. This is where end-to-end real-time tracking capabilities can help to fill in the gaps between the two parties.

Transport providers are seizing the opportunity and are developing and adopting cutting edge tracing solutions to accommodate the needs of the industry.

Shaping Warehouse Solutions
For an online business, stock management, inventory, and replenishment are critical to keeping their sales going. As the sales volume increases, a faster and more efficient solution for inventory management is essential, especially for e-Retailers of small and medium size. Without their own warehouse and inventory storages, an automatic replenishment service provider can be a savior for them.

The current trend of the multi-client warehouses where different producers or suppliers, sometimes even rival companies, share the same warehouse facility operated by another private party is becoming much more common. Major businesses along with expanding startups are benefiting from such warehousing services. These services liberate clients from investing into their own warehouse or long-term leases.

Additional services are also available, such as last-mile deliveries, cargo replenishment, packaging and re-packaging, labelling and barcoding, quality control and much more. e-Commerce businesses, both domestic and international, can also gain ground faster by establishing a local hub or distribution center using these warehousing solutions. This also enables faster delivery times which is a critical aspect for online commerce.

Rising Air Freight Demand
An increasing demand for the shipment of e-Commerce goods in growing markets such as China and Asia Pacific have the speed of technology and adoption in consumers partly to thank for their flourishing economies. Changing consumption value patterns are part of the growing bourgeoisie’ population that is pushing consumers to reach out for goods that are not available locally. The ease of access to the internet has also led many to find out that there are cheaper and better-quality products available for in the foreign marketplaces. These are just part of the reason behind the increasing demand for air cargo shipments. The trend is reflected in the increase in transportation space being contracted out to leading express carriers and even some leading online platform providers that are chartering their own aircraft to carry out their deliveries.

Amidst the ever-growing online trade across the globe, arguments are being made in some countries about customs laws are regulations. Issues such as quality control and products integrity, cross-country financial transactions, import and export duties, requirements to have a local label on the products and other import barriers can bog down the progress of cross-border e-Commerce expansion, although the overall picture is positive and healthy to the transportation industry.

The growth of e-Commerce both domestic and internationally is pushing the service providers in air transportation and logistics to adapt to the new paradigm. Service quality and solutions are being adjusted and modernized in accordance with the changing needs of customers. For the rapidly growing cross-border e-Commerce market, a variety of innovative services are being developed to meet needs that in the end are beneficial to e-Commerce businesses, end customers and the transport and logistics industry as a whole.

For breaking news sent to your LINE application, click on the button below to add us on LINE at @airfreight (also include the ‘@’ symbol)