During and especially after the pandemic, cross-border e-commerce has reached unprecedented volumes. The impact on the industry is evident not only in terms of volume but also in data flow and management within the regulatory environment for such shipments. 

Customs procedures, as well as safety and security requirements, for this type of business, do differ from the general cargo procedures and demands. Similarly, the organisation and management logic of the entire supply chain differs significantly from standard cargo consolidation traffic. For example, the strict boundaries of the traditional shipper-forwarder-airline relationship are vanishing.

“First of all, we have investigated and analysed the market at a very early stage. Already in 2020, we have formally opened our Cross-border e-commerce Cargo Handling Center, enabling us to offer a fully customs-compliant, one-stop solution for e-commerce,” Carsten Hernig, Deputy General Manager, Vice President Sales and Marketing and Production at Shanghai Pudong International Airport Cargo Terminal (PACTL), said.

“From that point, we have worked closely with e-commerce shippers to develop and improve processes, IT interfaces and solutions. This collaboration has allowed our clients to seamlessly benefit from the speed and quality we can deliver.

“At the same time, we have worked intensively with the relevant authorities and other stakeholders to establish an operational and regulatory framework tailored to the specific requirements of e-commerce logistics.”

Rising volumes

The development of cross-border e-commerce from China is certainly a major contributor to the volume performance of the Chinese air cargo export market. It is increasing volumes at historically well-established cargo airports and driving the activities of new entrants into the market. 

The main drivers of the development out of China are well-known market leaders. Each of these companies ships quantities that are comparable to the annual cargo production of many airports, significantly impacting the air cargo market.

Seasonality certainly affects e-commerce, as it does with any business. However – as in many other aspects – e-commerce does not seem to fully follow the classical patterns. Factors such as promotional events like Black Friday, changes in consumer behaviour, and global economic shifts contribute to these variations. 

“As far as PACTL is concerned, we experience e-commerce majorly as an export driver. The demand of overseas e-commerce shoppers is increasing our volumes, largely channelled through the four major cross-border platforms in China,” Hernig explained. 

“In return, there is also an inbound e-commerce market, but it is by far not achieving these volumes and is following different patterns. However, certain rather high value products are being imported into China in order to be sold in domestic e-commerce channels.

“Overall, the Asian markets – and China in particular – play a key role in the global e-commerce. Europe and North America are also essential markets, receiving a significant portion of goods sold from China. Last but not least, there are markets which are still at a relatively low level of penetration but show double-digit growth rates in e-commerce volumes – South America would be an example.”

Future trends

At present, the growth of the e-commerce sector appears to be ongoing, but markets do reach ceilings. In addition, factors such as regulatory changes, consumer sustainability concerns, and economic conditions could influence this trend. However, given the fact that the commerce model can be replicated in new markets, where potential demand is still rather unsatisfied, PACTL believes there will still be a stable upward development for quite some time – although it may shift geographically.

“Nobody has a Christal ball, but current volume growth rates, according to the customers, are in the range of 20-30 percent year-on-year. I feel – even in a conservative guess – there is still significant growth ahead of us,” Hernig highlighted.

“We are closely monitoring developments and assessing their potential influence on e-commerce trends across Asia. PACTL is committed to maintaining a flexible strategy, ready to adapt to any changes in the marketplace.”

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