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How E-commerce Growth is Affecting Air Cargo

May 18, 2018

 

Technology evolves at an expeditious rate, turning over every 19 months. This digitalization insurgency has single handedly transformed the retail industry. Consumer expectations, buying patterns, buying rates, and frequencies have all increased rapidly – with no signs of slowing. E-commerce has taken over the global online shopping economy, influencing all marketing and selling aspects including: business to consumer, consumer to consumer, and even business to business. The traditional world of retail is even turning to technology to enhance their shopping experience. Consumers in stores are prompted more often to use their digital devices. They can now physically stand in the shop while virtually trying on clothes, customizing products, buying goods that are out of stock or sold online only, and even scanning labels to check current availability.

 

This rapid expansion in e-commerce is an opportunity worth noting. The e-commerce sales forecast for next year (2019) is expected to gross $3,500,000,000,000 USD. That is 3.5 trillion, with a “T”. Over the last 13 years, retail sales on the world wide web have exceeded 20% in growth each year – exponentially faster than traditional brick and mortar stores. While these numbers are impressive, they only account for roughly 8.7% of total retail sales on a global level – putting into perspective just how great the future growth of e-commerce could be.

 

Online shopping increases parcel delivery services demand on an international scale with absolute certainty, thus directly correlating e-commerce with the air cargo industry. Over the last 10 years, air freight parcel volume doubled – increasing much faster than overall economic growth.

 

The online marketplace has birthed a transparency that was never offered before with traditional retail stores. Now consumers are privy to inventory status, delivery dates, various shipping options, tracking functions, and even returns. Logistics providers now need consistent, reliable, low-cost solutions. This causes air freight specialists to adjust and develop services that cater to their e-commerce customers. Considerations include: end-to-end tracking with instant notification, high priority shipments, and overall low costs.

 

Retailers and manufactures supply chain and logistical management needs have unavoidably been affected due to the substantial development of e-commerce. Directly corresponding to this development is the need to reach customers quickly, visibly, and efficiently. How will the air cargo industry respond? The industry wide action plan, according to IATA, is as follows:

  • Increase security for all types of air cargo / air freight / airmail

  • Introduce best practices / speed transaction time / simplify the method

  • Implement new technologies for better transparency and efficiency

  • Partner with e-commerce leaders to teach air freight safety procedures

  • Establish new business models

  • Promote all encompassing industry harmonization

Shipping and forwarding items can get expensive. Add to that a complicated supply chain with logistics and reverse logistics management and you have an actual nightmare for most logistics providers. E-commerce can be a logistical challenge for those who are not adept in the new patterns and emerging trends regarding all technological advances. Providers need to understand products and service level agreements, forecast volumes, and comprehend e-commerce network reach.  CLN Worldwide aims to stay ahead of the curve and capitalize on this e-commerce boom by fully optimizing the journey (beginning to end) and offering real-time interaction.

 

For more information on how to efficiently improve and optimize your online supply chain, email management@clnusa.com

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