The air cargo sector must learn to “embrace volatility,” according to industry analysts who spoke at the World Cargo Summit in Ostend on January 28. Experts highlighted both the strong tailwinds driving growth and the significant headwinds threatening disruption.
Ludwig Hausmann, senior partner at consulting firm McKinsey & Co, underscored the industry’s rapid expansion, citing a 12% growth rate last year alongside constrained capacity. This perspective was echoed by Rogier Blocq, director of product development at data firm WorldACD, who noted that capacity is gradually catching up with demand.
Despite these positive trends, the industry faces considerable challenges, particularly from regulatory shifts in the United States. Protectionist policies, especially those affecting e-commerce, were a central concern at the summit. Hausmann also pointed to the slow pace of innovation and the adoption of environmental and social goals as potential sources of future disruption, urging industry leaders to take proactive measures.
A key source of concern is the U.S. administration’s evolving approach to trade. A recent dispute with Colombia illustrated the potential impact of protectionist strategies. President Donald Trump’s threat of a 25% tariff hike pressured the South American country into accepting deportees, setting a precedent that some fear could destabilize the rule-based trade system.
“It creates uncertainty because no one knows exactly what, who, or when new tariffs might be imposed,” one summit attendee remarked. Marco Bloemen, managing director at aviation data consultancy Aevean, warned that tariffs could range from 10% to as high as 60%, significantly affecting global trade flows.
Another looming issue is the potential revision of America’s de minimis rules, which currently exempt imports valued under $800 from taxation. “The Trump administration might alter this threshold, creating further unpredictability,” Hausmann cautioned.
New compliance challenges are also on the horizon. Glyn Hughes, director general of The International Air Cargo Association (TIACA), referenced a January 17 announcement by U.S. Customs and Border Protection (CBP) regarding proposed changes to low-value shipment exemptions. The new regulations aim to protect intellectual property rights, enhance consumer safety, and prevent unfair trade practices. However, the increased administrative requirements could complicate supply chain operations for the more than 1.4 billion packages expected to enter the U.S. this year.
Despite these challenges, some experts remain optimistic. Nikolia Schaffner, Swissport’s vice president for e-commerce, noted that the average value of an e-commerce package is between $15 and $18, making a potential 20% tax manageable for consumers. Furthermore, Schaffner argued that the U.S. government’s focus is likely to remain on reshoring industries such as automobile and microchip manufacturing, rather than targeting e-commerce directly.
While uncertainties persist, industry leaders expressed confidence in the sector’s ability to adapt. “There will be logistics challenges, but we are well-positioned for growth,” said Wilson Kwong, chief executive of Hong Kong Air Cargo Terminals Limited.
Speaking on Chinese New Year’s Eve, Kwong referenced the agility of the Snake, the year’s zodiac symbol, suggesting that both businesses and individuals must embrace flexibility in the months ahead.
However, some believe major policy shifts may never materialize. “A lot would need to happen for the U.S. government to push these changes through Congress,” noted Craig Strickland, chief sales officer at BoxC, an international e-commerce management firm.
The choice of Ostend for the summit raised some eyebrows, given its lesser-known status in the air cargo industry. However, Eric Dumas, CEO of Ostend-Bruges Airport, emphasized the strategic advantages of the Belgian coastal hub. With an airport located just 2 km from the town center, Ostend aims to position itself as a key transit point for goods entering the UK via the Channel Tunnel.
“Our focus is not on competing through size but on agility and efficiency,” Dumas explained. “With our first warehouse now open and available for rent, we are preparing to launch the Ostend Cargo Community.”
As the industry navigates an unpredictable future, adaptability and strategic planning will be crucial for continued success.
Source: aircargonews.net