The logistics industry is undergoing significant changes, with trade flows shifting and the structure of e-commerce evolving. However, air cargo is still well-positioned to play a vital role.
In the US market, Laredo on the US-Mexico border has surpassed the Port of Los Angeles as the biggest gateway for imports for the eighth consecutive month. This reflects the growing importance of Mexico as a source of US imports, as well as the trend of companies setting up production plants in Mexico to be closer to the US market.
While this means that transpacific container trade and airfreight flows may not grow as quickly as they have in the past, they will still play an important role in the global economy.
Geopolitical risk and the potential fragmentation of global trade are also influencing business decisions. Companies are increasingly concerned about the impact of extreme weather events on their supply chains. For example, a recent study found that extreme heat and flooding could wipe out $65bn in apparel export earnings from four Asian countries by 2030. This is leading fashion firms to move production to Latin American countries.
E-commerce players have also moved closer to consumers, with Amazon building fulfillment centers close to major markets and cutting back on its freighter fleet. However, this does not mean that airfreight and e-commerce are on divergent paths.
In fact, airfreight is essential for e-commerce retailers that need to offer fast and reliable delivery. For example, Amazon would not be able to offer same- or next-day delivery without airfreight.
Airfreight is also well-positioned to benefit from the increasing trend of companies moving to demand-based manufacturing and procurement. This is because airfreight allows companies to quickly and efficiently react to changes in market demand.
Of course, the shifting logistics landscape also presents challenges for the air cargo industry. Companies need to be nimble and adaptable in order to succeed in this volatile environment.
Overall, the outlook for air cargo is positive. Airfreight is well-positioned to play a vital role in the evolving logistics landscape, thanks to its speed, reliability, and efficiency.
- Air cargo is still important, even as trade flows shift and e-commerce evolves.
- Mexico is becoming a more important source of US imports, and companies are setting up production plants there to be closer to the US market.
- Geopolitical risk and the potential fragmentation of global trade are also influencing business decisions.
- E-commerce players have moved closer to consumers, but they still need airfreight to offer fast and reliable delivery.
- The shifting logistics landscape presents challenges for the air cargo industry, but companies that are nimble and adaptable will succeed.