Rise of e-commerce prompts change in traditional airfreight offering

As global manufacturing output increases and with the retail peak season set to come early this year, the ongoing airfreight capacity crunch will prompt even more investment in new fleets and additional services by e-commerce platforms and express air services. But will Africa be part of this trend? If global media sources, such as Bloomberg News, are to be believed then Ethiopian Airlines is set to become the first African airline to set up an alliance with express parcels and logistics giant, DHL. While the Ethiopian Airline story remains officially unconfirmed, industry insiders told FTW that joint ventures such as these would be a “strong possibility” as population growth, urbanisation and the rising demand for the transport of goods would continue to drive demand for air transport to, from and within Africa. “Consolidation among operators and service providers makes sense as it is often beyond the ability of a single small player to achieve the economies of scale that are required to serve the expanding market,” said Linden Birns, MD of Plane Talking. He told FTW that e-commerce platforms had made it easier and more accessible for more African producers and manufacturers to participate in the global economy and access global markets. This rise of e-commerce in Africa would create additional demand for flights, he added. However, while some industry insiders say a merger between a carrier and a logistics company in Africa could be a game changer, a freight forwarder specialising in airfreight (who wished to remain anonymous) told FTW that the increased demand in Africa for pharmaceuticals and e-commerce was not yet consistent enough to drive a massive change towards this global trend. “For example, if the big freighters were deployed from Europe there would not be enough return goods from Africa to make the flight viable and cost effective.” He said that to beat the capacity crunch, and still meet client demands, freight forwarders should rather seek service providers offering a multimodal approach. “I do know this is a challenge on many African routes though as the infrastructure is not always conducive to multi-modal transport,” he added. Stuart Lund, vice president of Global Air Freight, UPS Global Freight Forwarding, agreed, pointing out that ongoing global growth in e-commerce had prompted third party logistics service providers to offer more multi-modal services. “For example, UPS Trade Direct it is an alternative offering that sees the consolidation of multiple smaller global shipments into a consolidated airfreight shipment and, once it reaches its destination, it is then broken down and distributed through the company’s small-package network,” he explained.