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Warning on Xmas shipments, airfreight capacity crunch push e-commerce to sea

FLORIDA-BASED parcel delivery network for Latin America SkyPostal has sounded an alarm for disappointments at Christmas

17 September 2020 - 19:00

FLORIDA-BASED parcel delivery network for Latin America SkyPostal has sounded an alarm for disappointments at Christmas. It warned e-commerce merchants to ship early for the Christmas season to avoid delays.

SkyPostal chief executive and president A J Hernandez is worried about airfreight capacity bottlenecks. He expressed concern over the gap between available air cargo capacity and demand; whereas global e-commerce volume is forecast to expand 33 per cent this year over 2019, global air traffic was down 42 per cent in June, he pointed out.



And worries about capacity and prices are not limited to Latin America. The transpacific arena is also struggling. According to IATA, belly capacity is down massively, and freighters are pretty much maxed out in this sector, with utilisation at record levels.



This has propelled airfreight rates in the sector to lofty heights, beyond the reach of e-commerce shippers, reports UK's The Loadstar.



This has pushed a large chunk of e-commerce from Asia to ocean transport. According to ocean carriers, forwarders that are active in e-commerce flows have shifted large chunks of this traffic to them. One container line moves more than 2,000 TEU of e-commerce a week from southern China to the US west coast.



Particularly attractive for e-commerce has been expedited ocean services, which have proliferated in recent months. In general, for e-commerce shippers, these services offer an attractive alternative to airfreight. According to one observer, they are about 75 per cent cheaper than transpacific air cargo rates.



But seafreight pricing seems poised for further rate increases, given rising expectations of strong demand in the coming weeks, due to the re-stocking of US retailers in preparation for the peak shopping season. On the other hand, airfreight pricing is also expected to keep climbing.


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