“Airlines are shifting freighter capacity from corridors such as the Transatlantic, which is not used for ecommerce shipping, in favor of routes out of Asia where there is massive ecommerce demand growth,” Zhang says, noting that even businesses shipping non-ecommerce goods may still feel the impact of these massive volume increases. “These shippers will try to identify new supply chain routes out of Asia that avoid major ecommerce hubs such as Hong Kong and Guangdong,” Zhang explains. Airfreight demands can rise sharply for a host of reasons, leading to shifts in how shippers use air routes. For instance, Dimerco increased airfreight capacity on existing routes in response to rising demand caused by the three- day East Coast ports strike in October 2024. The company partnered with Cathay Cargo to charter a weekly flight from Shanghai to Chicago with last- mile truck delivery to a variety of East Coast destinations. Other recent examples of carriers rising to meet capacity demand include One Air, a new British all-cargo airline that added a third 747-400 aircraft in 2024 and expects to add a fourth in 2025 for transporting freight largely between China/Hong Kong and Europe. Another factor impacting air routes is fierce competition among Chinese
Top: Airports like Chicago O’Hare are expanding cargo facilities to accommodate additional volume. Right: British all-cargo airline One Air is rising to meet increased demand between China and Europe by adding a third aircraft in 2024.
companies for airfreight capacity at key hubs such as Shanghai and Hong Kong—especially for shipments to the United States and Europe. As a result, some shippers are turning to sea-air services like Dimerco’s route from Xiamen to Taipei, followed by air freight to the United States and Europe. “Our sea-air service allows shippers to bypass the heavy competition at Chinese hubs and leverage Taiwan’s capacity allocation for long-haul shipments,” Liu explains. Although the ecommerce boom has led
to growing air cargo demand, Liu notes that it hasn’t spurred the development of new air cargo routes. The focus is still on major hubs like Los Angeles, New York, and Chicago. INFRASTRUCTURE FOCUSES ON LOGISTICS To accommodate rising demand for air freight, several major U.S. infrastructure projects are focused on expanding capacity and enhancing overall operations, particularly at key cargo airports. These upgrades aim to streamline logistics and support growing shipment volumes. In late August 2024, Chicago’s O’Hare International Airport—the top cargo airport in the United States by trade value, processing more than 1.9 million tons of freight in 2023—celebrated the completion of its Northeast Cargo campus. It was designed to improve the airport’s cargo capacity and strengthen its standing as a global shipping hub. The final phase of the Northeast Cargo campus opened for cargo operations in 2023. The project added 130,000 square feet and two aircraft parking positions to the existing cargo area. The first two phases of the project
Belly Dance: The Passenger Travel Impact
Passenger travel plays a major role in the air cargo landscape. “Demand for air passenger travel significantly impacts the airfreight market, directly affecting the availability, cost, and overall capacity of airfreight services,” explains Brendan Sullivan, head of cargo for the International Air Transport Association (IATA). “High passenger demand generally results in more belly cargo space and competitive freight pricing, while low passenger demand limits capacity, increases freight costs, and shifts reliance to dedicated cargo planes. “As passenger demand rises, flight frequency increases, reducing the per-unit cost of transporting cargo and increasing the cost-effectiveness of belly-cargo air freight,” he adds. What’s the current status? The share of air cargo demand served by the belly-hold of passenger aircraft was 44% industry-wide in July 2024, according to IATA.
44 Inbound Logistics • November 2024
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