ASTANA — The International Air Transport Association (IATA) has emphasized the urgent need for a special handling code for e-commerce freight due to sustained volume growth and its increasing dominance in global air cargo markets over the past 18 months.
Currently, over 80% of all e-commerce is transported by air as general cargo. However, Andre Majeres, head of e-commerce and cargo operations at IATA, highlighted at the International Air Cargo Association (Tiaca) conference in Astana the lack of insight into the contents of these packages.
“With the rise in volume and the high demand for electronics, many lithium batteries are transported by air,” Majeres stated. “Have you ever considered what might be beneath the seats of the aircraft you’re on?”
The scale of the e-commerce market is immense, with no signs of slowing. IATA data projects global retail sales to hit $6.3 trillion this year, a 10% increase from last year, and reach $8 trillion by 2027.
Cross-border parcel volumes have also surged, with 170 billion parcels transported in 2022, a number expected to grow by 50% by 2027.
While airlines welcome the business growth, the inability to identify the exact nature of the cargo is concerning. Michael Clements, senior director at Atlas Air, noted at the Tiaca conference that the lack of transparency poses challenges. “All of our customer base is involved in e-commerce, but we have no way to judge what is e-commerce unless it’s on a direct flight chartered by an e-commerce company.”
China’s e-commerce platforms, led by Shein and Temu, are dominating air cargo capacity from China to meet high demand from North America and Europe. This volume has kept trans-Pacific and Asia-Europe air cargo rates elevated. In June, the average air cargo rate from Shanghai to Europe was $4.33 per kilogram, a 53% increase from the previous year, while rates to North America were $5.61, a 30% rise, according to the Baltic Air Index (BAI).
These platforms are leveraging the generous “de minimis” rules in the US, which allow the import of packages worth $800 or less without formal customs entry or paying duties. However, this rule has come under increased scrutiny due to its extensive use by Chinese e-commerce giants.
In May, US Customs and Border Protection (CBP) suspended access for several customs brokers to its Type 86 program, which facilitates low-value import shipments like e-commerce.
Nikolai Schaffner, global director of e-commerce at Swissport International, stated that online orders now comprise about 20% of global air freight volume. “E-commerce deserves its own platform as the cargo often has specific needs that a special code can help classify,” he said.
Glyn Hughes, director-general of Tiaca, concurred, suggesting that a special handling code for e-commerce would streamline cargo handling, similar to categories like human remains, live animals, perishables, or valuables. “E-commerce involves goods that have already been bought, so there’s an expectation for rapid, transparent, and traceable movement through the air cargo system,” Hughes explained.
While air cargo and logistics providers support a separate code for e-commerce, Majeres noted that online shopping platforms are less enthusiastic. At IATA’s World Cargo Symposium in Hong Kong, 70% of attendees favored the idea, but e-tailers fear it could lead to higher handling costs.
“We have a dual view where everyone wants more transparency but doesn’t want to pay more,” Majeres added. “Currently, airlines are devising their own solutions, but I am strongly advocating for standard procedures across the air freight industry.”
