E-commerce boomed for a few years, and it really exploded during the health crisis. According to the International Air Transport Association (IATA), the sector grew in 2021 by 30% compared to the previous year, reaching a value of about 4.5 trillion dollars. Its development took several years before forecasts were made before the crisis. In 2025, it could be close to $7,000 billion. And if the main global association of airlines is closely interested in these figures, it is because air has established itself as the main carrier of international transport for e-commerce. Today, having relegated to the background, the Navy and the Railroad can still play.
With its explosive growth, e-commerce has quickly become essential to air freight and now accounts for 18% of its revenue. This share is expected to rise to 22% this year. But the aircraft has also become essential to the international development of this sector: according to the International Air Transport Association (IATA), 80% of cross-border shipments associated with e-commerce took the air route in 2021. Air freight thus represents 20% of the sector’s total value, nearly 1 000 billion dollars. This is despite large capacity issues still associated with low passenger traffic (goods on hold account for 70% of air cargo capacity in normal times) and the difficulty for carriers to keep pace with growth.
This dominance is explained by several factors specific to e-commerce for which the aircraft provides an unparalleled advantage over a boat or train. For Eric Martin-Nouvel, Managing Director in charge of Freight Forwarding at Geodis, it is categorical: Speed is today the main criterion in e-commerce processing.
This opinion is widely shared by other carriers, especially outspoken professionals. For Philippe Bretat, CEO of DHL Express France, the dominance of speed in e-commerce is due to the desire of individuals who want delivery as quickly as possible. So he sees traffic pretty much drained of air, which is able to provide a speed unattainable by boat.
In fact, many carriers have just switched to air transportation to take advantage of the growth potential of e-commerce. CMA CGM, which specializes in shipping, launched air service just a year ago with four Airbus A330-200Fs, which will be augmented with two Boeing 777Fs in the spring. The group has ordered four new A350Fs, which will be delivered after 2025. Likewise, SNCF subsidiary Geodis has been operating its Airbus A330 since last summer.
environment in mind
Emphasizing the priority of speed, Jerome Ovion, Vice President of Road Networks Southern Europe for Fedex Express and until recently responsible for hubs and transfers, offers a slightly broader view into the modes selection criteria for e-commerce: “We also see a great deal of reliability: when you announce About delivering on a D+1, you have to stick with it. Finally, the environment is an important element of the discussion with our customers, not necessarily with the end customer but with the shippers.”
In this context of heightened environmental considerations, aircraft could suffer from high carbon emissions. For example, DHL accounts for more than 80% of or emits about 50 times more carbon dioxide per kilogram transported than sea freight.
If he readily admits that the environmental criterion is increasingly being taken into account in the choice of mode of transportation, Sebastian Waters, global director of e-commerce at Kuehne + Nagel, somewhat eases the resulting strain. He explains that this largely depends on the behavior of the final consumers, who are constantly changing, and their tendency to buy on the other side of the world. Transportation accounts for only 5-10% of the carbon footprint of e-commerce according to Carbone 4.
Whatever the case, more and more companies are implementing solutions to reduce their environmental footprint. Such is the case with consolidators, which manage end-to-end shipments. Thus Fedex announced its intention to be carbon neutral in 2040, while DHL aims to 2050, with investments of several billion euros to renew its fleets, purchase sustainable aviation fuel, and improve its operations in flight and on the ground.
It could also involve merging shipments with weekly shipments rather than daily shipments, notes Sebastian Waters. But the latter cautions that these options come at a price that customers must accept.
Especially since this environmental dimension comes on top of the rise in air freight prices during the crisis. According to the International Air Transport Association (IATA), the price per kilogram transported per kilometer was about three dollars in 2021, compared to an average of 1.8 dollars in 2019. And despite the gradual return to capacity as passenger flights resume, prices should remain at around 2.7 dollars in 2022.
The boat and the train have other advantages
Thus the boat, which plays on the size of the transported volumes to reduce its ecological and economic balance, can perform well. At Geodis, Eric Martin-Neuville is convinced in any case of this: “I think the major operators, the platforms are forced to look and I think that for environmental reasons and for economic reasons, we will have a nominal transition towards the sea for part of their width.
He was joined on this point by Sebastian Waters. Even the head of e-commerce at Kuehne + Nagel mentions a third rail way, especially for high-end brands. This is developing in particular between Europe and Asia, with tremendous growth since 2014. Thus China is aggressively developing its infrastructure through large subsidies, with organization around hubs and an increase in the number of trains in service. “It offers an intermediate choice between sea and air, with twice the speed of the sea and half the cost of air,” he says.
The two men agree not to oppose the different modes of transportation. This is also the case with Fedex, Jérôme Ovion believes that strong growth in demand will affect all modes of transport.
Tailor made to customer…
Eric Martin-Nouvel also sees the integration of transportation based on the “electronic retailer” classification. Combining the speed of transport with the low need for infrastructure, air transport is essential for the smallest sellers who only work in B-to-C: “Their model only works with a short delivery time. I don’t see it diminishing and I don’t think it is affected much by the environmental aspect.”
Conversely, he believes that leading players are able to free themselves at least partially from air transportation by pre-positioning stocks as close as possible to end customers. This is especially the case for global platforms such as Amazon or Alibaba, which have large warehouses around the world. Indeed, these giants can connect by sea and rail to supply this B-to-B-to-C model, and the need for speed is only felt in the last kilometers between the intermediate warehouse and the end customer. “This involves a strategic choice about inventory value which can be very high,” Geodis’ freight manager warns.
… and products
For Sebastian Wouters, the slider between different modes of transport also depends greatly on the type of product. E-retailers focused on low-value-added goods will prefer solutions at the lowest cost, while the luxury or fashion industry is looking for distinctive solutions with a high level of service. It also mentions geographical criteria which are dictated in particular by the available infrastructures.
So the head of e-commerce at Kuehne + Nagel relies on the flexibility between air and sea solutions to meet the needs of his customers, particularly in the event of unforeseen events or changes in demand – frequent statements in e-commerce: “Sometimes you have to move things from ocean freight to freight forwarding. We do all of these things based on the situation and the need to help our customers and we have these options available to them.”
Kuehne + Nagel in particular offers a solution called “Sea-Air”, playing on both sides to improve transportation costs and times. Usually, cargo leaving Asia can reach the Middle East by boat before being transported there by plane to avoid the long and costly passage of the Suez Canal.
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