Consultant Insight: More 3PLs lease aircraft to expand cross-border e-commerce capabilities

The flurry of new aircraft leasing continues as logistics providers seek more international transportation capacity on behalf of their customers while looking to expand their reach in the growing cross-border e-commerce market. [caption id="attachment_69752" align="alignright" width="298"] Cathy Roberson, Cargo Facts Consulting senior consultant and Air Cargo World columnist[/caption] Atlas Air recently announced partnerships with logistics providers Kuehne+Nagel and Cainaio that involve both. Kuehne+Nagel, for example, plans to charter two new B747-8F aircraft from Atlas Air "to operate flights globally from the third and fourth quarters of 2022," according to its release. In addition, "the aircraft will support Kuehne+Nagel customers on volatile trade lanes, such as the trans-Pacific routes." Since the pandemic began in 2020, several freight forwarders like Kuehne+Nagel have chartered aircraft to provide much-needed capacity for their customers. More than 50% of air capacity was lost when passenger airlines were grounded at the pandemic's beginning. International air capacity has been slow to return since then due to intermittent outbreaks of COVID-19, strains as well as various related government lockdowns. In addition, port congestion and delays within the ocean freight market have resulted in some shippers opting for air charters to ensure inventories are replenished for stores or manufacturing production. Meanwhile, an increase in cross-border e-commerce demand is also prompting more logistics providers to lease aircraft. Cainiao, the logistics arm of Alibaba Group, announced the expansion of its strategic partnership with Atlas Air by adding a new Boeing 747-8 freighter under a long-term agreement to increase capacity on routes between China and the Americas. The new aircraft will enter service for Cainiao in Q2 and will link China with the United States, Brazil and Chile. Cainiao partnered with Atlas Air in October 2020 with three weekly flights to Brazil and Chile. Then in November 2021, further expanded its partnership with Atlas Air to include daily charter flights between China and Latin America in response to the growth of cross-border trade between China and Latin America. The number of parcels shipped to Brazil in September 2021 increased by 200% year over year, according to a Cainiao release. The logistics provider rolled out a "12-day delivery service" in Brazil's core metropolitan areas in response to the robust growth. In addition, Cainiao also plans to establish a distribution center in Brazil to offer next-day or even same-day delivery in partnership with local delivery firms. Flexport is also expanding its cross-border e-commerce capabilities by partnering with Eastern Air Holdings . The partnership will involve Eastern flying its 777 express freighters, once approved by the Federal Aviation Administration, twice a week between Chicago (ORD) and Hong Kong (HKG), and between ORD and Vietnam (SGN) on behalf of Flexport. The Eastern 777 express freighter is the first of its kind to market, designed specifically for e-commerce goods, according to a release. The service will join Flexport's global airfreight, container freight station and trucking network. All shipments will be managed via the Flexport Platform, including end-to-end control of shipments and continuous milestone visibility. "Flexport client demand for airfreight has roughly doubled while global capacity has remained approximately 10% below pre-pandemic levels," noted Neel Jones Shah, executive vice president and global head of airfreight at Flexport. The global cross-border e-commerce market is growing fast. According to market research firms, the global cross-border B2C e-commerce market was estimated at $562.1 billion in 2018 and is expected to increase to $4.2 trillion by 2027 growing at a compound annual growth rate of nearly 28.4% between 2020 and 2027. In comparison, U.S. e-commerce sales were $870.8 billion 2021, up 10% from 2020’s $791.7 billion and up 44.7% from 2019’s $601.7 billion. Other logistics providers are building out capabilities to expand cross-border e-commerce services such as FedEx , SEKO Logistics and even ocean transport giants CMA CGM and Maersk .

Consultant Insight: More 3PLs lease aircraft to expand cross-border e-commerce capabilities

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