It's the time of year when airlines and charter companies sign new annual BSA (Block Space Agreement) rates with air freight forwarders. With the backing of e-commerce platforms' shipping volume, airlines have record-high expectations for price increases. Major e-commerce platforms have already signed direct contracts with mainstream cargo airlines, and their shipments now account for at least half of the total capacity of these airlines.

Currently, cross-border e-commerce is still growing rapidly. The demand for direct air freight driven by the full-service model of e-commerce platforms continues to rise, leading cargo airlines to have high market expectations. As a result, the arbitrage space for air freight forwarders to profit from seasonal differences in BSA year-long fixed contract rates is shrinking. Major e-commerce platforms, logistics providers, brands, and foreign trade exporters are all bearing the pain of high air freight rates.

Given the current situation where air cargo demand is strong, but supply is limited, we need to consider who is the driving force behind this market supply-demand dynamic. Is the pricing power in air cargo held by airlines, which control flight capacity, or by e-commerce platforms, which are now the single largest shippers? Globally, air cargo capacity is already fully utilized, with all available planes in operation. However, e-commerce platforms, by controlling traffic and adjusting their fulfillment models, are likely to bring about changes in demand.

E-commerce platforms are unlikely to remain "lambs to the slaughter" under high air freight rates for long. They are proactively reducing their reliance on air freight by decreasing the use of direct shipping logistics, cutting back on advertising expenses during peak seasons, and aggressively promoting semi-fulfillment models like sea freight plus overseas warehouses.

The core logic of e-commerce logistics is that traffic generates orders, and orders generate demand for transportation. Control over traffic lies in the hands of e-commerce platforms, and all service providers in the industry chain adjust based on traffic shifts. E-commerce platforms can manipulate air freight prices in certain markets by selectively allocating traffic to specific sites, regions, countries, and routes at different times.

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WeChat Official Account: Cross-border E-commerce Logistics Baixiaosheng