1. E-commerce Platforms’ Increasing Control Over Air Capacity

E-commerce platforms' control over air cargo capacity has intensified, resulting in a market dominated by major e-commerce players purchasing capacity as single large customers. Platforms such as SHEIN, TEMU, and other emerging e-commerce giants now directly or indirectly control over half of the available air cargo capacity. Leveraging their strong market influence, these platforms can regulate traffic and precisely control order volumes and market cargo flows, leading to a significant impact on air freight rates.

Looking at rate trends, since late December 2024, air freight prices have taken a sharp downward turn. On European and American routes, rates have plummeted from over 40 RMB per kilogram to just over 20 RMB, with some even falling below 20 RMB—a drop of up to 50%. Although the early Lunar New Year may slightly boost rates one to two weeks before the holiday, it is expected that prices will likely remain low throughout February. This price volatility is creating significant challenges for market participants.

2. Charter Operators and Freight Forwarders Face Severe Loss Risks at the Start of the Year

The changes in the European and American route markets have led to a difficult situation for many charter operators and block space agents, whose contract costs with airlines are approximately 40 RMB per kilogram. With market sales prices falling below this threshold, many are losing money, potentially facing a 50% price gap loss for at least two months. Additionally, since many charter contracts for large e-commerce platforms are signed via freight forwarders, these forwarders not only earn minimal operational fees but also bear the risk of deposit losses if contracts are breached.

There is also potential risk from trade friction, as the upcoming inauguration of Trump on January 20 could spark a chain reaction of trade tensions. If more countries follow Brazil and Mexico’s lead by removing the tax exemption for cross-border e-commerce parcel imports and begin imposing tariffs, e-commerce platforms and sellers will need time to adapt, leading to a short-term decline in direct e-commerce parcel volumes.

Currently, approximately 20,000 tons of direct cross-border e-commerce parcels are shipped daily from China via air cargo. If the market experiences a downturn, with several thousand tons of daily airfreight volume lost, the entire air cargo market could face a sharp price collapse in the short term. Most of the increased air cargo capacity has been prepared to meet e-commerce demand, so a reduction in e-commerce cargo volumes will exacerbate the issue of excess capacity, further driving down prices and causing significant disruption to the air cargo market.

While the air cargo market has seen some growth driven by e-commerce, the current challenges of falling rates, potential losses, and the risk of trade friction must be closely monitored by market participants. Proactive measures are necessary to ensure market stability and sustainable development.

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