There are 109 days until ChristmasSeptember 9, 2021
I live about 350 miles from my mother, and last year, I got my Christmas present from my mom (a robe – a true mom gift) about three days late. Now I am a big boy, and I certainly understand the impacts of the pandemic and the issues challenging e-commerce in 2020. Unfortunately, we may be in for more of the same this holiday season, and I hate to say it, maybe even in 2022.
In 2021 we have seen so many logistics impacts. These include ocean shipping accidents, container shortages, employee shortages, and raw material shortages, just to name a few. When we add in the Delta variant, this is also hitting airlines who were just starting to see volumes increase. Moreover, the delta variant has made the need for masking and limiting exposure to very public places across the globe. Subsequently, we do not see a reduction in e-commerce many had predicted for this year, but instead, increases in demand for both e-commerce products and e-commerce shipping.
During the holiday 2021 season, the estimate tells that “7.2 million more packages will need to be shipped each day this holiday season than the system can handle.” Many logistics services will work weekend deliveries, but this will not be able to make up for the excess demand. E-commerce companies cannot afford to have their shipments delivered late or not at all during the holiday season, as one bad experience ruins their opportunities for future sales.
Airlines can drive more new revenue with Air Cargo. We know there will be a shortfall in passenger traffic in 2021 and beyond. And e-commerce is expected to grow at around 6.5% CAGR globally. There is a tremendous revenue opportunity here for airlines. One of our phenomenal airline customers, Azul, has driven new revenue with its expansion into e-commerce air cargo. And the results are impressive. Azul has an overall 20% Market share in air cargo in Brazil with a 60% market share in air cargo e-commerce distribution. And they are growing at a pace of 8%-10% per month.
Plato said, “Necessity is the mother of invention.” In today’s world, Airlines can be innovative and drive additional revenues with air cargo. E-commerce will only grow. And with more business meetings moving and staying online, airline business travel is likely to diminish. That makes e-commerce a tremendous opportunity that is also extremely important for airlines. So, help out my mom and make sure her favorite son gets his gift on time.