E-commerce faces tough cargo capacity shortage because of bellyhold reliance

IATA and the Universal Postal Union (UPU) have warned that the e-commerce sector is facing a shortage of air cargo capacity because of its reliance on passenger operations.

The two organisations said that the coronavirus outbreak had created a surge in e-commerce demand as more people shopped from home, while air cargo capacity has been slashed due to a 95% reduction in passenger flights which are typically used to transport mail.

The organisations reported a 25-30% increase in demand for e-commerce.

“Postal administrations are facing a challenge in sending and delivering international mail, in particular, cross-continental mail,” IATA and the UPU said.

The two groups called on governments to facilitate the flexibility that airlines need to meet this critical demand by removing border blockages to ensure trade flows continue, avoiding unnecessary regulations and fast tracking the issuance of permits for chartered operations.

Additionally, ensuring adequately trained staff are available to process and clear the mail upon arrival is essential.

“Airlines have been required to cut passenger services in the fight to stop the spread of Covid-19. So, it’s vital that everything is done to support the smooth movement of mail which is an important component of society,” said Alexandre de Juniac, IATA’s director general and chief executive.

“Posts are trusted partners in the delivery of goods, vital medical supplies and essential information on the pandemic. The cancellation of more than 4.5m passenger flights – the primary means of transporting post – has meant that capacity is scarce, costs more and takes longer. Action needs to be swiftly taken to address the shortfall in air cargo capacity and to keep the mail moving,” added UPU director general Bishar Hussein.

The two organisations said that G20 governments had committed to minimise disruptions to trade and global supply chains and identified the need to prioritise keeping air logistics networks open and functioning efficiently.

“Posts and airlines are cooperating to meet this priority by ensuring that reliable operations continue throughout the pandemic,” the groups said.

Adding that they are also working to support posts’ use of cargo flights in addition to commercial passenger flights by providing information on the airlines and cargo carrier status, available new alternative routes and best practices.