E-Commerce Driving Surge in Chinese Air Cargo

Air trade numbers around the world have generally not been looking positive this year, but there seems to be anecdotal evidence that e-commerce is driving increased volumes in the second half of 2023. Due to value reporting thresholds trade statistics generally do a poor job at capturing cross border e-commerce traffic, which may account for up to a fifth of global air cargo volumes. This article looks at some indicators of increased international air cargo activity not captured in trade statistics.

Cross Border E-Commerce Market Performance

China is and remains the most important source of cross border e-commerce purchases worldwide, particularly when purchases from neighbouring countries are excluded. For example, within Europe or the Americas a lot of cross border movements may be between Amazon sites in neighbouring countries.

Alibaba’s International Digital Commerce Group (AIDC) runs the most important cross border platforms. This includes platforms such as Lazada, AliExpress, Trendyol, Daraz, Miravia, and Alibaba.com. The chart below shows platform shares according to the annual IPC cross border shopper survey, which last interviewed over 33,000 respondents in 39 countries about their online shopping habits in late 2022. Amazon tops the list, primarily due to cross border purchases from neighbouring countries. Long haul e-commerce is dominated by Alibaba/ Aliexpress. Pinduoduo owned Temu, which started in September 2022 has been gaining ground, but sofar only provides an immaterial contribution to its parent company’s results.

In its most recent quarterly filing, Alibaba indicated that orders grew 28% year over year. Cainiao, Alibaba’s logistics arm, states in its recent A1 filing to the Hong Kong Stock exchange that it moved 1.5 billion international packages in the financial year ended March 2023 (compared to 1.7 and 1.4, respectively, in the two preceeding years). That is more than the combined international parcel volumes moved by DHL, FedEx and UPS. These three companies collectively move about 1 billion international packages per year. Most cross-border e-commerce moves by air.

Chinese Air Cargo Growth in 2023

In fact, Chinese international air cargo traffic has picked up substantially since July 2023, with growth particularly strong in August, September and October. The chart below shows monthly tonnage since January 2015. Prior to 2020, market patterns following a typical pattern with a drop around Chinese New Year, followed by rebound, and a year-end peak. Since then, volumes have been highly variable and have not resumed previous seasonality patterns.

Chinese customs statistics, which go some way in tracking cross border e-commerce also show an uptick in weight during the same period.

Air import data for Europea and the US do not show an increase. Value reporting thresholds imply that any increase in e-commerce traffic is unlikely to be captured in the data. Reporting thresholds for the European Union it is 1000 EUR or 1000 kg, for the United States it is $2500 for exports and $2000 for imports.