Will air freight exporters face a peak season fee?

Due to an expected high volume of air freight by the end of the year, integrators are considering charging additional fees. This is now also being discussed by some cargo airlines. The move is a reaction to the high demand for air transportation versus scarce capacity. In addition, the USA and Canada are considering stiffer rules for shippers whose goods are destined for consignees in North America. We discussed these and other novelties influencing the air freight industry, with Adam Gunnarsson (AG), Vice President Kales Group BV, on the fringes of the recent Seafood Logistics Conference at Oslo Gardermoen Airport.


CFG: Adam, if a shipper fails to send at least 6 shipments within three months into the USA or Canada, they will be excluded from further business. This announcement by the local authorities come up completely unexpectedly about a month ago and caught the air freight industry by surprise. What is the status of this provision today?

AG: Several carriers we talked to, all say the same thing – instructions are not clear, and the content is constantly shifting. The reason why it has come up, has not been disclosed but it is related to security issues. The instructions sent out from various carriers, have been withdrawn, awaiting new instructions from TSA. The original instructions included goods originating from around 50 countries, including all European countries. Since then, the list of countries has been extended but so far not all countries are included. The carriers are referring to IATA for more information.

CFG: How was the step officially justified?

AG: As indicated, it has not been disclosed to this date.

CFG: At the Norwegian Seafood conference, you indicated that some carriers might soon introduce a ‘peak season fee’ because demand is outgrowing capacity, creating major imbalances in air freight. When will it come and what sums are we talking about?

AG: With the peak season starting in September, air cargo demand is expected to remain robust, particularly in high-demand regions like Asia Pacific. However, capacity constraints are already evident, with flights on many routes already fully booked. The market faces potential additional pressure from reduced belly capacity in Q4 – the shift from summer to winter schedule – and the possibility of strikes at U.S. East Coast ports, which could worsen the existing challenges.
So far, we have only heard of peak season fees being introduced by some of the integrators, but not at which level, as of when, and in what shape or form, i.e. fixed fees or flexible and dynamic pricing.

CFG: Turning to e-trade, widely discussed at the Oslo meeting: is the cargo industry amid a new era of e-commerce, which conversely could lead to the downfall of general cargo?

AG: The cargo industry is indeed undergoing a significant transformation due to the rapid growth of e-commerce. However, whether this signals the downfall of general cargo is a more nuanced question. E-commerce is booming, especially following the pandemic, as consumer preferences shifted toward online shopping. The two segments have different characteristics. E-commerce is smaller parcels, faster transit times and more technology-intensive; more frequent shipments rather than large, less frequent general cargo loads. General cargo, which includes large, irregular, or bulky goods, still has a vital role in global trade. Industrial sectors, energy, construction, and manufacturing, rely heavily on general cargo services to ship raw materials and equipment. E-commerce does not serve these sectors well, due to the nature of the products being shipped. The demand for bulk goods, machinery, and large-scale materials in global supply chains, remains substantial. The industry is evolving, and general cargo is likely to persist alongside e-commerce as part of a more diversified logistics landscape. The key for companies will be to adapt — those that can successfully integrate e-commerce logistics with traditional cargo models will be the winners.

CFG: Back to the seafood issue discussed in Oslo: The Norwegian fishing industry and its freight forwarders are complaining about the withdrawal of freighters and the resulting lack of main deck capacity. Doesn’t this development also offer the opportunity to create a greater balance between air freight exports and imports through the shift to e-commerce?

AG: Yes, as long as e-commerce hubs in Europe are spread to more countries and airports. So far, they have been concentrated at a few airports such as Liège, Budapest, Madrid, etc., but we now see airports like Copenhagen and Oslo expanding, attracting more inbound e-commerce volumes. Increasing e-commerce volumes coming into Oslo, will have a positive effect on the capacity balance.

CFG: You said that by 2040, roughly 95% of consumer goods flown by air will consist of e-commerce shipments. Won’t this worsen the current capacity crunch because Airbus and Boeing cannot build a large number of new freighters so quickly and old aircraft are gradually being phased out for reasons of profitability or high CO2 emissions. How will it affect global supply chains if this prediction becomes reality?

AG: I said “95% of all purchases will be done online through e-commerce in 2040.” This statement seems to have come from Nasdaq originally, but has been quoted by Forbes and many other media channels and is today included in facts and statistics of e-commerce. The rapid growth of e-trade will change the air cargo market and spur the need for more capacity. New distribution patterns and supply chains will be required.


Adam, thank you for your insights.

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