Industry experts say the rise of cross-border e-commerce has made the global air cargo market more dynamic than ever, with China taking the lead in promoting the Air Silk Road, an air route connecting China with Belt and Road countries.
Everything from flowers and fruit to household appliances with lithium-ion batteries are now standard for air cargo, they said.
As well as generating cargo business for airlines, the trend is also stimulating trade in certain niche categories, such as smart wearables and electronic products made by Chinese companies that are now being welcomed by overseas consumers, fuelled by a boom in cross-border e-commerce that has also spurred demand for air cargo shipments.
Industry observers say that as innovation powers consumer products and consumers pursue lifestyles marked by increased use of “intelligent” products, competition in the global consumer electronics market is intensifying, with superior Chinese products featuring intelligent and personalized design gaining a clear advantage.
This is stimulating the air cargo market. China Southern Airlines, the national carrier based in Guangzhou, said that in the past few years, the international air cargo market has undergone major changes. Traditional bulk trade cargo shipments have been largely replaced by cross-border e-commerce cargo shipments.
“The air cargo market is constantly changing, with cross-border e-commerce business driving rapid growth in air cargo demand,” said Peter Gao, Boeing's vice president of commercial sales and marketing in China.
In 2023, China's import and export volume of cross-border e-commerce products is expected to reach 2.38 trillion yuan ($328.3 billion), up 15.6% from the previous year. Exports of products solely for cross-border e-commerce will reach 1.83 trillion yuan, up nearly 20% from the previous year, according to the General Administration of Customs.
As e-commerce involves products not included in traditional trade, it has given rise to new trade models and transportation methods, placing new requirements on China's international air cargo services and improving the country's capabilities.
For example, products containing lithium-ion batteries were previously considered dangerous goods for air transport, but cross-border e-commerce now requires the transport of large quantities of products containing lithium-ion batteries.
In early June, China Southern Airlines operated the first cross-border charter cargo flight, transporting goods containing lithium-ion batteries from Guangzhou, Guangdong Province to London. The products included electric fans and Bluetooth earphones, marking a milestone in China's air cargo transportation.
The rapid growth of China's cross-border e-commerce has created a need for new international air cargo routes. In late March, Shenzhen Bao'an International Airport opened a dedicated cross-border international cargo route connecting Shenzhen in Guangdong Province and Budapest in Hungary, the first route to be launched this year.
In early April, Chengdu Tianfu International Airport launched the first international air cargo route connecting Chengdu, Sichuan Province, and Oslo, Norway, focusing on the transportation of cross-border e-commerce products in parcels.
These links are expected to boost China's steadily growing trade with Belt and Road countries. In the first quarter of this year, trade with Belt and Road countries exceeded 4.8 trillion yuan, up 5.5 percent from the same period last year and 0.5 percentage points higher than the growth rate of overall foreign trade, according to data from the General Administration of Customs.
In the first quarter, China Southern Airlines transported about 2,800 tonnes of cross-border e-commerce products, electronic products, industrial accessories and agricultural products from Beijing Daxing International Airport to BRI countries and regions.
The figure was the highest ever since the capital's new airport began operations in 2019. The company said this has further promoted economic and trade exchanges between China and Belt and Road countries.
Since March, air freight demand for transporting fresh flowers to Central and West Asia has increased. China Southern Airlines designed the optimal transportation route and provided cold chain services to transport fresh flowers from Kunming, Yunnan Province to Beijing, and then to Central and West Asia.
The company also transports goods such as cherries from Chile and Tajikistan, salmon from European countries, and red wine from Georgia. The company said it will continue to increase investments in air cargo routes connecting China with Belt and Road countries.
“We are confident that Beijing Daxing International Airport will develop into a world-class aviation hub and continue to contribute to the development of the Belt and Road Initiative,” said Wu Rongxin, vice general manager of China Southern Airlines.
China's provinces and regions are stepping up efforts to improve air cargo services and increasingly exploring the expansion of cross-border e-commerce trade. For example, central China's Henan province, which had no intercontinental cargo route network 10 years ago, now operates frequent cargo flights between Zhengzhou and Luxembourg and is focusing on the rapid growth of the Air Silk Road, enabling goods to be transported from Henan to global consumers and from other countries to Henan.
Cargolux Airlines International, Europe's largest cargo airline based in Luxembourg, launched a new route between Luxembourg and Zhengzhou in late May, with the return flight connecting Chicago and New York.
The first cargo flight mainly transported auto parts, electronic products and daily necessities. The weekly flight was operated by a Boeing B747 freighter. Cargolux currently operates 18 weekly cargo flights connecting Zhengzhou with other cities overseas.
China began supporting the construction of the two-way “Air Silk Road” connecting Zhengzhou and Luxembourg in 2017. According to the National Development and Reform Commission, the service scope of Air Silk Road now covers more than 200 cities in more than 20 European countries and about 90 cities across China.
Roland Leyland, Chinese ambassador to Luxembourg, said that aviation is an important industry for Luxembourg and the deepening friendship between Luxembourg and Henan province stems from air transport, adding that he believes the two countries will continue to strengthen exchanges in various fields in the future.
Additionally, Henan continues to develop its aircraft manufacturing sector, with an investment of RMB 1 billion enabling the first phase of the Zhengzhou Aviation Industrial Park to produce over 50 sets of simulators per year.
Meanwhile, the International Air Transport Association recently released data on global air cargo market performance in April, showing strong year-on-year growth in demand through the second quarter.
Total demand, measured in cargo tonne-kilometers, increased 11.1% compared to April 2023 levels, the fifth consecutive month of double-digit year-on-year growth. Capacity, measured in available cargo tonne-kilometers, increased 7.1% year-on-year, according to IATA.
In particular, airlines in the Asia Pacific region performed the best of all regions, with demand for air cargo traffic increasing 14% year-on-year in April. Demand within the Asian market increased 13.2% year-on-year, while demand between Asia and Europe increased 17.7% year-on-year, according to IATA.
“While much uncertainty remains on the economic front, the underlying foundations for positive air cargo performance appear to be deepening,” IATA Director General Willie Walsh said.
“Air cargo demand has increased despite purchasing managers' indexes pointing to a possible contraction in recent months. With the PMIs now pointing to growth, the outlook for continued strong demand is even stronger.”
