While a lack luster start to the year in international trade was not unexpected after a growth period of nearly 15 years, the second half of the year has become one of the healthiest peak seasons in recent memory. As the recovery of the global economy progressed, international trade continued to rise on the popularity of e-commerce, as well as historically low jet fuel prices, leading to robust growth in airfreight volumes. Angela Gittens, director general of ACI World, said this growth may be no mere fluke. “When we look at the traffic data over the last two decades,” she wrote, “we get a sense that aviation has entered a new era of unprecedented growth.”
This unprecedented growth comes from a myriad of growing sectors in the logistics market including the new iPhone release and China’s Singles’ Day. Per JOC.com “Nowhere is this more apparent than in China, with Alibaba claiming that more than a million retailers participated in the country’s Singles’ Day Nov. 11 online shopping extravaganza. Alibaba said sales reached $25.3 billion, more than $7.5 billion higher than in 2016. China’s largest retailer JD.com started its Singles’ Day promotion on Nov. 1 and by Nov. 11 had sold products worth $19 billion, up more than 50 percent year over year. “
E-commerce numbers are improving the air freight data for most of the companies working in the supply chain, but growth isn’t without it’s problems. Air rates have an increased volatility in the market due to spikes and dips that are unforeseen in this new revenue stream. These fluctuations are mitigated with careful volume planning and pricing measures that offset variances for shippers. “Over the longer term, e-commerce will account for an increasing share of retail sales — the mega-trend of our times,” says Greg Guillaume, of Atlas Air Worldwide. Exposure to foreign brands around the world and proliferation of instant desire satisfactions should continue to drive this trend.
No longer is shopping a focused act in which we need to purposefully engage. Last night, I watched television while surfing through Amazon looking for ideas about Christmas gifts and ended up buying a few household good I didn’t even know I needed when I sat down. Impulse buys can now happen without standing in line. Rather we look for those bored moments, pull out our phones, wonder what’s new and find ourselves half shopping while we work and travel. As with any boon, Nelson International will be watching close to ensure we’re capitalizing on trends and fluctuations to give our clients the best service at the best market prices.
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