GUEST COMMENT Cross-border ecommerce retailers must plan early to beat Q4 pressure and air cargo price hikes

Retailers can delight overseas customers this Christmas by working in close collaboration with shipping partners who are best positioned to secure air cargo space, writes Marie Barrance, sales director at Asendia UK.

As we head towards the crucial Golden Quarter in retail, logistics experts predict a scramble for air cargo space come September. Ecommerce retailers with international customers should act now to beat the rush and secure the best prices.

According to Air Cargo News: “The ecommerce boom, disruptions in ocean freight due to conflict in the Red Sea, and general improvements in global manufacturers’ activities have been largely responsible for higher air cargo spot rates. Demand in the fourth quarter could result in massively inflated prices.”

More demand and less capacity in the air freight market could cause headaches, particularly for companies hoping to move shipments out of Asia Pacific. Not only could inventory be held up on the way to retail stores and ecommerce warehouses, but brands with cross-border customers could see their parcel deliveries jeopardised if space in aircraft holds becomes scarce, and prices jump prohibitively high.Demand in June, measured in chargeable weight, was up 13% year on year, continuing the upward trend seen throughout the first half of 2024. In contrast, air cargo supply grew at its slowest pace in 2024, edging up only 3% year on year, Xeneta has reported.

Plan early for overseas peak parcel delivery
To avoid cross-border delivery disasters at Christmas, a robust peak strategy is essential. Online businesses must plan with their logistics partners well in advance, to cope with longer distances for overseas parcel deliveries. There are higher risks of transit delays and customs bottlenecks during this unpredictable, and frenetically busy season. As ‘middle-men’, dealing directly with the airlines, e-commerce parcel shipping specialists are getting ready for a big challenge this year.

At Asendia, we’re urging retail clients to plan for peak even earlier than usual, so we can secure the necessary air freight space on their behalf.

For 3PLs, it pays to adopt a proactive approach that involves the early arrangement of bulk service agreements with retail clients. More than a mere transaction, these agreements lay the foundation for a powerful partnership based on transparency, shared objectives, and meticulous preparation. 

We encourage our retail and brand clients to share forecasts and marketing strategies in late summer to early autumn, so that we can tailor to their seasonal needs. We then produce a tailor-made “peak pack” for each client, ensuring strategic alignment that not only smooths operations but also provides a competitive edge in an unpredictable market.

Starting early not only optimises costs but ensures timely air freight, meeting the high demand for swift cross-border e-commerce parcel deliveries during the festive season.

Efficient clearances at customs
Capacity shortages aside, customs congestion can also wreck the peak parcel delivery process, as we have all seen in previous years. It is possible to avoid congestion by ensuring all necessary documentation is in order well in advance. Service-oriented logistics partners will advise on customs processes and pinch-points throughout the season. They will also have contingency plans in place, and ideally be set up with Memorandum of Understanding (MoU) accreditation from HM Revenue & Customs, which will speed up and streamline export operations.

Be flexible and data-driven
Understanding demand patterns and market trends is crucial for successful peak season logistics. We encourage our retail clients to share historical data and market insights, laying the groundwork for meticulous data analysis. By employing advanced analytics tools, it’s possible to identify patterns, seasonal fluctuations, and emerging consumer preferences. This data-driven approach allows for the creation of accurate forecasts, enabling businesses to anticipate peak periods with more and more precision.

This foresight not only facilitates better resource allocation by the retailer, it also ensures that the 3PL’s warehouse operations and negotiations with airlines are aligned with the anticipated surge in demand.

Real-time visibility
While forecasting sets the stage for peak season preparedness, real-time monitoring is crucial for addressing unforeseen challenges once peak is in full swing.

Proactive 3PLs will support retailers with advanced tracking systems that offer real-time visibility into the cross-border supply chain. This allows for the swift identification of potential disruptions, such as transit delays, customs clearance issues, or unexpected demand spikes. The ability to resolve issues as they arise ensures a proactive response, minimising delivery delays. For instance, if Dallas airport has a problem, switching to New York is a helpful alternative.

Time will tell if the prediction of high air freight prices and a lack of cargo space is correct or not.  But for certain, placing data at the forefront of peak season strategy can put retail brands in a strong position, providing accurate forecasting, immediate troubleshooting, and continuous improvement year after year. 

In an industry where agility and adaptability are key, strong relationships with 3 PLs, boosted by data insights, will enable the industry to navigate the complexities of peak season logistics with confidence and precision.

Marie Barrance, sales director at Asendia UK