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Ecommerce growth leaves Latin America's air cargo imbalance unresolved

Growing ecommerce imports are reshaping Latin America's air cargo networks, but have yet to resolve the region's directional imbalance, with LATAM Cargo reporting that declining industrial shipments are offsetting some of the gains. Speaking to The Loadstar at TIACA's Air Cargo Forum in Miami last week, LATAM Cargo group CEO Andrés Bianchi said stronger online retail volumes did not tell the whole story of southbound demand. "First of all, it's important to note that ecommerce volumes have increased, but other commodities have decreased," he said. "That means still you face the imbalance, because the export sector is doing quite well." Auto parts and mining equipment were among the industrial goods affected, he explained. While a broader cargo mix offered diversification, greater reliance on ecommerce also introduced different risks. "They are much more exposed to regulatory cycles than other commodities. So you have to start thinking differently in terms of the risks you have to manage when you design your operation." For Avianca Cargo, ecommerce has become a major driver of southbound business, particularly from Miami to Colombia. "We also move mining cargo, auto parts, and pharmaceuticals, but the biggest share and the biggest growth is ecommerce, for sure," CEO Diogo Elias told The Loadstar. The carrier also moves ecommerce into Brazil, Chile, Ecuador, and Central America, while resumed freighter operations from Miami to Venezuela carry online retail shipments too. But matching Latin American exports with inbound demand requires balancing a network, rather than simply filling the return leg of individual routes. Mr Elias explained that around 90% of Avianca's South American cargo into Miami came from five principal origins. From Miami, however, the carrier served more than 30 destinations, distributing ecommerce alongside automotive parts, semiconductors, mobile phones, and other tech products. Strong export flows also mask pressure on shippers' costs. Speaking on a separate panel, Mr Bianchi said currency appreciation and minimum wage increases had, together, raised Colombian exporters' labour costs by 40% to 45% in dollar terms over the past year. "When you try to talk to them about higher prices when they are already facing a cost crunch, your approach has to be different, and you have to be a lot more creative," he said. Nor does all the region's Chinese ecommerce arrive through the US. Avianca also carries shipments through Madrid, using its passenger network to connect Europe with South America. "Our main hub in Europe is Madrid," Mr Elias said, explaining that it was the principal European gateway for the Chinese ecommerce carried by the airline. The ability of online platforms to develop alternative markets has also changed freighter deployment, according to Atlas Air executive Martin Drew. Following the removal of US de minimis treatment for Chinese shipments last year, platforms redirected volumes towards other destinations. "They ramped up existing markets, or seemingly created new markets, overnight," he told The Loadstar. "A good example was Lima in Peru. One of the biggest platforms said they now needed capacity into Lima. Today, we're still operating three flights a week from China into Lima, and that was a market they just switched over." However, that redeployment created another challenge when US demand recovered. Aircraft committed to serving Latin America were no longer readily available to accommodate the additional US business. "We had redirected so much capacity to Latin America that when we were asked for more capacity back into the US, there wasn't sufficient capacity," Mr Drew said. The changing routes also reinforce Miami's role as a connecting gateway. In his conference presentation, Rotate's Ryan Keyrouse highlighted transhipments and indirect capacity serving Asia-Latin America demand, while warning that an apparent global balance between supply and demand would not necessarily be reflected on individual tradelanes. For regional carriers, the task is, therefore, to respond to new demand without assuming today's cargo mix will remain unchanged. Mr Bianchi pointed to the growing importance of pharmaceuticals alongside ecommerce, but noted that even high-paying commodities had distinct vulnerabilities: pharmaceutical flows, for example, could fall when patents expired and local generic production developed. Rather than betting on a single growth sector, LATAM's approach was to retain the ability to adapt, he said. "More than understanding and trying to bet on the next big commodity, what we're trying to do is prepare ourselves to be able to react quickly in a cost-effective fashion in order to respond very well to our customers' needs."

News in Brief Podcast | Week 43 | Reliability, rates and port fee delay

How reliable is container shipping right now, and what are the biggest factors impacting on-time performance? This week on News in Brief, Xeneta Chief Analyst Peter Sand joins us to unpack the latest schedule reliability data, explore how different carrier alliance strategies are performing, and examine the ongoing impact of port congestion on capacity and sailing schedules. We also discuss the proposed delay to US port fees on China-linked vessels, what it means for shippers, and take a look at the latest rate trends as the market heads out of Golden week and towards the Thanksgiving and Christmas peak season.

Major liners set to resume all Asia-Europe services through Suez

All the mainline operators look set to resume Suez Canal transits for their Asia-North Europe and Asia-Mediterranean services. Taiwan's Evergreen will join its Ocean Alliance partners in doing just that this week, while Yang Ming and South Korea's HMM will join their Premier Alliance partners restarting Suez crossings next month. Linerlytica's report today says Evergreen will send the 16,556 teu Ever Eon and Ever Edit on eastbound Suez transits on the Ocean Alliance's NEU7/CES service on 7 and 11 November, respectively, with the 20,124 teu Ever Gifted on the alliance's MD2 service on 16 November. The Premier Alliance's Asia Mediterranean 1 (MD1) service will resume Suez transits next month, adding a new call at Sokhna to cater for Asia-Red Sea cargo. The revised MD1 rotation will call at Ningbo, Shanghai, Shekou, Singapore, Sokhna, (Suez Canal), Damietta, Ambarli, Izmit, Mersin, Damietta, (via Suez), Singapore, Kaohsiung, and Ningbo, starting with Yang Ming's 11,714 teu YM Trust at Ningbo on 13 November. The revised MD1 will turn in 84 days and will deploy 12 ships of 11,700 to 14,000 teu from Yang Ming, compared with 16 ships on the present Cape route. Shipping lines turned away from Suez and diverted vessels round the Cape of Good Hope in late 2023, after the Houthis began attacking vessels in response to Israel's conflict with Palestine. In recent months, vessel capacity constraints, and competitive pressures following a temporary easing of regional security risks, have convinced shipping lines to resume Suez crossings. Israeli carrier Zim is the only major shipping line sticking to the Cape route, possibly due to its nationality. HMM's spokesperson told The Loadstar South Korea's flagship carrier had assessed the risks before deciding to resume Suez transits. She said: "This matter was decided and agreed upon from a Premier Alliance perspective, following a comprehensive review of market conditions and safety aspects." Linerlytica said: "All three main carrier alliances, along with MSC, are set to make a full return to the Suez by Q1 27, leaving Zim as the only main carrier left on the Cape route." The Gemini Cooperation partners, Maersk and Hapah-Lloyd, have also signalled a full Suez resumption by Q1 27, and launched a new Asia-Mediterranean service that passes through the canal. The shortened sailing times do not augur well for Asia-Europe and Asia-Mediterranean rates, however, with the 1 November price hikes failing to gain traction, and further rate declines are expected in the coming weeks, as supply growth is not outpacing growth in demand. With this, shipping lines are also adding more Red Sea calls to capitalise on rising Shanghai-Persian Gulf rates. Evergreen is relaunching its China-Red Sea service on 12 November to coincide with the resumption of its Suez transits. The OGRD service will call at Qingdao, Shanghai, Ningbo, Shekou, Singapore, Jeddah, Sokhna, Aqaba, Jeddah, Port Klang, and Qingdao. The service will turn in 56 days but will initially only deploy four 7,000-9,000 teu ships, operating on a fortnightly basis starting with the 7,024 teu Ever Superb at Qingdao. MSC has extended its Far East-Indian subcontinent Shikra service to Khor Fakkan in the UAE and Oman's Sohar port, as it capitalises on the high demand and freight rates to the Middle East, despite severe congestion at these ports. The first Khor Fakkan call was made on 18 October, by the 24,346 teu MSC Micol under the new Shikra rotation that calls at Dalian, Xingang, Qingdao, Shanghai, Ningbo, Nansha, Singapore, Nhava Sheva, Mundra, Khor Fakkan, Sohar, and Dalian. The extended service will turn in 15 weeks, using up to 15 14,000-24,000 teu ships. The largest of them will call at the western Indian ports as well as Khor Fakkan and Sohar. These ships will face severe delays, especially at Khor Fakkan, with waiting times of more than two weeks to berth.