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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."

Transpacific the most profitable container trade by far, says Alphaliner

Carriers are earning up to $1.30 per nautical mile on spot shipments from China to the US west coast, making the transpacific by far the most lucrative major container trade. Alphaliner's latest analysis of spot freight revenue per nautical mile highlights the growing gap between the transpacific and other major trades - returns on China-Europe routes are significantly lower, for example. Spot rates on the Shanghai-USWC route have remained between 3,063 and 3,687 points on the Shanghai Containerized Freight Index (SCFI) since the beginning of July: at around $7,500 per 40ft, current rates translate into revenue of around $1.30 for each of the 5,775 nautical miles of a voyage to Los Angeles, noted Alphaliner. Although still below the Covid-era peak of 5,110 SCFI points, recorded in January 2022, rates are at their highest since July 2024, and comparable with those seen during the pandemic boom. The Shanghai-US East Coast trade is also generating substantial returns, added the analyst, with spot rates remaining above $10,000 per 40ft since late August. This equates to around $0.96 per nautical mile for shipments to New York, via the Panama Canal - comparable with the rates of $10,000-$12,000 recorded between August 2021 and June 2022. And the carriers have responded to the strength of the Pacific market by increasing capacity, said Alphaliner. In late August, MSC upgraded its Asia-USWC Sentosa service, replacing 15,000 teu vessels with those of around 23,600 teu. Zim, which already deploys 52% of its capacity on the trade, is preparing to launch another China-California service, the ZX3, next month. By comparison, Far East-Europe services are generating considerably lower returns. Even using the shorter Suez Canal route, revenue is currently at $0.34 per nautical mile to Rotterdam and $0.50 to Genoa. For carriers continuing to divert vessels around the Cape of Good Hope to North Europe, revenue per nautical mile falls to $0.26, around 24% less due to the additional 3,309 nautical miles sailed. Latin American trades offer better returns than Europe, although they remain below the most lucrative North American routes. Shanghai-Santos currently generates $0.42 per nautical mile, while Shanghai-Manzanillo in Mexico yields $0.91. However, rates on both routes have been volatile over the past six months. Spot rates to Santos have fallen to around half their late-August level, while returns on the Mexico trade have fluctuated between $0.70 and $1.10 per nautical mile. Alphaliner said strong spot rates reflected the continued absence of spare capacity among the major carriers, with port congestion and schedule disruption preventing fleets from operating efficiently. Although carriers have begun returning to Suez Canal routings on Asia-Europe services, the consultancy said it saw no immediate signs of overcapacity, and cautioned that revenue per nautical mile did not tell the whole story, as canal charges and insurance premiums also influenced the economics of individual trades.

US importers should reconsider farming out customs paperwork, warns CargoTrans

US importers using 'delivered duty-paid' (DDP) shipping arrangements face increasing compliance and financial risks, as Customs and Border Protection (CBP) intensifies its scrutiny of foreign importers of record, according to CargoTrans. Nunzio De Filippis, co-CEO, and Rennie Alston, director of trade compliance, warned that US buyers could face penalties, shipment seizures, and refused entries, even when the firm is not named as the importer of record. During CargoTrans's latest monthly Tariff Tea webinar, the executives said the post-Liberation Day rush towards DDP arrangements was beginning to reverse, as importers reconsidered the risks of handing control of customs formalities to overseas suppliers. Under DDP, sellers assume responsibility for import clearance and associated duties. However, Mr Alston warned: "If you are the US consignee, if you are the US order party, if you are the instigator to the transaction, then you have culpability." CargoTrans said CBP was increasingly investigating whether DDP arrangements were being used to avoid tariffs, particularly where foreign sellers or intermediary platforms acted as non-resident importers of record. Mr De Filippis said some US buyers had reported shipments being refused entry, seized, or ordered for re-export, including cases involving incorrect importer information or the use of a third-party logistics provider as the ultimate consignee. Mr Alston warned that the consequences could extend beyond the overseas seller, with US buyers potentially facing penalties linked to their import bonds. He suggested companies should reconsider whether DDP remained appropriate, potentially switching to 'delivered at place' (DAP) arrangements, to retain control of the import formalities. For businesses continuing to use DDP, CargoTrans recommended demanding greater transparency from suppliers, including access to customs declarations, transaction documents, and supporting import data. Mr Alston also highlighted US record-keeping requirements, warning that buyers could not simply claim ignorance of what had been declared on their behalf. He also raised concerns about the growing volume of CBP requests for information, known as CF28s, and urged importers to investigate their records thoroughly before responding. Mr Alston said companies should avoid rushing to meet the standard 20-day response deadline, without first checking the information internally across their procurement, finance, legal, compliance, and logistics teams. A discrepancy between supplier documentation and the original customs declaration could create additional exposure if an importer inadvertently disclosed a previously unreported compliance problem. "Your response has to be measured," he said. The webinar also highlighted a shift towards CBP issuing notices of action without first requesting additional information through a CF28. Mr Alston attributed this to greater use of customs data analytics, allowing the agency officials to make decisions using information already available through the Automated Commercial Environment (ACE) system. Where importers disagree with a resulting assessment, they may need to pay the additional duties and subsequently challenge the decision through the 'protest process'. Alongside the enforcement concerns, CargoTrans highlighted several immediate tariff developments. Revisions to the US Section 338 tariff coverage for Canadian goods took effect on 30 October, removing 22 tariff classifications from the additional 50% duty, while adding 100 others. And 178 China-related Section 301 product exclusions are scheduled to expire on 9 November, potentially thereafter exposing affected imports to additional duties, unless further action is taken. The company also noted that a proposed extension of the suspension of China-linked vessel fees, until 9 January, had not yet been finalised. On freight markets, CargoTrans expected selective ocean rate softening through November, particularly from North Asia and India to the US east coast. However, South-east Asian capacity remained constrained, it noted. Finally, the company warned that rail congestion, labour uncertainty, and the planned 16-month closure of Los Angeles' Vincent Thomas Bridge could undermine inland delivery reliability. Its central message to importers was that cheaper ocean freight offered little benefit if customs exposure and inland disruption increased the overall cost of moving goods.