E-commerce facing its own challenges

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'Last mile' problems are still an issue for e-commerce

There are challenges to the growth of e-commerce despite the current rosy glow it is adding to the air cargo industry. This emerged during the recent Clear View 3.0 Industry Thought Leadership Summit in Bangkok.

“I think the growth will be challenged by the supply chain cost,” Cargo Service Center chairman Tushar Jani said. His company is the leading provider of airport ground handling in India.

One example Jani pointed to was e-commerce’s staggering return rate of just under a third – 32 per cent – which requires an extensive reverse logistics network. The other principal economic problem commented on but only in passing was the average value of the packages being moved.

On the procedural side an example given was the role of Customs – still struggling to define how to do their job in the e-commerce era of millions of small packages.

Or, as said Italy’s Garda Airports cargo director Massimo Roccasecca put it, Customs themselves still have to find out “what sort of beast they are dealing with.” This is also complicated by security and safety concerns – which were raised to be followed by a moment of somber silence.

The basic view of the meeting though was one of being willing to work with Customs to help them define a new role and procedures.

Less clear was the issue of last mile delivery. There was some discussion of how this is hampered by the lack of resources and the rise of variable local companies but two salient points arose. One is how it has created an opportunity for integrators. Over a quarter of their business is now e-commerce – one growing as the resources they command solves some of the problems of small packages.

The other has been the failure to deal with the resurgence of postal services as ‘last milers.’ “All the post offices in the world are already attacking,” said Roccasecca.