As the first lockdowns kicked in, online shopping already appeared to be going stratospheric. Covid-19 simply juiced that. But then last year happened. Looking back on 2023, the theme around e-commerce had gone from euphoria to disappointment. 2022’s peak season had been muted, and many considered this unsurprising as the world reconfigured its post-pandemic axis. When it happened again, the sense was that the e-commerce inspired peak had in fact been a blip, and not a sign of things to come. Entering 2024 and commentators talked up the “muted peak” that we could again expect. There was something else going on, however. Chief executive officer of The Net Global, Mourad Aoun, says the decline that was seen in 2023 and 2022 was in part the result of “smarter sourcing by shippers”.

“Shippers had spread out demand more evenly to avoid last-minute surges,” Aoun tells Voice of the Independent (VOTI). “In fact, other factors have contributed to this trend, such as the global economic uncertainties that have played out over the course of recent years, including inflation and recession fears, making consumers more cautious and contributing to a decline of e-commerce peaks.”

Echoing Aoun, president of GLC Sophia Huluta says she too believes shippers have become “more selective and smarter” in their sourcing decisions. “Clients have invested a significant amount of time in reviewing their SKU list and pricing, discontinuing ineffective SKUs, and being very calculated about new SKUs and price points for them,” Huluta tells VOTI. “This was compounded with actual liquidation and disposal of excess inventory. So, it was a combination of a comprehensive review of SKU’s and more selective, careful sourcing decisions. Meek performances can also be attributed to consumer spending patterns, which have been much more selective than in the Covid years.”

While this lack of peak may have typified the market, there were those that upended a status quo, maintaining momentum in e-commerce. According to its president, Florent Bojarski, Canada-based Mantoria was one of those. Put to him that the preceding years were weak and this weakness – until about halfway through the year – had carried on into 2024, Bojarski tells VOTI “our reality does not really align with your first statement”.

“Our overall order fulfilment volumes have only increased in the past few years, but we have also taken on more merchants overall,” Bojarski continues. “Peak season during most of the pandemic was huge for us at a time when consumers spent more online. While we did see a drop in overall volumes during peak season, specifically during the second half of November and on until the end of December, in the past few years post-pandemic, peak season is still very much a real phenomenon for most of our ecommerce clients every year.”

Asked for specifics, he says that the majority of Mantoria clients have experienced anywhere from a two-fold to an increase of 10 times year on year in their e-commerce activities. And, he adds, “we expect for this year to be in line with the past few years, and we are already making plans to likely double our warehousing staff during the last couple of months of this year to manage the peak and ensure we meet our clients’ SLAs (Service Level Agreements).”

Nor is Bojarski’s confidence short-term, he says that he and the team do not see the trend changing anytime soon “as we expect that consumers will continue their trends of buying more than usual around Black Friday to take advantage of discounts and closer to the holidays”.

As to what 2024’s peak period has in store, co-owner of Argents, Tony Chiappetta suggests that the “only stability in shipping through 2023 and in 2024 has been instability”. Concurring with Aoun that shippers have grown more knowledgeable on how to ensure they have goods to market in a timely and efficient manner, he nonetheless notes that he still sees the market as one that is “poised to make similar mistakes” to those that resulted in surging peaks in years past.

“On the one hand they seem to have adjusted their suppliers with a keen eye on nearshoring, and they have also grown accustomed to changing ports of entry on the fly,” Chiappetta tells VOTI. “If there is a strike happening or about to happen, they are the first ones to request a reroute. On the other hand, toward the end of the pandemic inventory levels were at an all-time high, just as the general public decided they all wanted to travel instead of buy things. That hit on the balance sheet took many companies to the brink of insolvency and quite a few others did not survive it at all.”

Consequently, he says that supply chains have returned “nearly” to running on just-in-time approaches to warehouses. Of course, with the just-in-time model, if everything runs smoothly than it is a model that has shown itself to be capable, competent, and efficient. But, as Chiappetta notes, “as we all know in logistics, things very rarely run smoothly for long”. What does he think this means for the coming peak? Well, he says, it could make things interesting, pointing to looming strikes on the US east coast in a moment where container rates are already in flux due to a range of geopolitical issues, not least of which is the ongoing Red Sea crisis. Then, he points to the “fragile state” of airfreight capacity, with the massive Chinese e-commerce giants like Shein and Temu “taking an awful lot of freighter capacity, this could lead to some eye-popping rates in both modalities, albeit probably short lived”.

Building in Chiappetta’s thoughts, Aoun notes that as 2024 has unfolded, an e-commerce peak has never been certain. While inflation has, and continues to moderate, it equally continues to affect consumer spending power. Furthermore, stabilisation in supply chains compared to the pandemic has not addressed the caution that Covid generated. Given these circumstances, Aoun says he would not be surprised to once again see the traditional e-commerce peak season experience lower activity.

“However, several factors might lead to a resurgence in peak activity,” Aoun adds. “Pent-up demand could play a role; if consumers view 2024 as a recovery year, spending might surge toward the end of the year, particularly if retailers offer significant discounts to attract buyers. Evolving retail strategies could also make a difference, as retailers may adopt new approaches like more aggressive promotions or the launch of new product lines, potentially driving up demand during the holiday season. Additionally, technological innovations could impact the situation with continued advancements in e-commerce platforms and logistics technology might make handling peak demand more efficient, resulting in a rush that feels less overwhelming but still substantial.”

Huluta is more reserved on the prospects of a peak pointing to the current conditions for imported freight during “peak season”, noting that much of this cargo being slated for Q4 e-commerce peak during the holiday, she says “it is hard to see an e-commerce peak coming in Q4, and we would predict a mediocre volume for Q4”. Added to this, she notes it is important to factor in the looming elections and the impact the outcome will have not only on the US economy but the wider ripple effect it will have worldwide, “with everyone is in a cautious wait-and-see type mode,” she says, “we expect volumes to follow suit through 2024”. For Aoun, the end of year may be typified by regional variations, though.

“Over the past two years we have seen different patterns of e-commerce growth, the big growth was in domestic e-commerce in various countries and bigger flow of cross border from China with companies like Shein and Temu growing tremendously in the Middle East,” he says. “We are expecting in the Middle East a huge peak in Q4 2024 on both levels domestic and cross-border as the levels of online purchasing did not decrease despite the change in its pattern. It is important to differentiate between the online shopping in general and the cross-border shopping that differs from one continent to the other keeping in mind that China is still by far the biggest cross-border exporter in the world.”

Together with Bojarski, however, Aoun cautions that the explosion of Chinese e-commerce platforms “presents both opportunities and challenges” for logistics operators. Noting that the rise of companies like Shein and Temu offers increased shipment volumes, he says that it “also intensifies competition, which can strain small and medium sized forwarders who may struggle to compete on price, service or technology with larger players that have the scale, resources, and established relationships to handle high volumes”. Bojarski adds: “It also presents challenges especially for SME forwarders, who typically have a harder time negotiating competitive pricing based on their smaller volumes, navigating capacity constraints, and staying up to date with the latest technology trends. While we have not felt the direct impact yet, in many cases these platforms are taking away volume from orders that could be fulfilled domestically by companies like us, so for sure it is having some impact on the general market in Canada and other countries. The increase in ecommerce shipments moving by air from China among other markets will likely contribute to airfreight capacity constraints especially during peak, that may drive up rates and reduce capacity available for other industries such as pharma.”

Aoun adds to Bojarski’s point by noting that sectors, such as pharma, rely on dedicated logistics services for the safe and timely delivery of sensitive goods. As logistics companies prioritise high-volume, lower-margin e-commerce shipments, he warns that securing capacity for more specialised services becomes increasingly challenging and opens up the potential of bottlenecks forming. All of which leaves Chiappetta asking the question of whether or not e-commerce in the air sector is sustainable, from both and environmental and financial perspective.

“Those planes are in high demand coming out of China – estimates are there are 50 to 80 freighters a day worth of e-commerce packages that depart China for the rest of the world,” Chiappetta says. “As players besides Shein, Temu and Ali expand outside China and the APAC region, does that take out additional freighter capacity? For SME forwarders it continues to drive down the idea that we all need a niche. If you are playing in the world of e-commerce, as we are, you need to find a further value to provide to the customer. For Argents that has been warehousing, pick and pack and other value add services that can then entice our customers to utilize us for the actual airfreight as well. For others it could be bulk section clearances, consulting, or even assisting with sourcing. We need to continue to evolve, think on our feet and adapt to change quickly. Which is exactly what SME forwarders are good at.”

Huluta considers the rise of the Chinese e-commerce platforms as having left the industry in a “very interesting moment”, particularly with a corresponding rise in shippers and supply chains providers catering to these platforms. She notes that it has now become increasingly common for Chinese manufacturers to completely cut out the US importers and sell directly to these portals, leading to a rise in Chinese logistics companies opening USA branches.

“The e-commerce market is now selling ocean freight on an all-in per pound basis with door-to-door service on what has notoriously been LCL cargo per cubic metre,” Huluta continues. “This is a very dangerous and illegal practice as we see a consolidation of multiple suppliers' cargo onto one commercial invoice, one house bill of lading, and one customs entry with incorrect cargo descriptions and, oftentimes, value is declared. In many ways, this has been negative for the freight forwarding community as it has changed the prototypical pricing model for US-based clients, reducing margins due to improper handling.”

For drone developer Dronamics, the upending of global supply chains that the rise of the Chinese e-commerce platforms has created represents something of an opportunity, however. By most estimates, cross-border shipments are now taking up about one-third of global long-distance cargo aircraft capacity. A spokesperson for the drone firm notes that while date-driven demand predictions can help, with e-commerce being a b2c driven sector, “fickle consumer demand, not to mention geopolitics, are quick to move the dial”. “What we do know is that the process gets more complex and expensive the further away you are from big logistics hubs,” the spokesperson tells VOTI. “This is where a cargo drone solution like the one we have developed at Dronamics can make a tangible difference, reaching remote and underserved communities faster and cheaper.”

Pointing to Dronamics recent partnership with Qatar Airways Cargo, The spokesperson compares the agreement to the workings of the bloodstream. If Qatar Airways Cargo serves as the arteries, they say, the Dronamics “acts as the veins of cargo”. “Long distance cargo arrives on their freighters into one of Europe’s major hubs, where some of it can continue its onward journey to regions underserved by air freight, via a cargo drone,” they continue. “That makes possible same day delivery for regions like islands in Greece, for example. It also allows e-commerce vendors to take a more on-demand approach to shipments, shipping goods after they have been sold vs holding inventory in every location they plan to sell at, making them more competitive and quicker to react to e-commerce demand.”

Looking back on the company’s decade-long involvement in ecommerce order fulfilment and related logistics, Bojarski says that during this time, Mantoria has seen an “incredible amount of change” in the industry, noting that much of this has been driven more by consumer demand and evolving expectations. Looking forward he says: “The general market is shifting towards demand for faster, more flexible, and technologically advanced fulfilment services. Operators that want to compete in this space have no choice but to look for ways to optimise efficiency in their operations by ensuring good integration capabilities with shopping carts via API, having a good Warehouse Management System in place that helps optimise floor and admin operations, and seamless integrated carrier/last mile delivery solutions that provide live tracking.”

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