SPECIAL HANDLING CODE NEEDED FOR E-COMMERCE DUE TO AIR VOLUME CONSUMPTION
E-commerce has sustained enormous volume growth over the last 18 months, commanding large portions of the global air markets. The exponential growth of the industry was kickstarted by the pandemic; and shows no signs of slowing. Retail sales are expected to top $6.3 trillion this year; with $8 trillion expected by 2027. The increase in sales is accompanied by an increase in parcel volume. 170 billion parcels were shipped in 2022, that number is projected to increase by 50% by 2027.
ELECTRONICS CITED AS KEY SAFETY CONCERN
Currently, over 80% of e-commerce goods are transported via air, marked as general cargo. Due to their designation as general cargo, airlines do not know the contents of each package. This lack of insight is particularly problematic given the quantity of electronics being shipped. Electronics usually contain lithium batteries which must be declared when shipped via air because they are known to overheat, catch fire, or even explode if damaged or defective.
CURRENT CUSTOMS RULES PROVIDE LOOPHOLE
Most of the air capacity out of China is secured by large Chinese-owned e-commerce companies to serve their online shopping demand in North America and Europe. These Chinese companies look to take advantage of the de minimis rules which allow the import of goods valued at $800 or less without having to file a  formal customs entry or pay duties and taxes.
AIRLINES SUPPORT NEW CODE IMPLEMENTATION
Recently, airlines have asked the International Air Transport Association (IATA) for a special handling code for e-commerce shipments to mitigate false labeling attempts by shippers seeking to misuse de minimis. An e-commerce executive for an air freight company noted that online orders account for around 20% of global air freight volume. Due to the market share seen by e-commerce volume, it is imperative in the eyes of air freight providers that a dedicated platform is created through a special code to classify these goods. A special handling code would dictate the way cargo is handled, similar to categories like live animals or perishables. E-commerce is unique in that the goods involved are pre-sold to consumers who expect shipments to move quickly and with transparency. Â Online shopping platforms are more hesitant to support the implementation of an e-commerce specific platform as they are worried about increases in handling costs.
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