The Evolution of Asia’s Air Cargo Industry Amidst the Rise of Artificial Intelligence
The global competition for supremacy in artificial intelligence is reshaping the landscape of Asia’s air cargo sector. Airlines are recalibrating their logistical networks to better align with burgeoning semiconductor manufacturing hubs, as the momentum for cross-border e-commerce wanes.
In stark contrast to the post-pandemic surge in parcel deliveries, the demand associated with AI infrastructure is bolstered by multi-year contracts for high-performance memory chips and processors.
Logistics companies, along with airline executives, anticipate substantial investments in data centers exceeding hundreds of billions of dollars.
Concurrently, stricter regulations governing low-value imports in both the United States and Europe are adversely impacting the cross-border e-commerce sphere, which has fueled significant growth within the industry.
“E-commerce once stood as air freight’s most significant growth pillar. However, that is no longer the case,” remarked Niall van de Wouw, Chief Airfreight Officer at Xeneta, following the release of the firm’s mid-year outlook.
Case Study: Korean Air’s Transition
Korean Air Lines serves as a prominent illustration of this transition. The airline reported a staggering 46% surge in cargo revenue for the second quarter, amounting to 1.54 trillion won (approximately $1.07 billion).
This increase is attributed to shipments of AI chips, server racks, and data center essential infrastructure, which have supplanted e-commerce shipments from China as the primary engine of growth.
Jaedong Eum, the Executive Vice President and Head of Korean Air’s Cargo Unit, underscored the rapid ascent of advanced high-tech cargo as a pivotal growth driver.
He noted that demand remains conspicuously strong, with orders for sophisticated high-bandwidth memory chips and processors extending two to three years into the future, all while consistently outstripping supply.
According to Xeneta, global semiconductor sales skyrocketed, more than doubling year-on-year in April—the most robust growth since records began in 1986. Conversely, China’s low-value and e-commerce exports experienced a 7% decline in May, representing the sixth consecutive month of downturn.
Changes in import regulations have fueled this shift: the United States terminated duty-free de minimis treatment for low-value imports from China last year, and the European Union followed suit by abolishing its own exemption thresholds.
Fast-fashion titan Shein indicated that these regulatory adjustments have adversely affected its U.S. operations and are expected to create further challenges in Europe.
Meanwhile, Japan’s ANA Holdings stated that the EU’s recent changes pose a downside risk for the overall cargo market—albeit with semiconductor-related shipments remaining robust.
Redefining Trade Routes Across Asia
The evolving cargo mix is also reconfiguring trade routes within Asia. Japan excels in exporting semiconductor manufacturing equipment, while South Korea is noted for producing high-performance memory chips. Taiwan stands at the forefront of cutting-edge chip production.
Emerging manufacturing and assembly hubs for AI servers are sprouting in Vietnam, Malaysia, Thailand, and Singapore, all bound for North America and Europe.
Freight throughput at Singapore’s Changi Airport has escalated by 8.7% year-on-year in the first half, driven by an unyielding global demand for semiconductors, as reported by Lim Ching Kiat, Executive Vice President for Air Hub and Cargo Development.
Airlines are strategically reorienting their operations around these new trade flows. Japan Airlines revealed that technology products have accounted for approximately 80% of the increase in air exports from Asia, excluding China, over the past year.
The airline has expanded its services to connect semiconductor hubs like Taipei, Bangkok, and Hanoi with Tokyo’s Narita Airport.
ANA has taken further strategic steps by integrating Nippon Cargo Airlines to deploy larger freighters on trans-Pacific and European routes, leveraging its Asian network to channel semiconductor cargo from manufacturing hubs throughout the region.
In Taiwan, China Airlines has initiated additional freighter flights to Southeast Asia in response to manufacturing diversification, citing a notable uptick in cargo volumes—an increase of 8.1% in the first half of the year attributed to AI-related demand.
Similarly, EVA Airways announced that AI-related shipments now account for as much as 50% of its cargo revenue.
Airline executives have noted that shipping AI hardware necessitates different handling procedures compared to traditional air freight, given the delicate nature of high-value semiconductor manufacturing equipment, graphics processors, and complete server racks.
The International Air Transport Association (IATA) projects that AI-related goods will constitute 53.5% of the value of air cargo by 2025, even as they represent merely 7% of total cargo volume.
Unlike the majority of e-commerce shipments, AI hardware is compact, extremely valuable, and often time-sensitive, warranting a premium for air transport.
To adapt to these transformative market conditions, Cathay Pacific Airways has implemented software that intelligently assesses how sensitive semiconductor equipment and AI hardware should be securely loaded within aircraft.
This burgeoning demand is also exerting pressure on cargo infrastructure. Dimerco Express Group reported that AI and semiconductor shipments had fully occupied Taiwan’s Taipei air cargo hub in July, creating tight freight capacity on routes to the U.S. and throughout Asia.
“As leading tech companies unveil next-generation AI processors and continue to commit to long-term infrastructure investments, we anticipate robust cargo demand will persist through the latter half of 2026,” stated Korean Air’s Eum.
Source link: Thehindubusinessline.com.
