Atlas Air is facing an epoch-defining moment today, the US-based cargo-only carrier banking on the continuation of the post-pandemic surge in e-commerce.
Following President Trump’s ending of the de minimis exemption, permitting the duty-free import of packages valued below $800, on exports from China and Hong Kong the price of non-US goods bought online from platforms like Shein and Temu will surge.
Martin Drew, chief strategy and transformation officer at Atlas Air, said the carrier would not be panicked by the change.
“We work with a large number of ecommerce players, but a lot of this is ecommerce out of China and into Latin America, and we certainly see a lot of business opportunities for us in Latin America, but we just need to see the impact and change from the [de minimis] revocation,” he said.
“We are not overly leveraged in the US market, with our flows directed to other markets and some 90% of our business on long-term contracts.”
Mr Drew’s confidence notwithstanding, there have been indications Atlas has scaled back its operations as a consequence of a change in the US administration and the associated pivot in global trade, the end of de minimis paired with sweeping global tariffs.
Of particular note is the carrier’s ambitions for its Anchorage operations. Having last year stated an intent to hit 10,000 flights, Mr Drew described it as a “major artery” for Atlas.
Citing the 7,000 flights through the Alaskan gateway in 2023 and noting the team was working very closely with the airport “to see how to increase our footprint”, although Mr Drew refrained from citing the 10,000 flights figure as a near-term ambition.
Cirrus Global Advisors noted this week that the number of Anchorage eastbound freighter departures to the US, with the exception of those by FedEx and UPS, was down by more than seven a day.
It noted that the largest reduction was to Chicago, following by New York, with Atlas and underlying customers “off about four per day”, while a source said Atlas’s China-US capacity had fallen 8% for the last week of April.
While Mr Drew would not be drawn on Atlas’s customers, there is speculation that it provides capacity to Shein and Temu, as well as fast-fashion brand Inditex.
Even so, the sense in the industry is that the hit the carrier will take from falling ecommerce traffic does not need to be fatal, Atlas having a reputation for adaptability and ability to diversify in the face of a crisis.
Mr Drew stressed: “The reason customers commit to us is the flexibility we offer them. While we may see some impact in the short-term, we believe growth will continue. I think, at the moment, ecommerce platforms are engaging with these changes as a moment of ‘wait and see’.
“The Chinese platforms remain very active, and we are continuing to see growth in Latin America, added to which there are lots of strong flows into multiple markets.”
