Q3 Review of Air Freight and Logistics Sector Trends

Logistics is a multifaceted industry involving the management of the flow of goods, encompassing transportation, warehousing, and inventory management. Air freight stands as a crucial component within this sector, offering swift movement of goods across global markets. In the third quarter of the year, several trends have emerged in the air freight and logistics sector, reflecting the evolving demands and challenges faced by the industry.

Technology and Automation in Logistics

Technology continues to play a pivotal role in modern logistics, with companies investing heavily in automation and digital capacities to enhance operational efficiency. The integration of AI and robotics is becoming more prevalent, as seen with the development of Wolfpack Robots, which aid in optimizing service models and operational capacities. This shift towards automation is further emphasized by investments in AI tools that support agent efficiency, illustrating a broader trend towards leveraging technology for improved logistics processes.

The industry is also seeing improvements in real-time visibility of in-transit information, allowing for better tracking and management of shipments. Enhanced digital operations have contributed to improved delivery timeliness and service quality, optimizing last-mile fulfillment processes. The focus on automation is balanced with investment strategies, ensuring that technological advancements align with business goals.

Warehouse and Delivery Network Expansion

The logistics sector is witnessing significant growth in warehouse and delivery networks. With over 1,600 self-operated warehouses and more than 2,000 third-party warehouse owners, the infrastructure covers all counties in China, boasting an aggregate gross floor area exceeding 34 million square meters. This extensive network supports timely delivery services, such as the 2-1-1 service in core areas and next-day delivery in surrounding remote areas.

Efforts to enhance local customer experiences have been notable since April 2025, with expansions into lower-tier regions and the establishment of a spare part warehouse in Dubai. These initiatives have strengthened capacities in bulky item logistics and improved delivery timeliness and service quality. The logistics sector is also expanding its international cargo route network, with new routes like Shenzhen to Singapore enhancing global reach.

Sustainability and Market Influences

Sustainability is increasingly important in logistics practices, with companies aiming to reduce operational costs and environmental impact through efficient processes. Global trade plays a significant role in shaping logistics demand and strategies, influencing how companies approach supply chain management.

Despite efforts to enhance logistics services, the industry faces challenges such as rising insurance costs and regulatory tightening, which may constrain truck capacity. Market trends, including a cautious outlook for freight demand and pricing, have led to subdued freight demand this year. Weak government and automotive freight volumes contribute to these challenges, although there is growth in heavy haul and cross-border sectors.

Workforce and Operational Developments

The logistics sector is focusing on building a stable and consistent workforce, with efforts to hire full-time delivery riders in the third quarter. A standardized training system for drivers has been established to improve delivery timeliness and user experience. Full-time riders play a crucial role in supporting last-mile delivery, with complementary efforts in 10 core cities enhancing operational capacities.

Despite facing a flat sales performance attributed to market softness and October volumes trending below historical norms, there has been a 17% year-over-year increase in heavy haul revenue. The focus remains on core North American freight, with tighter carrier vetting due to fraud risk and a cautious approach to freight demand and pricing.

In conclusion, the third quarter presents a mixed landscape for the air freight and logistics sector. While technological advancements and network expansions offer promising avenues for growth, challenges such as market softness and regulatory changes require strategic adaptations. The industry's commitment to sustainability, efficiency, and customer experience continues to drive innovations and improvements in logistics operations.