(Mississauga) Jamie Porteous, co-president and co-CEO of Cargojet, says e-commerce growth will fuel major business gains in the second half of the year after boosting revenue last quarter.
Mr Porteous told analysts on Wednesday that the rest of 2024 will be “much stronger” than the first six months for the air cargo company thanks to the recovery in online sales.
“We saw sequential growth quarter-over-quarter and year-over-year across all of our customers and across all three segments, largely driven by e-commerce growth,” he told analysts on a conference call Wednesday.
Revenue for the quarter ended June 30 rose more than 10% year over year to $230.8 million, the company said.
Amazon’s business has soared, particularly during the e-commerce giant’s popular “Prime Days” promotions, Porteous said.
“We had a very successful Prime week,” he said, referring to the bargain hunt in mid-July.
Amazon also asked Cargojet for a “dedicated offering” through charter flights for the online retailer’s promotions in mid-October. Last year, no chartered cargo trips were requested, Porteous said.
The market could also be ripe for more shipments between Asia – where many consumer goods originate – and Canada, where e-commerce remains less exploited than in some other developed countries.
“The request […] “The demand for e-commerce products from China has exploded somewhat this year,” the co-chair said.
In Canada, online sales now account for 11.5% of total retail sales, according to a report from transportation firm Landmark Global released in May. In the United States, that figure was nearly 16% in the first quarter, according to the U.S. Commerce Department, suggesting room for growth north of the border.
Cargojet is hoping to capitalize on that trend. Online retail sales in Canada will grow 6.8% to nearly $113 billion in 2024, according to data released last week by market research firm Emarketer. That would mark an acceleration from last year’s 5.8% growth and 3% in 2022.
A three-year deal Cargojet signed in June with Chinese company Great Vision HK Express to provide scheduled charter flights between Vancouver and China will add more than $50 million a year to its coffers, the company says.
Cargojet plans to increase its fleet to 43 aircraft by the end of next year, from 41 currently.
Two of its planes were damaged when a hailstorm tore through Calgary last week, hitting the airport. They were moved to Hamilton for repairs and are expected to be back in service before the end of the month.