Air cargo industry transforms

Canada’s air cargo sector is undergoing a dynamic transformation as geopolitical trade shifts, digitization and sustainability targets reshape how freight moves through the skies.

Valerie Khalemska, manager of national accounts at Air Canada Cargo, said one word defines the current air freight climate.

“Uncertainty is the right word for the current state of the industry,” she said, adding that global trade lane volatility is disrupting traditional routes but also creating openings for Canadian gateways to emerge as alternatives.

“Shippers are starting to avoid the more traditional gateways in the U.S., and that creates opportunity for Canada and South America.”

The ever-changing situation when it comes to U.S. tariffs continues to pose challenges to shippers and transportation providers. Most recently, U.S. President Donald Trump announced that his administration would impose 35 per cent tariffs on all non-Canada-U.S.-Mexico Agreement-compliant goods, as the two countries had not yet come to a new trade agreement.

The rerouting trend that is being seen as a result is leading to a pivot, particularly in Toronto and Vancouver, where both Air Canada and freight forwarders like EFL Global are seeing a spike in demand.

“This is the better chance in the Canadian market,” said Partheepan Vasanthan, national airfreight manager for pricing and compliance at EFL Global. “Previously, 80 per cent went to the U.S., but now we’re seeing a lot of charter flight inquiries to Vancouver or Toronto.”

Air Canada Cargo is responding to these global challenges with strategic investments in both its infrastructure and fleet.

“We placed a firm order for 18 Boeing 787-10s as part of our ongoing fleet renewal strategy,” Khalemska said. “We’ve been investing into our hubs globally with a special focus on our cold chain facilities in Toronto and London (England).”

She said Toronto remains the airline’s largest cargo hub, and pointed to substantial developments at Lester B. Pearson International Airport as a key reason why.

EFL Global is also adjusting its infrastructure to meet the rapid rise of e-commerce air freight, and aims to speed up turnaround and automation.

“Most companies are transitioning from traditional warehouses to air freight e-commerce models,” he said. “That’s our focus for the next five years.”

Tech and digitization

As air cargo operations evolve and visibility becomes more essential, real-time data, AI and automation are becoming necessary tools.

“There’s growing pressure that visibility, real-time tracking and digital integration are almost a given,” Khalemska said. “We’re leveraging real-time data and AI to track performance against customers’ KPIs and deliver more responsive solutions.”

For Vasanthan, the push toward automation and transparency is being driven more by customer expectations.

“Customers don’t want to wait. Now they expect rapid updates and automation.”

– Partheepan Vasanthan, national airfreight manager for pricing and compliance at EFL Global

Robert Khachatryan, CEO and founder of Freight Right, also noted that several air cargo carriers are increasingly relying on software such as CHAMP Cargospot and SkyChain for end-to-end cargo management and routing optimization.

“Canadian operators typically use global tracking and visibility platforms integrated with IATA’s (International Air Transport Association) ONE Record initiative, which aims for a single, standardized data exchange,” said Khachatryan. “Technologies like Descartes CORE and Unisys’ Logistics Management System enable real-time shipment tracking, status updates and customs documentation flow, which is critical given Canada’s large geography and multimodal connections.”

Jamilyn Trainor, senior project manager and owner at Müller Expo Services International, manages time-critical logistics for international installations that are often led by air cargo movements into and across Canada. He said Air Canada Cargo is an adopter of the SkyChain technology, which allows for dynamic route planning when changes to aircraft availability, weather and load adjustments necessitate planning changes.

“(Software) is also important to consider for next-level efficiency,” said Trainor. “Avoiding expectations on fuel burn and finding the highest flight yield throughout Canada’s landscape, even as routing and environmental variables specifically increase. This is also evident as seen through the stark realities across Canada in winter for routing and capacity.”

For security and customs compliance, Khachatryan said systems like eAWB (electronic air waybill) and digital cargo screening logs reduce paperwork and help carriers meet Transport Canada’s air cargo security regulations.

“Many carriers also employ integrated screening tracking software to comply with Canada’s Air Cargo Security Program,” he said.

Despite digital advances on the carrier side, customs clearance remains a key issue with air freight.

“Our Achilles’ heel is customs — everything is still paper-based,” Khalemska said. “We need to bridge the gap between paper-based processes and the seamless digital experience customers now expect.”

Greener skies

Both Air Canada and EFL Global are making sustainability central to their operations, aligning with broader industry goals of reducing aviation’s carbon footprint.

“Air Canada’s long-term aspiration is net-zero greenhouse gas emissions by 2050,” said Khalemska. “We offer a Leave Less Travel program, allowing forwarders to purchase SAF or carbon offsets associated with their shipments.”

The carrier has already begun electrifying its ground support equipment, starting with Quebec City airport.

“We’ve started transitioning our ground equipment to electric since 2019,” said Khalemska, “with full electrification of Quebec City airport’s support equipment coming by end of 2025.”

At EFL, the focus is on carbon reduction through operational efficiency.

“We always try to consolidate shipments to reduce the carbon footprint overall,” Vasanthan said. “We now have an in-house sustainability and green environment role to guide our efforts.”

Khachatryan said airlines are using emissions monitoring tools like SkyBreathe or SITA OptiClimb to reduce fuel consumption during the climbing phase and at cruise altitude.

“For cargo loads specifically, digital weight and balance software helps avoid unnecessary fuel usage due to poor load distribution,” he said. “These sustainability modules are often part of broader airline operations suites that major players like Air Canada Cargo leverage.”

Khachatryan added that platforms like Cargo.one and WebCargo are becoming more common with Canadian air cargo carriers.

“They allow shippers and forwarders to instantly compare rates and book capacity in real time,” he said. “This digital connectivity helps optimize capacity utilization and cuts down on empty space, which ties back to both profitability and emissions reduction.”

Sustainability also applies to people, as both Air Canada and EFL Global are facing a shared challenge of attracting and retaining skilled talent.

“Cargo isn’t something many young people dream of pursuing, but that’s changing,” said Khalemska. “We’re partnering with schools to attract young talent and create career pathways that help us retain them.”

Air Canada has also made DEI a strategic priority through mentorships, inclusive hiring and scholarships supporting women in aviation.

For Vasanthan, workforce development is a matter of long-term planning.

“Finding the right people is really hard, especially mid- to senior-level with deep industry knowledge,” he said. “Canada is an immigrant country. We need to give newcomers a chance, as the fundamentals of freight forwarding are the same globally.”

Looking ahead

Going forward, Khalemska said she is excited about Air Canada Cargo’s digital investments, as they have made communication seamless across the entire supply chain. However, a digital gap remains when it comes to customs.

For Vasanthan, the pace of change is what motivates him, and though challenges exist, the industry is embracing change.

“In this industry, it’s not traditional anymore, it’s a constant learning curve and that’s what motivates me,” he said. “We’re always asking, ‘What’s next, how can we do it better,’ not just for business, but for employees too.”