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2024 Update Coming Soon Published Date: March 2022 Number of Pages: 132
While land and ship cargo transportation remain as favorable options, goods transport by air is considered as the quickest and the unhindered mode of transportation. cargo airlines plan to tie up with logistics service providers to create an efficient supply chain regarding freight forwarding, storage capability, and customs clearances.
Air cargo continues to face significant challenges, such as falling global trade volumes, global economic activity, and weakening consumer confidence, indicating further declines. However, the market is expected to grow due to factors, such as a strong demand for manufacturing exports and increased penetration of advanced technologies in the value chain.
The Logistics industry witnessed a huge decline in demand due to the global pandemic in 2020. The air freight shipments were fairly low throughout 2020. Economic crisis caused due to implementation of lockdowns which severely affected global air freight transports.
The sudden outbreak of novel coronavirus led to the immediate closure of national and international airways while aircrafts had to be grounded for months. During the initial stage of outbreak many countries imposed a ban on international flights, and later domestic flights were also suspended for months. Facing the decline in air freight capacity, various air freight carriers have been trying to tackle the situation by employing several strategies such as transformations and more chattered flights.
Air freight contributes to global economic development as the global economy relies on the capability to transport valuable and superior quality products rapidly to consumers across the world. Attributed to fast delivery speeds and temperature-sensitive space in aircraft, vaccines are usually sent via aircraft to help reach their required destination in time to be effective.
According to the World Health Organization, vaccination programs help prevent around 3 million child deaths annually. Air freight plays a crucial in delivering temperature-sensitive medications in the best conditions by means of state-of-the-art procedures and technologies.
To learn more about Global Air Freight Transportation Services Market, read our report
North America
The North American market, particularly the USA, will be one of the prime markets for (Air Freight) due to the nature of industrial automation in the region, high consumer spending compared to other regions, and the growth of various industries, mainly AI, along with constant technological advancements. The GDP of the USA is one of the largest in the world, and it is home to various industries such as Pharmaceuticals, Aerospace, and Technology. The average consumer spending in the region was $72K in 2023, and this is set to increase over the forecast period. Industries are focused on industrial automation and increasing efficiency in the region. This will be facilitated by the growth in IoT and AI across the board. Due to tensions in geopolitics, much manufacturing is set to shift towards the USA and Mexico, away from China. This shift will include industries such as semiconductors and automotive.
Europe
The European market, particularly Western Europe, is another prime market for (Air Freight market) due to the strong economic conditions in the region, bolstered by robust systems that support sustained growth. This includes research and development of new technologies, constant innovation, and developments across various industries that promote regional growth. Investments are being made to develop and improve existing infrastructure, enabling various industries to thrive. In Western Europe, the margins for (Air Freight market) are higher than in other parts of the world due to regional supply and demand dynamics. Average consumer spending in the region was lower than in the USA in 2023, but it is expected to increase over the forecast period.
Eastern Europe is anticipated to experience a higher growth rate compared to Western Europe, as significant shifts in manufacturing and development are taking place in countries like Poland and Hungary. However, the Russia-Ukraine war is currently disrupting growth in this region, with the lack of an immediate resolution negatively impacting growth and creating instability in neighboring areas. Despite these challenges, technological hubs are emerging in Eastern Europe, driven by lower labor costs and a strong supply of technological capabilities compared to Western Europe.
There is a significant boom in manufacturing within Europe, especially in the semiconductor industry, which is expected to influence other industries. Major improvements in the development of sectors such as renewable energy, industrial automation, automotive manufacturing, battery manufacturing and recycling, and AI are poised to promote the growth of (Air Freight market) in the region.
Asia
Asia will continue to be the global manufacturing hub for (Air Freight market) over the forecast period with China dominating the manufacturing. However, there will be a shift in manufacturing towards other Asian countries such as India and Vietnam. The technological developments will come from China, Japan, South Korea, and India for the region. There is a trend to improve the efficiency as well as the quality of goods and services to keep up with the standards that are present internationally as well as win the fight in terms of pricing in this region. The demand in this region will also be driven by infrastructural developments that will take place over the forecast period to improve the output for various industries in different countries.
There will be higher growth in the Middle East as investments fall into place to improve their standing in various industries away from petroleum. Plans such as Saudi Arabia Vision 2030, Qatar Vision 2030, and Abu Dhabi 2030 will cause developments across multiple industries in the region. There is a focus on improving the manufacturing sector as well as the knowledge-based services to cater to the needs of the region and the rest of the world. Due to the shifting nature of fossil fuels, the region will be ready with multiple other revenue sources by the time comes, though fossil fuels are not going away any time soon.
Africa
Africa is expected to see the largest growth in (Air Freight Market) over the forecast period, as the region prepares to advance across multiple fronts. This growth aligns with the surge of investments targeting key sectors such as agriculture, mining, financial services, manufacturing, logistics, automotive, and healthcare. These investments are poised to stimulate overall regional growth, creating ripple effects across other industries as consumer spending increases, access to products improves, and product offerings expand. This development is supported by both established companies and startups in the region, with assistance from various charitable organizations. Additionally, the presence of a young workforce will address various existing regional challenges. There has been an improvement in political stability, which has attracted and will continue to attract more foreign investments. Initiatives like the African Continental Free Trade Area (AfCFTA) are set to facilitate the easier movement of goods and services within the region, further enhancing the economic landscape.
RoW
Latin America and the Oceania region will showcase growth over the forecast period in (Air Freight Market). In Latin America, the focus in the forecast period will be to improve their manufacturing capabilities which is supported by foreign investments in the region. This will be across industries mainly automotive and medical devices. There will also be an increase in mining activities over the forecast period in this region. The area is ripe for industrial automation to enable improvements in manufacturing across different industries and efficiency improvements. This will lead to growth of other industries in the region.
The air freight market is being propelled by the growth in demand of pharmaceuticals as well as medical devices. Despite being a costlier mode of transportation the demand of perishables, as well as the rising demand for JIT (Just in Time) production of goods created a massive demand for air freight services globally.
The evolving e-commerce has put pressure on sales channels for faster delivery and an optimum supply chain. This scenario brings opportunities for third-party logistics and warehousing services to integrate with the air e-commerce channel.
Owing to the continued growth in online shopping, many third-party logistics (3PLs) are offering more multi-modal services, which include air cargo service as a critical mode of transportation.
The consolidated air freight option allows clients to bundle their consignment with several other items to create a full load, owing to which consolidated air freight becomes quite economical for moving the goods via plane. Moreover, consolidated freight is profitable to both delivery service companies and airlines as it is more cost-effective to fly an airplane with a full cargo load in comparison with flying an airplane with a partial load.
Air freight consolidation is the most affordable way to ship goods in a faster & safer way, and the rising popularity of consolidated air freight service is expected to drive the growth of the global air freight market over the forecast timeframe. With the testing of an autonomous tug that will transport containers from freighter aircraft to the cargo terminal, Dallas Fort Worth International Airport is taking a modest step toward future-proofing.
EasyMile, a software company that automates current vehicles, and Menzies Aviation, a cargo handling company, have agreed to collaborate on a test program in which a robot tractor with a cart will transport merchandise between an airside warehouse and a parked freighter. The airport authority isn’t directly participating in the initiative, but it acted as a facilitator when Menzies expressed interest since it has made a concerted effort to leverage technology to address societal disruptions such as electric transportation, driverless vehicles, and climate change.
EasyMile and DFW had a prior partnership dating back to when the two companies tested an autonomous bus in a secluded parking area a few years ago.The technology isn’t yet at the point where you can issue an RFP, acquire it, and have it work. So, in order to conduct a pilot and gain our own insights, lawyers were able to resolve issues about driverless vehicles operating near flights in order to finalise the agreement.
The spread of COVID, has almost halted the travel industry, which remarkably had an adverse on cargo capacity. With most planes grounded, there was no practical way to deliver the freight by air. In March and April 2020, cargo capacity declined by 22.7% and 42% annually. The belly cargo has been impacted even worse, their capacity has gone down by as much 45% in March and 75% in April.
Trends, such as rapid e-commerce, disrupted supply chains and a drastic decline in air passenger travel have acted as a boon for the global air freight market during this pandemic. However, capacity on dedicated freighters has seen the opposite change because of the conversion of passenger aircraft to cargo-only flights.
Therefore, the blend of disrupted supply chains and a drastic decline in air passenger travel has been a boon for cargo-only airlines. In 2020, the cargo load factor increased by 11.5% year-on-year in April and reached an all-time high since 1990
In 2024, The Global Air Freight Market reported a volume of XX Million Tonnes and generated revenue of $XX Billion and growing with a rate of CAGR of xx percent in terms of volume till 2030.
The increase in market size and revenue is attributed to three major factors:
Additionally, global air transport plans to tie up with logistic service providers to create an efficient supply chain concerning freight forwarding, storage capability, and customs clearance. Air cargo continues to face significant challenges, such as falling global trade volumes, global economic activity, and weakening consumer confidence, indicating further declines.
However, the market is expected to grow USD XX billion with CAGR XX% during the forecast period, due to the boosters, such as strong demand for manufacturing exports and increased penetration of advanced technologies in the value chain. In addition, the overall growth rate in the e-commerce sector is expected to reinforce the growth prospects of the market studied, over the forecast period. Currently, Top Market leaders have bases in U.S. and emerging players such as Amazon Prime Air are substantially increasing their air fleet on a higher growth rate.
In August 2021 – Deutsche Post DHL Group signed an agreement to acquire up to 100% of J.F. Hillebrand Group AG (“Hillebrand”) and its subsidiaries at an equity value of around $xx billion.
Dec 2020 – FedEx Corp. acquired ShopRunner for around $xx billion, the e-commerce platform that directly connects brands and merchants with online shoppers. ShopRunner’s capabilities will complement and expand the FedEx e-commerce portfolio and are expected to create increased value for brands, merchants, and consumers.
Sept 2021 – UPS acquired Roadie for almost $xx million, a technology platform that enables local same-day delivery with operations throughout the U.S. Roadie’s leading technology, combined with UPS’s portfolio, will open doors for new growth opportunities. Roadie’s technology platform also will provide opportunities to improve existing, and potentially add additional, UPS small package capabilities. Royal HaskoningDHV, a Dutch engineering consultant, has purchased Districon, a Dutch-based supply chain solutions company with ties to the air freight industry.
Air Canada will be able to increase freighter operations to the United States and Latin America with the installation of a third cargo jet. The third converted Boeing 767-300 cargo for the airline will arrive at the Toronto hub at the same time as the additional routes. Through the establishment of these new routes, Air Canada can more easily connect cargo from the United States to Canada, Europe, Latin America, and the Asia-Pacific region.
To take advantage of long-term growth prospects, Air Canada decided strategically during the pandemic to diversify its operations by placing a greater emphasis on cargo and e-commerce. With options for an additional six aircraft, Cargolux, a significant all-cargo airline located in Luxembourg, has sealed an order with Boeing for 10 next-generation 777-8 freighters. In comparison to current freighters, the 777-8 will produce fewer emissions, be quieter, and consume less fuel. According to Boeing, the 777-8 has almost equal payload and range capabilities to the 747-400 freight plane while offering 30% greater fuel efficiency, pollution, and operational expenses per tonne. Additionally, it makes around 60% less noise than its forerunners.
A new Chicago Air Freight Gateway was opened by Maersk in the vicinity of O’Hare Airport to provide direct planeside recovery with prompt transfers to the new facility. 70% of the U.S. can be reached by truck in an overnight trip, allowing crucial goods from Asia and Europe to arrive quickly when timing is crucial.
The new building also services Maersk’s constantly expanding, 24/7 aviation freight center at Rockford International Airport. Following Maersk’s recent acquisition of Senator International, which contributed Transatlantic experience and assets to integrate into Maersk’s North America Air Freight service to customers, the news about the Chicago Air Freight Gateway was announced.
To ensure prompt and secure handling of air freight, the new facility is a Bonded Container Freight Station (CFS) with U.S. Customs and functions as a U.S. Transportation Security Administration (TSA) Certified Cargo Screening Facility (CCSF). Import and export cargo can now be handled and sorted in a priority manner.
The world’s largest container line, Mediterranean Shipping Co. (MSC), is following other ocean carriers in entering the air freight market by launching an air cargo service. It will start an air cargo airline the following year in collaboration with freighter operator Atlas Air, joining rivals Maersk and CMA CGM as ocean carriers who have expanded their service offerings by acquiring private airplanes.
In addition to its ocean container shipping solutions, it will provide a service. The carrier intends to provide service to “important trade channels and numerous industries,” which customarily have high demands for air freight delivery. Vietnam’s first all-cargo airline, IPP Air Cargo, is getting ready to start flying. The new airline has been granted an air transport license, but before beginning operations, it must first get an air operator certificate (AOC).
In November, the business plans to begin operations with four Boeing 737-800 BCF freighters. At a time when the industry is in disarray as a result of the pandemic, IPP Air Cargo has just filed to launch an airline that specializes in freight transport with investment. Amazon.com Inc inaugurated Amazon Air, a dedicated air cargo service in India, as it seeks to expand and speed up delivery in one of its core countries amid rapidly expanding e-commerce sales. The corporation has invested in Indian cargo carrier Quikjet to transport Amazon goods exclusively across four key Indian cities.
After the United States and Europe, India is the company’s third market to debut Amazon Air. The Seattle-based company maintains a network of more than 110 planes that fly to over 70 destinations globally. Quikjet, a Bengaluru-based freight carrier owned by Europe’s ASL Aviation, already runs one plane for Amazon and will launch its second in cities including Mumbai, Delhi, Bengaluru, and Hyderabad.
Amazon, which employs its own ground delivery services for shipping, also collaborates with Blue Dart Express Ltd (BLDT.NS), one of India’s largest air freight carriers, which is managed by Deutsche Post DHL Group (DPWGn.DE).
Amerijet International Airlines has announced the debut of SmartKargo, its new cargo management system. The new web system gives the airline’s clients more options for viewing rates, capacity, and making real-time bookings. Digital transformation and automation have been at the forefront of Amerijet’s mission to bring digital innovation to its clients at every stage of the journey.
ECU360, ECU Worldwide’s digital logistics platform, has developed a new digital air freight solution to help businesses of all sizes streamline their shipping processes. The service is yet another additional value solution for ECU360’s US customers, employing technology to increase the efficiency and cost-effectiveness of air freight operations. ECU Worldwide has already served 780 US customers with air freight services, exporting to 310 airports in 174 countries.
The company has created a platform that automates the entire air freight process, from quotation to booking, with real-time tracking and live timetables. The company hopes to offer a speedier, more efficient, and cost-effective means to deliver goods globally by utilizing this cutting-edge technology. Houston Airports continues to serve the region and the United States as a top air freight destination.
The additional goods route lets the airline to offer more capacity in numerous destinations while also expanding Houston’s trade potential in Europe, the Middle East, and Central and Eastern Asia. The extension of Silk Way West’s air freight service reflects rising global demand for commodities such as petrochemical and industrial equipment for the energy industry, medical equipment, high-tech hardware, perishables, and plastics.
A.P. Moller-Maersk (Maersk) launched two new air freight services with regular flights between the United States and China. Maersk’s new customer-backed air corridor is planned to bridge a connectivity gap between the world’s two largest maritime markets, providing time-sensitive and high-value cargo options via new air services. The operation will be carried out using three newly purchased Boeing 767-300 freighters from Maersk Air Cargo’s fleet.
Maersk also inaugurated a new air freight service with Amerijet International’s regular flights between Greenville-Spartanburg, South Carolina (GSP) and Incheon, Korea (ICN). Menzies Aviation, the world’s largest aviation services firm, has been chosen by South African Airways Cargo to operate air cargo services at OR Tambo International Airport (JNB) in Johannesburg, Cape Town International Airport (CPT), and Port Elizabeth International Airport (PLZ).
In the Dominican Republic’s Punta Cana, DP World launched a new air cargo logistics center. DP World and the Punta Cana Free Trade Zone (PCFTZ), a subsidiary of Grupo Puntacana, have a contract in place to develop the new facility. The infrastructure will support multimodal air, land, and marine cargo and will feature a new logistics hub.
The logistics hub will take advantage of DP World’s vast experience in multimodal cargo management in the Dominican Republic, its world-class standards for managing logistics operations globally, as well as the excellent connectivity of the Punta Cana International Airport (PUJ) to international distribution centres. The goal is to join forces to improve connectivity within the country and across the region. The Dominican Republic becomes more alluring for industrial and logistical enterprises in the Americas and beyond the more connectivity we can create, whether by air or sea.
With this new air hub project, we can take advantage of Punta Cana’s developing transportation network and hasten the Dominican Republic’s development into the most significant logistics hub in the region. The project will be a special chance to further the economic and social development of the Dominican Republic. DP World and Punta Cana International Airport are both regional leaders in the airport, maritime, and logistics sectors.
For its air cargo product, DHL Express has introduced a new GoGreen Plus service that is optional. Customers can use Sustainable Aviation Fuel (SAF) to reduce (or “inset”) the carbon emissions associated with their cargo through the new GoGreen Plus service. Global DHL air cargo customers have the option of using the GoGreen Plus service, which allows them to customize the amount of SAF they use and the amount of CO2e reduction they want to accomplish. When compared to the conventional jet fuel it replaces, SAF, which is made from waste oils, can reduce greenhouse gas emissions by up to 80% over its lifetime.
Its GoGreen Plus service is made possible as a result of these partnerships, which are currently essential to cutting aviation’s carbon emissions. Customers can reduce their Scope 3 emissions—the unavoidable greenhouse gas emissions that arise throughout a company’s value chain, including in downstream transportation and distribution—by insetting through GoGreen Plus. They have made it easier for their air cargo customers to choose more environmentally friendly options and to make a positive difference in lowering carbon emissions by introducing GoGreen Plus.
More than 300 dedicated aircraft operated by DHL Aviation manage 18 of its own and partner airlines, which operate more than 2,400 flights each day to more than 500 airports across the world. The main item produced by DHL Express, TDI, uses the majority of the freight capacity. DHL Express sells any unused cargo space on these flights to companies that deal in air freight.
One Air, a newcomer from the UK, launched freight operations with one jumbo plane. A brand-new cargo airline based in the UK began operations with just one freighter and the distinction of being the only Boeing 747 operator in the nation.
The start of a single-aircraft airline during a freight downturn may seem like a poor time to do it, but One Air’s owners are sure that shipper interest will be generated. One Air performs unscheduled charters and transport service for airlines and logistics firms that require specialized airlift using a 747-400 jet that was originally built to carry passengers for Air Canada before being modified to a cargo configuration. It has future intentions to operate as a scheduled carrier.
They are currently beginning a regular flying programme from Asia Pacific to Europe with two 747 freighter flights each week in addition to sporadic charter flights. Furthermore, efforts are being made to expand their fleet with a second 747F, which they anticipate will start operating in early Q4. According to experts in the field, airlines perform best with at least six to eight aircraft to better spread out fixed expenses for maximum operational efficiency and cover contingencies like mechanical breakdowns and scheduled maintenance.
The recent decline of huge freighters and 747 passenger planes in the UK is one factor in the new business’ favour. Because of ownership ties to Russia and Western sanctions over the invasion of Ukraine, AirBridgeCargo was obliged to halt operating in the United Kingdom and stop using 17 Boeing 747 freight planes last year.
Additionally, the two 747-400 freighters operated by CargoLogicAir, another member of the Volga-Dnepr Group in Russia, stopped flying. It will assist in replacing the gap in air cargo capacity caused by the collapse of the last independent cargo freighter operator in the United Kingdom as a result of its forced closure by governmental authorities, and it will offer crucial cargo capacity on routes with the U.K.’s important trading partners.
Secure and dependable air freight logistics and heavy lift capabilities continue to be crucial on a national and international level as trade recovers from the epidemic and develops a new normal by adjusting to geopolitical challenges. The second freighter will come from Aerotranscargo.
One Air may be able to obtain some scale through its membership in a bigger aircraft ownership group for spare parts pooling, engines, or maintenance, but the company has not yet made any indication that such connections exist. The spring saw the issuance by UK authorities of the new airline’s air operator certificate and operating licence. The 747-400 was successfully flown in proving runs last year by One Air personnel, demonstrating their proficiency in doing so.
The global air freight industry is dominated by major players operating in multiple regions across the world. One of the top air freight carriers, FedEx Corporation, has a footprint and air cargo hubs in foremost gateways. Additionally, the company acquired regional express players to further increase its service range.
The growing demand of air transportation services has opened new challenges for air cargo service industries. Airlines are focussing on implementing new technologies like additive manufacturing instead of traditional manufacturing in the development of aircraft with fuel-efficient solutions and accommodative innovative technologies to provide cost-effective service.
In November 2020, CEVA Logistics opened a new facility in Sri Lanka, to serve the needs of consumers in the South Asian country, along with the Maldives. Both FedEx and UPS have participated in addressing the need for medical equipment during this pandemic. UPS collaborated with the Federal Emergency Management Agency (FEMA) to provide supply chain services for essential medical equipment including PPE, respirators, N95 masks, and gloves. FedEx established logistics service lines for the delivery of supplies and test kits.
For logistics players to succeed, storage facilities need to be developed to assist the global increase in air transport. SEZ (Special economic zones), FTZ (Free trade zones), cold storage facilities, and bonded warehouses are anticipated to furnish significant warehousing needs for freight forwarding in and out of the airport soon.
