The global air freight market reached a volume of nearly 97.92 million metric tons in 2023. The market is expected to grow at a compound annual growth rate (CAGR) of 12% during the forecast period from 2024 to 2032. This growth is propelled by various factors, including the rapid expansion of e-commerce, advancements in technology, and the increasing demand from the pharmaceuticals industry.
Air Freight Market Outlook
According to the International Air Transport Association (IATA), there has been a significant increase in air cargo demand, with a remarkable 18.4% year-on-year growth in January. In 2023, the North America to Asia route moved 26.9% of all air cargo, highlighting the importance of this corridor in global trade. Moreover, Hong Kong International Airport processed an impressive 4,199,196 metric tons of freight in the same year, underscoring its role as a critical hub in the global air freight network.
Air Freight Market Growth Rate
Air freight refers to the transport of goods by air, facilitated by nearly all airlines. This includes two primary types of cargo: perishable and emergency items (such as food, medicines, and time-sensitive shipments) and regular non-perishable goods (such as jewellery and clothing). The rapid expansion of e-commerce has significantly increased the demand for air cargo services, particularly for time-sensitive shipments.
Furthermore, the rise of global supply chains and the manufacturing industry has boosted the need for international air freight services. The growth of the domestic air freight market is driven by the increasing demand for fast and reliable delivery of goods within countries, particularly spurred by the growth of domestic e-commerce, retail industry expansion, and manufacturing sector development.
Key Drivers of Market Development
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E-Commerce Expansion: The rapid growth of e-commerce has significantly increased the demand for air freight services, particularly for time-sensitive and high-value shipments.
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Global Supply Chains: The rise of global supply chains and the manufacturing industry has boosted the need for efficient international air freight services.
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Domestic Demand: The domestic air freight market is fueled by the increasing demand for fast and reliable delivery of goods within countries, driven by the growth of domestic e-commerce and retail industries.
Key Trends and Developments
Technological Advancements
The air freight industry is embracing technological advancements to meet increasing demands for faster and more secure services. Companies like Lufthansa Cargo have implemented IoT sensors to monitor cargo conditions in real-time, ensuring the safe transport of sensitive goods.
Expansion of Global Networks and Partnerships
Leading players such as FedEx have been actively expanding their global networks and forming strategic partnerships to drive growth. For example, FedEx's acquisition of TNT Express significantly expanded its European network and service capabilities.
E-Commerce Growth
The rise of e-commerce has propelled the demand for air freight services. Companies like UPS have developed specialized solutions to cater to this growing market segment, investing in automated sorting systems and dedicated e-commerce facilities.
Pharmaceuticals and Medical Equipment
The air freight market is being propelled by the growing demand for pharmaceuticals and medical equipment. This growth is particularly evident in regions witnessing robust growth in their automobile industries, further boosting the market.
Market Trends
Air freight providers are diversifying their service offerings to meet the diverse needs of customers across various industries. For instance, DHL offers specialized logistics solutions for the pharmaceutical sector, ensuring the safe and timely delivery of temperature-sensitive medical products.
The market outlook is also being shaped by supply chain diversification by various companies to mitigate risks. The emergence of countries like Mexico and India as manufacturing hubs is boosting air traffic and positioning air cargo as a significant mode of transport.
Moreover, airlines are increasingly extending their services to end-to-end solutions, leveraging air freight as an omnichannel to enhance market growth. The modernization of air freight and the deployment of technologies like artificial intelligence (AI), machine learning, and advanced analytics to automate operations are expected to further augment market value in the coming years.
Industry Segmentation
By Destination
- Domestic: Significant growth driven by the rise of domestic e-commerce, retail industry expansion, and development in the manufacturing sector.
- International: Dominant market contributor, driven by factors such as the growth of e-commerce, global supply chains, and the expansion of the manufacturing industry.
By Service
- Freight
- Express
- Others
By End Use
- Private
- Commercial
- Institutional
By Region
- North America
- Europe
- Asia Pacific
- Latin America
- Middle East and Africa
Market Share and Analysis
Domestic Destinations
The domestic air freight segment refers to the movement of goods within a country. This segment is experiencing significant growth due to the increasing demand for fast and reliable delivery of goods within the country. Key drivers include the rise of domestic e-commerce, expansion of the retail industry, and development in the manufacturing sector.
International Destinations
The international air freight segment involves the transportation of goods across borders, playing a vital role in global trade. This segment is driven by the growth of e-commerce, global supply chains, and the expansion of the manufacturing industry. The increasing demand for efficient and fast transportation of goods across borders, coupled with rising import and export activities among countries, is fueling the growth of the international air freight market.
Leading Companies in the Air Freight Market
Deutsche Post AG
Founded in 1949 and headquartered in Bonn, Germany, Deutsche Post AG operates as a global logistics company offering a diverse range of services, including mail delivery, parcel delivery, and comprehensive logistics solutions. It operates under various brands such as DHL, DHL Express, DHL Global Forwarding, and DHL Supply Chain.
DSV A/S
Founded in 1976 and based in Brøndby, Denmark, DSV A/S is a prominent transport and logistics company specializing in road, air, sea, and train transportation. DSV A/S provides express delivery, freight transportation, supply chain management, and specialized logistics solutions tailored to industries like pharmaceuticals and perishables.
Kuehne + Nagel International AG
Established in 1890 and headquartered in Switzerland, Kuehne + Nagel International AG specializes in logistics, supply chain management, and freight forwarding services. The company is renowned for its commitment to sustainability and providing customer-specific tailored solutions.
FedEx Corporation
Founded in 1973 and headquartered in the United States, FedEx Corporation is a global leader in shipping, transportation, and e-commerce services. Renowned for its exceptional service, FedEx Express, the world's largest cargo airline, serves over 220 countries with time-definite air-ground services.
Other key players in the global market for air freight include Schenker AG, United Parcel Service of America, Inc., The Emirates Group, Cargolux International Airlines S.A., Nippon Express Co., Ltd., and Hellmann Worldwide Logistics SE & Co. KG, among others.
Regional Analysis
North America
North America holds the largest air freight market share, with the United States leading the regional market. The market in this region is driven by the growth of several end-use industries, such as automotive, pharmaceuticals, fashion, and retail. The addition of another terminal at Mexico Airport is expected to further increase the demand for air freight in the region.
Asia Pacific
The Asia Pacific region is likely to witness healthy growth as a surplus volume of goods is expected to be supplied from China to other Southeast Asian countries. The market is also supported by rising investments in Southeast Asian nations by freight forwarders. The sourcing locations of shippers are expected to change in the coming years, with cargo traffic likely shifting from China to Vietnam, attracting more third-party logistics investments in Southeast Asian nations.
The global air freight market is poised for significant growth, driven by the rapid expansion of e-commerce, advancements in technology, and the increasing demand from the pharmaceuticals industry. As companies diversify their service offerings and leverage technological advancements, the market is expected to witness substantial development. The regional analysis highlights the potential for growth across various regions, with North America and Asia Pacific leading the way. The industry's future looks promising, with continuous innovations and strategic partnerships driving the market forward.
