The air freight industry is poised for steady growth, with a projected Compound Annual Growth Rate (CAGR) of 6% between 2023 and 2030. This surge is fueled by the e-commerce boom, leading to a robust demand for cargo transportation services across the globe. However, the industry isn't without its hurdles.
A recent dip in global air cargo demand (7.7% year-on-year in March 2023) highlights the sector's current volatility. This decline, though less severe than earlier months in 2023, points to ongoing operational and economic disruptions impacting international trade.
Despite these challenges, a silver lining exists. The increasing use of belly cargo space in passenger airplanes has boosted overall air cargo capacity (up 9.9% year-on-year in March 2023). This trend, coupled with the fact that most carriers outperformed their year-over-year growth in international cargo performance (excluding LATAM and APAC regions) in 2022, indicates a resilient industry.
Sustainability is also a key focus within the air freight sector. Leading players like DHL Group, Qatar Airways, British Airways, and Delta Airlines are actively pursuing the use of sustainable aviation fuels (SAF) with a target of reaching at least 10% by 2030. Recent partnerships, such as the one between BP and LATAM Cargo Chile for a sustainable fuel flight, and the collaboration between BP, Neste, and DHL Express for supplying millions of liters of SAF, exemplify this commitment. These initiatives are projected to significantly reduce carbon dioxide emissions, contributing to a greener future for air cargo transportation.
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The air freight services market itself exhibits moderate consolidation, with the top 15 players holding a significant share (35% - 45%). Companies like DHL, UPS, FedEx, and others are strategically expanding their service offerings through partnerships with regional players. Additionally, a focus on deploying sustainable solutions and optimizing aircraft fuel efficiency remains a top priority.
Finally, from a sourcing perspective, air freight companies often leverage approved provider models. This approach helps mitigate risks and maximize value creation within the complex logistics ecosystem.
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