Market Trends of Air Freight Industry
Growing Demand for the Air Freight Market
- The air cargo industry serves as the backbone of global commerce, facilitating the transportation of goods and interconnecting companies worldwide. Recent years have witnessed a dramatic surge in air cargo owing to the growth of the global economy, evolving consumer preferences, and technological advancements. Cross-border trade stands as a primary driver behind the current market growth, expected to accelerate even further in the upcoming years. As global trade escalates, the demand for swift and efficient international shipping intensifies.
- In August 2023, China's Shenzhen Bao'an International Airport (SBI) experienced a twofold increase in cross-border e-commerce from January to July, anticipating further growth in the remaining five months following the inclusion of freighter flights in the airport's operations. SBI successfully managed 93,000 tons of international e-commerce in seven months, marking a 101% increase compared to the corresponding period last year.
- Partner airlines Central Airlines and YunExpress introduced a second Boeing 777 freight flight in late July, a move anticipated to significantly bolster cargo volumes. This additional freighter aims to expand the airlines' service from three to six weekly flights connecting Shenzhen and Paris.
- April 2023 witnessed the introduction of new features in digital air cargo marketplaces, allowing logistics companies overseeing imports to promptly book export shipments from agents in other countries. This development eliminates the previously time-consuming process of sourcing quotes via phone or email.
- Cargo.One announced an upgrade targeting easier booking for freight forwarders seeking overseas bookings with partners, thereby eliminating the necessity for a third party to execute the booking.
- WebCargo, a part of the Freightos companies, disclosed that airfreight wholesale distributors in China now possess the capability to directly sell space to freight agents, akin to airline partners.
- Third-party platforms, exemplified by CargoAi, enable airlines to vend their capacity in a unified platform, empowering forwarders to compare live rates and availability while electronically booking shipments—similar to how travelers shop for air seats, hotels, and rental cars online using platforms like Kayak and Priceline.
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E-commerce Growth Creating Great Opportunities for the Air Freight Industry
- The explosive surge of e-commerce during the pandemic has rendered its future trajectory unpredictable. This online shopping phenomenon has become a global norm as consumers worldwide embrace the convenience of digital transactions. IATA reports that 80% of international e-commerce relies on air transport, significantly streamlining cross-border shopping with enhanced efficiency, security, and transparency. Projections anticipate a substantial expansion in the e-commerce sector, potentially soaring to a value of USD 4.4 trillion by 2026.
- Logistics, widespread mobile device ownership, and marketplace expansions constitute pivotal factors poised to fuel this anticipated growth. Moreover, this expansion isn't confined solely to new regions but encompasses areas where online shopping has already entrenched itself, underscoring the crucial role of logistics. IATA's 2021 e-commerce monitor revealed that 18% of air cargo comprised e-commerce shipments—a figure expected to rise as consumer behaviors evolve. The air cargo industry, boasting global networks, adaptable capacity, and digitalization initiatives, stands well-equipped to bolster e-commerce growth. These initiatives promise to augment operational efficiency and shipment visibility throughout transit.
- As the global e-commerce landscape continues to burgeon, strategic partnerships, cutting-edge technologies, and robust infrastructures will dominate the air cargo arena, ensuring visibility, flexibility, and swiftness at each stage of the journey. Notably, Air Canada Cargo spearheaded an e-commerce-focused delivery division, Rivo, in March 2021. Furthermore, in July 2022, the airline inked a multi-year pact with Trexity, an on-demand delivery firm. To harness the available cargo prospects, the airline aims to deploy seven cargo aircraft by the first quarter of 2023, encompassing five converted aircraft and two production cargo aircraft.
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