Air Cargo Market Overview and Growth by 2028

The air cargo market is expected to grow from US$ 123.90 billion in 2022 to US$ 175.24 billion by 2028; it is estimated to grow at a CAGR of 5.9% from 2022 to 2028.

The air cargo market ecosystem involves the physical as well as the documentary movement of freight from the origin (forwarder) to the destination (consignee). The flows of consignments are always indistinguishable; however, the agents involved in the process could be different.

Forwarder: A company that subcontracts to a third-party and manages cargo from origin to destination. The selection of the third-party agent depends on various factors, including product lifespan, cost of cargo shipment, nature of the cargo (perishable, temperature sensitive, etc.), level of seasonality, and economic cost of the air forwarding routes.

Forwarding agent: Intermediate responsible for required arrangements and/or offers complementary services for air cargo transportation and related services on the forwarder and/or consignee’s behalf. The decision variables for forwarding agents include the security level essential by the product, the level of dangerous goods that requires specific safety measures, the requirement of specific temperature during transport, special conditions in terms of special chambers, intermodal level at the origin and destination, and required documentation.

Published Report - Air Cargo Market: Strategic Insights

Impact of COVID-19 Pandemic on Air Cargo Market

In FY 2020, despite the COVID-19 pandemic, the demand for air cargo across different regions had been driven by large transportation of medical and pharmaceutical products along with COVID-19 vaccines across different Asian countries. For instance, in 2020, Germany Airline’s cargo team was chosen to transport the Moderna and AstraZeneca vaccines from Luxembourg, Amsterdam, Bangkok, Memphis, and other locations back to Taiwan. Furthermore, in 2020, the Chinese Airlines network was also used to transport vaccines to other countries. Such operations have driven the demand for air cargo services in Europe during the COVID-19 pandemic in FY 2020. Additionally, in 2021, several air cargo vendors have also partnered with different vaccine manufacturing companies to transfer, supply, and distribute the vaccines to other countries after the vaccine development in 2021. For instance, in 2021, DHL Global Forwarding UK and ANA partnered for the delivery of Pfizer's COVID-19 vaccine across the UK. Such developments have driven the air cargo market in the FY 2020-2021. Thus, the global air cargo market growth has increased during the FY 2020.

Market Insights – Air Cargo Market

The huge demand for air cargo in Asia Pacific is attributed to the economic growth of the region and increased focus on retail enactment. Foreign players prefer Asian countries for the expansion of their manufacturing activities due to the availability of a cheaper workforce. Factors such as continuous urbanization, strong economic growth, and a large middle-class population create high domestic demand for fast-moving consumer goods, personal automobiles, household items, and luxury items. Additionally, companies in the e-commerce market opt for various logistic alternatives, including surface transport and air transport, to deliver items to their clients which is in turn catalyzing the air cargo market growth. Thus, with the flourishment of the e-commerce business, different purchase habits and trends have been noted in various countries in Asia Pacific. The proliferating e-commerce industry is likely to boost the air cargo market growth in Asia Pacific in the coming years with the rise in demand for parcel delivery services across the region.

Services-Based Insights

Based on services, the air cargo market size is bifurcated into express and regular. The regular segment, in terms of revenue, is expected to continue its dominance in the global air cargo market by 2028. A few of the factors driving the growth of the regular services segment are increasing air freight fleets across different regions. Majority of the cargo aircraft operators have been pushing their investments to increase their respective air cargo aircraft fleets. For this, the operators are focusing on implementing collaboration and aircraft lease strategies wherein the companies lease cargo aircraft models to serve many customers, which also allows them an opportunity to expand into new regions. Also, the air cargo operators that provide regular air cargo services are collaborating with aircraft OEMs to provide them with reliable aircraft products for their respective cargo operations. For instance, in May 2022, Lufthansa Cargo announced its plans to operate the Airbus A321F fly for the Group's subsidiary, Lufthansa CityLine. Such initiatives have been boosting the need for cargo aircraft fleet among the cargo operators that is likely to generate new opportunities for the air cargo market players during the forecast period.

The air cargo market size is derived on the basis of type, services, and end user. Based on type, the air cargo market is bifurcated into air mail and air freight. Based on services, the air cargo market is bifurcated into express and regular. Based on end user, the air cargo market is segmented into retail, pharmaceutical & healthcare, food & beverage, consumer electronics, automotive, and others.

Air Cargo

Published Report - Air Cargo Market Players Density: Understanding Its Impact on Business Dynamics

The Published Report - Air Cargo Market is growing rapidly, driven by increasing end-user demand due to factors such as evolving consumer preferences, technological advancements, and greater awareness of the product's benefits. As demand rises, businesses are expanding their offerings, innovating to meet consumer needs, and capitalizing on emerging trends, which further fuels market growth.

The air cargo market players are mainly focused on the development of advanced and efficient products.

• In 2022, Turkish Cargo announced that it has been investing in infrastructure and technology to provide flexible, cost-saving, and privileged shipment offers by means of three new air cargo service models that include TK SMART, TK PREMIUM, and TK URGENT.
• In 2022, Dedicated booking tiers for cargo shipments were introduced by Cathay Pacific Airways Limited as part of a suite of priority choices for its customers. Customers will have more alternatives and clearer service options owing to shipping priority, including faster shipping, more capacity, and shipment assurance.