08 Oct Air Freight Industry – Growth, Trends and Forecast (2019
Market Overview 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. According to airline association IATA, cargo volumes grew by 4.1% to 63.7m tonnes in 2018 but, the industry forecast suggest that will then slow to 3.7% to 65.9m tonnes in 2019. In terms of freight tons-kilometers (FTK), Airfreight returned to growth in March 2019 after three months of year-on-year declines. However, the cargo sector is expected to benefit from lower costs in 2019. Finally, overall cargo revenues are expected to reach USD 116.1bn in 2019, up from USD 109.8bn in 2018.
New York, Oct. 08, 2019 (GLOBE NEWSWIRE) — Reportlinker.com announces the release of the report “Air Freight Industry – Growth, Trends and Forecast (2019 – 2024)” – https://www.reportlinker.com/p05821499/?utm_source=GNW
Furthermore, 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 headwinds such as fallen global trade volumes, global economic activity and weakening consumer confidence indicates further declines. But, the market is expected to grow owing to factors such as strong demand for manufacturing exports, and increased penetration of advanced technologies in the value chain. In addition, the global growth rate takes places in the e-commerce sector is expected to reinforce growth prospects over the forecast period.
Scope of the Report
A complete background analysis of the global air freight industry, which includes an assessment of the sector and contribution of the sector in the economy, market overview, market size estimation for key segments, key countries and emerging trends in the market segments, market dynamics, and key air freight parameters are covered in the report.
Key Market Trends
Emergence of E-commerce Propels Demand for Air Freight Services
Despite being a costlier mode of transportation, the growing demand for perishables, chemicals and valuables, and the rising demand for just-in-time production of goods has created a massive demand for air freight services. Today, air freight is being impacted by the rise of e-commerce from both B2B and B2C perspectives. The evolving e-commerce has put pressures on sales channels for faster delivery and optimum supply chain. This scenario brings opportunities for the 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 includes air cargo service as a critical mode of transportation. Furthermore, the growth in the global cross-border e-commerce is anticipated to boost the demand for the air cargo industry.
Industry major e-commerce players are disrupting the traditional logistics supply chain with some innovative measures and try to become independent. Amazon seems to be leading this race by following a different strategy. With Amazon Flex, Seller Flex, or the Amazon Prime Air program, the retail giant is trying to dominate the supply chain for its own services. As a result, they can reduce costs and become independent from their current logistics service providers. As per the tech sources, it is no wonder if the company even go a step further and offer shipping services to third parties not represented on their website.
North America is the fastest growing air cargo market and APAC Accounted for Largest Share
As per the current statistical sources, North America registered significant growth rates in the year 2018. In terms of freight tonne kilometers (FTK), North America grew 6.4% in 2018 when compared to 2017 figures, followed by Latin America (5.9%). Significantly, this is far higher than the global average (3.5%). Airlines based in North America were the strongest performers in January 2019. A robust performance from the US economy which has supported jobs growth and consumer spending has been an important contributor to recent cargo market outcomes for carriers in this region. Air freight industry is a key part of the transportation and logistics industry. With the growing e-commerce trends, the demand for the air cargo services is increasing significantly and more cargo is moving across the North American borders as well as to the other regions. The recovering economies of the Latin American countries like Brazil and Argentina boosts air cargo trade between the two regions. According to industry analysts, the incoming cargo in Argentina soared with 30.9% growth, which was propelled largely due to a large increase in volumes from North America. Furthermore, as per the data collected from Hong Kong International Airport (HKIA), the cargo handled at the airport witnessed an increase of 2.8% in Oct. 2018 and the trade with North America is referred as one of the two major driving regions of growth along with South-east Asia.
However, Asia-Pacific region accounted for major market share. It is identified as a critical region for air e-commerce market, which registered a growth rate of 7.8% in 2017 when compared to 2016. China holds a major market share in the APAC region followed by Japan. The improving Japanese economy, as well as rising global demand for electronics, automotive parts, are helping the airfreight market in reaching greater heights.
The Air freight industry is moderately fragmented in nature. But the industry is dominated with some of the known major players with operations in multiple reasons across the globe. Furthermore, one of the top air cargo carriers like FedEx Corporation has footprint and air cargo hubs in major gateways. Additionally, the company also acquired regional express players to further increase its service range. On the other hand, the growing demand for air freight transportation services has opened new challenges for the air cargo service providers. Airlines need to focus on implementing fuel-efficient solutions and accommodate innovative technologies to provide cost-effective services. For the logistics players to succeed, the storage facilities need to be developed to assist the global increase in air cargo. Special economic zones (SEZ), free trade zones (FTZ), and the bonded warehouses are projected to cater significant warehousing needs for the freight moving in and out of the airport shortly.
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