Enjoy complimentary customisation on priority with our Enterprise License!
The Air Freight Market size is forecast to increase by USD 68.02 billion, at a CAGR of 6.82% between 2023 and 2028. The market's growth hinges on various factors, including the expanding e-commerce sector, heightened air freight demand, bolstered by rising free-trade agreements in Europe, and the uptick in US agricultural exports to China. These elements collectively contribute to the market's upward trajectory, reflecting shifting dynamics in global trade and commerce. With the e-commerce boom driving increased demand for efficient logistics solutions and trade agreements facilitating smoother cross-border transactions, the market is poised for significant expansion in the foreseeable future.
For More Highlights About this Report, Download Free Sample in a Minute
The market is propelled by the digital transformation of the retail industry, driving increased demand for efficient logistics solutions to meet customer expectations. Advancements in technology, including AI and big data analytics, optimize business processes and enhance retail operations, improving supply chain efficiency. However, challenges such as budget constraints and complexity hinder seamless operations. Competitors vie for market share through personalized services and innovative marketing tactics, while customer retention relies on superior customer service and predictive analytics for effective inventory management. These trends underscore the evolving landscape of air freight logistics in response to changing market dynamics. Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The growing e-commerce sector's increasing air freight demand is notably driving market growth. The growing Internet penetration and improving purchasing power parity across all regions are primarily bolstering the development of the global e-commerce industry. The US and China are the key contributing countries to the global e-commerce industry. For instance, in 2020, the business-to-customer (B2C) e-commerce industry in the US accounted for more than 10% of the overall retail sales in the US. Furthermore, the US e-commerce industry is expected to grow significantly. France and the US are the major exporters of beauty and personal care products. Indian customers buy products from various Chinese websites, such as Alibaba.com and Banggood.com.
Moreover, through cross-border e-commerce, sellers will get the opportunity to expand their businesses outside their often-saturated home market and tap into new markets. Air freight services play a major role in cross-border e-commerce as the movement of goods depends on the transportation and distribution network. Online marketplaces want to ensure that customers receive the order as soon as possible and mostly use air transportation to forward a parcel beyond national borders. This trend necessitates significant advancements in technology to enhance customer experiences and streamline retail operations while effectively managing inventory and ensuring optimal customer service. Thus, the growing e-commerce sector will drive the growth of the market during the forecast period.
Penetration of blockchain in air freight is an emerging trend shaping market growth. Blockchain technology, recognized for its secure digital data storage, operates as a distributed digital ledger, ensuring transparency and integrity in transactions. While still emerging in developed nations, it's penetrating markets like APAC, particularly in China and Japan, due to widespread technological adoption. By 2025, blockchain is forecasted to safeguard 11% of global GDP, with APAC leading its utilization. China has integrated blockchain into its economic strategy, with notable projects like VeChain and Matrix.
However, in the air freight sector, blockchain holds promise, as seen in initiatives by companies like Walmart, which tracks fresh produce shipments with blockchain sensors, ensuring transparency and accountability across the supply chain. This adoption of blockchain in air freight is expected to drive market growth, aligning with the broader trend of technological innovation in the industry.
The high cost of air freight services is a significant challenge hindering market growth. Air freight is mainly used for fast transportation of high-value goods. Generally, a buyer of the goods is given a quotation for all modes of transportation. Air freight is usually much more expensive than other modes of transportation, such as roadways and waterways. However, the shipping of the same amount of goods through sea freight costs around USD 3,000. Some of the major components of air freight costs are jet fuel surcharges, transportation costs, labor and handling costs, customs brokerage, and landing charges. A rise in fuel prices increases the overall air freight costs.
However, high labor cost also increases air freight costs. Labor costs are high in North America and Europe. For instance, labor costs account for over one-fourth of the total air freight cost in these regions. The global shortage of workers and scarcity of qualified pilots are increasing labor costs. Owing to the rise in air freight costs, most end-users, such as e-commerce companies and other manufacturers, settle for marine or land transportation, which will hinder the growth of the market during the forecast period.
The market forecasting report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Agility Public Warehousing Co. K.S.C.P - The company offers air freight solutions where goods are subject to minimal handling and to reduce the cargo through customs quickly and efficiently.
The market research and growth report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The commercial segment is estimated to witness significant growth during the forecast period. The rising demand for consumer electronics, automotive products, food products, frozen food, various agricultural products, and medical devices is the key factor driving the growth of the commercial segment in the global air freight market. However, the price of consumer electronics is decreasing in Japan and China because of the economics of scale production. The price competition among consumer electronics manufacturers in low-cost manufacturing countries, such as South Korea and Taiwan, is increasing.
Get a glance at the market contribution of various segments Download the PDF Sample
The commercial segment was the largest and was valued at USD 113.54 billion in 2018. The automotive sector is a significant revenue contributor to the global manufacturing industry. The global sales of passenger cars reached almost 85 to 88 million in 2023. The increasing consumer disposable income in countries such as the US and China is bolstering high automotive sales and production. Furthermore, to increase the production capacity and to make the supply chain lean, many automotive manufacturing countries such as Germany, Japan, the US, China, and South Korea depend on air freight transportation for raw materials. Thus, the commercial segment is expected to witness substantial growth in the market during the forecast period.
For more insights on the market share of various regions Download PDF Sample now!
APAC is estimated to contribute 35% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. The increasing demand in the retail and electronics industries in the region is the major driving factor in APAC. Retail sales are expected to increase in the future. The growth will be tremendous, especially in India and Japan, because of the support from the governments for Foreign Direct Investment (FDI) in the retail business, which is growing in these countries.
For instance, the Indian Department of Industrial Policy and Promotion provides 100% FDI for single-band retailers (entry route automatic up to 49% and government route beyond 49%). Increased retail sales are expected to augment transportation requirements. Therefore, the increasing demand for air freight in the retail sector is expected to drive the growth of the market in APAC during the forecast period.
The market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2018 to 2028.
The logistics industry, particularly air freight, plays a crucial role in transporting valuable and perishable goods like vaccines, pharmaceuticals, and high-end electronics. To ensure the safe delivery of temperature-sensitive medications, cool-chain systems and innovative technologies like robotics, AI, and IoT are employed. Key players like to offer door-to-door services via cargo planes, catering to global demand. With the rise of e-commerce and the global economy, air freight serves as a lifeline for critical goods, supported by state-of-the-art procedures and cool-chain tech. As the industry evolves, investments in automation, AI, and AR/VR streamline freight activities, offering innovative solutions for efficient transportation. Whether for domestic or international air freight, mainframe systems and consolidated services by industry giants ensure reliable deliveries, driving the market forward amid evolving global trade dynamics.
Additionally, the market is vital for transporting a diverse range of goods, from jewellery to perishables, facilitated by consolidated and domestic air freight services. Operating via aircraft, it offers various transportation modes like charter and standard services, meeting global economic development needs. Key players like The ensure efficient deliveries, considering factors like volumetric and real weight, along with terminal handling and security surcharges. Automated systems enhance market segmentation, providing door-to-door delivery options for destinations worldwide. Amidst growing demand driven by e-commerce and vaccination programs, advancements in AI, deep learning, and AR/VR technologies contribute to market growth, supporting worldwide internet retail trade and international post services.
Market Scope |
|
Report Coverage |
Details |
Page number |
157 |
Base year |
2023 |
Historic period |
2018 - 2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 6.82% |
Market growth 2024-2028 |
USD 68.02 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
5.82 |
Regional analysis |
APAC, North America, Europe, Middle East and Africa, and South America |
Performing market contribution |
APAC at 35% |
Key countries |
US, China, Japan, Germany, and France |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Agility Public Warehousing Co. K.S.C.P, Bollore Logistics, C H Robinson Worldwide Inc., CEVA Logistics S A, DB Schenker, Dimerco Express Corp., DSV AS, Expeditors International of Washington Inc., FedEx Corp., GEODIS, Hellmann Worldwide Logistics SE and Co KG, Kerry Logistics Network Ltd., Kuehne Nagel Management AG, Nippon Express Holdings Inc., Sinotrans Ltd., The Emirates Group, United Parcel Service Inc., XPO Inc., YUSEN LOGISTICS CO. LTD., and Deutsche Post AG |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID 19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by End-user
7 Market Segmentation by Type
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
Get lifetime access to our
Technavio Insights
Cookie Policy
The Site uses cookies to record users' preferences in relation to the functionality of accessibility. We, our Affiliates, and our Vendors may store and access cookies on a device, and process personal data including unique identifiers sent by a device, to personalise content, tailor, and report on advertising and to analyse our traffic. By clicking “I’m fine with this”, you are allowing the use of these cookies. Please refer to the help guide of your browser for further information on cookies, including how to disable them. Review our Privacy & Cookie Notice.