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Trends and Forecast of Global Air Freight Industry (2020 to 2025)

Trends and Forecast of Global Air Freight Industry (2020 to 2025)

While Sea freight and Road freight services still dominate the global supply chain, but according to many experts, the potential of air freight services cannot be denied. This transportation type owns the fastest growth rate in recent years and attracts a lot of investment and favorable policies from the State and Government.

In the next five years, air freight services are considered to be a "bright star" in the Logistics industry, with optimistic trends, positive rates, and a significant contribution to the economy. For the period 2020 - 2025, economics specialists have outlined the trends and forecasts for this logistics service. The details are below:

Key Market Trends

Emergence of E-commerce Propels Demand for Air Freight Services

The major e-commerce players in the industry are disrupting the traditional logistics supply chain with some innovative measures, in order 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, it can reduce costs and become independent of its current logistics service providers. As per the technical sources, the company is also offering shipping services to third parties that are not represented on its website.

North America is the Fastest-growing Air Cargo Market and Asia-Pacific Accounted for the Largest Share

As per the current statistical sources, North America registered significant growth rates in 2018. In terms of freight-ton-kilometer (FTK), North America grew by 6.4% in 2018, when compared to 2017, followed by Latin America (5.9%), which is significantly 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 supported job growth and consumer spending, has been an important contributor to the recent cargo market outcomes for carriers in this region.

The air freight industry is a key part of the transportation and logistics industry. With the growing e-commerce trends, the demand for 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, boost air cargo trade between the two regions.

Competitive Forces

The air freight industry is moderately fragmented in nature. However, the industry is dominated by some of the major players operating in multiple regions across the world. Furthermore, one of the top air cargo carriers, FedEx Corporation, has a footprint and air cargo hubs in major gateways. Additionally, the company 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 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 to significant warehousing needs for the freight moving in and out of the airport shortly.

Source: https://www.globenewswire.com/news-release/2020/07/06/2057758/0/en/Global-Air-Freight-Industry-2020-to-2025-Growth-Trends-and-Forecast.html​

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