What is the current state of the air freight market according to ELINT Market Research?
According to the ELINT Market Research, air freight will likely expand rapidly. By 2023, the air transportation sector will complete approximately 57.7 million tons of transportation, anticipating continued growth until 2026.
What factors contribute to the positive trajectory of the air freight market?
The globalization of trade, the rapid rise of e-commerce, and strategic investment and development within the industry explain some of this progress.
Which region is the dominant force in the global air freight market?
North America is the leading force in world air freight and will retain its position through 2026. The rapid development of the e-commerce market in this region is a significant stimulus for cross-border online shopping, so business air freight has excellent potential.
Who are the leading players in the Air Freight Market, and what distinguishes them?
Key players in the air freight industry include Kuehne + Nagel, DHL, DSV, DB Schenker Expeditors, and UPS. These industry giants have ensured the global spread of their wings, demonstrated the efficiency of operations, and asserted that innovation is vital.
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Air Freight Market Size and Procurement Market Research Report
As per the analysis by ELINT Market Research, the global air freight market will reach about 57.7 million tons in air transportation in 2023. The fact that the industry will likely experience significant expansion in its activities over the next three years until 2026 is remarkable. Many reasons lead to the increased use of air freight services, including globalization of trade, e-commerce, and speedy and expeditious logistics services. The market is fundamental to satisfying the demand for instantaneous deliveries that businesses and customers seek.
Robust projections point to the significance of this industry as a significant player in a changing world economy and demand from stakeholders’ adjustment and development to profit from growing intra-industry trade. Such a strong growth forecast is not only about the market’s strength but also reflects the future influence of this market on global logistics. Therefore, one has to be ready to change and innovate when facing this kind of demand growth.
Market Definition
Freight is commonly known as airfreight (or air cargo). It transports different types of cargo using special-purpose aircraft. The choice is becoming a speedy, reliable, and timely mode of transport for some industries requiring quick shipments or practicing a just-in-time model. Crude oil tankers are essential to international trade, making businesses deliver goods to distant markets quickly and reliably.
Market Drivers:
Globalization and International Trade:
Globalization and the trend of international trade have significantly propelled the demand for air freight services. Businesses seek faster and more competitive transport as the dynamic market demands rise.
E-commerce Growth:
The appearance of e-commerce sites has made consumers more restless because these websites expect immediate satisfaction. As time goes by, online shopping increases, which requires the Air Freight industry to ensure prompt cross-border transportation of commodities.
Time-Sensitive Industries:
Most industries dealing with time-sensitive products like pharmaceuticals, electronics, and perishable goods prefer air freight. With air transport, moving goods promptly is very convenient so they do not get spoilt or lose relevancy.
Technological Advancements:
The advent of technological improvements such as real-time tracking systems and better communication tools has led to better air freight operations. The advancement targets improving reliability and customer satisfaction.
Air Freight Market Challenges:
Capacity Constraints:
The air freight industry needs more capacity during the peak seasons. Moreover, it could significantly increase costs and postpone shipment to some extent.
High Operating Costs:
The operational costs of fuel prices, maintenance, and labor are usually higher in air freight than other transport methods. The rise in fuel costs also has implications for air cargo carriers.
Environmental Concerns:
The past few years have witnessed increasing attention towards environmental considerations in aviation operations. Air freight is a source of greenhouse gas emissions, and addressing such concerns requires new ways to green the industry.
Air Freight Market Opportunities:
Emerging Markets:
New markets could lead to the expansion of air freight. Whenever a business operates in a new place, quality and reliable transport requirements arise.
Customized Logistics Solutions:
If airlines stand out from other providers, they must offer customized and flexible options. Tailored solutions for diverse customers in various fields can help companies build long-term relations with their clients and gain a more significant market share.
Integration of Digital Technologies:
Using blockchain coupled with artificial intelligence and predictive analytics can help boost the efficiency of the whole air fleet, reduce costs, and guarantee a high level of services.
Air Freight Market Trends:
Pharma and Healthcare Logistics:
Transporting pharmaceuticals and other healthcare-related goods represents a booming trend within the air freight sector. World health and temperature challenges are driving growth in demand for secure and temperature-controlled transport that has recently focused on the healthcare supply chain.
Use of Unmanned Aerial Vehicles (UAVs):
One of the latest developments in the airfreight sector is research on cargo transportation with UAVs. Companies are investing in developing drone technology that can facilitate faster and cheaper last-mile delivery.
Air Freight Market Segmentation:
Type of Freight: The research report segments the market according to the different kinds of freight available, which include general cargo and special cargo (Perishable goods and hazardous materials).
Service Type: The report segments the global market into freight-only airlines, integrated carriers, and charter services based on service type.
End-User: Based on end users, the research divides the market into manufacturing, pharmaceuticals and healthcare, e-commerce, automotive, aerospace, and defense.
Impactful Cost Components:
It is also essential to comprehend the cost structure of air freight for service providers and consumers. Jet fuel, labor and handling, and landing charges represent approximately 65 percent of the total cost. Fluctuations in jet fuel prices, necessitating mitigation strategies by the industry players, heavily influence the profitability of air freight operations.
Air Freight Contract Period:
Generally, such contracts in the air freight industry are valid for one year, thus giving reliability assurances to both vendors and producers. Nevertheless, the contract’s maximum duration is four years to be flexible. This flexibility enables stakeholders to keep up with market fluctuations, making the industry dynamic.
Negotiation Factors:
Various factors matter significantly in successful negotiations in the air freight sector. Critical negotiation points include fuel surcharge, terminal handling, and pre/on-carriage charges. Therefore, industry participants must keenly consider these elements and enter into profitable arrangements, ensuring optimal cost structures and service standards.
Market Maturity Regions:
The air freight market has various degrees of maturity in different regions. North America and Western Europe are high-market maturity regions with infrastructure and smooth processes. On the other hand, medium market maturity regions such as India, China, MEA, New Zealand, Eastern Europe, Brazil, and South Africa offer growth opportunities. However, they are still characterized by evolving logistical landscapes.
Air Freight Industry Payment Period:
The air freight market’s financial dynamics involve a payment period of 30 to 45 days. This period represents the careful equilibrium between the prompt payment for service providers and the economic concerns of shippers. An industry’s good relations require maintaining a stable payment structure.
Key Performance Indicators (KPIs) in Air Freight:
Performance monitoring and improvement are critical issues in the air freight market. These key performance indicators involve on-time performance, cargo damage, equipment and operation efficiency, customer service, value proposition, and IT capabilities. Therefore, tracking these KPIs allows stakeholders to analyze and enhance their operational effectiveness.
Air Freight Market Companies:
The landscape of the air freight market has a presence of prominent players operating there. Leading companies like Kuehne + Nagel, DHL, DSV, DB Schenker, Expeditors, and UPS have established global operations, demonstrated operational efficiency, and embraced innovativeness. Businesses that require dependable and quick air freight must understand these industry leaders’ strengths and capabilities.
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