The global air cargo market is teeming with several international, regional, and local air cargo service providers, for the market to feature a fragmented vendor landscape, observes Transparency Market Research (TMR) in a new report. These players operate as chartered services, combination airlines, and all-cargo airlines, which makes the market intensely competitive. In addition, topnotch players are likely to foray in uncharted areas to up their revenue share in the market. These players are strategizing to keep air cargo fares most reasonable, which will help expand their customer base and up revenue.
Prominent names in the global air cargo market include Cathay Pacific Cargo, FedEx Express, DHL Aviation, and UPS Airlines.
As per estimates of the TMR report, the global air cargo market is likely to be worth US$130.12 bn by the end of 2025, expanding at a CAGR of 4.9% for the forecast period between 2017 and 2025. By end user, pharmaceuticals and healthcare is likely to exhibit tremendous growth opportunities to the air cargo market. This is for urgent medical supplies to individuals affected from natural calamities and in war-torn areas. Geographically, Asia Pacific is anticipated to continue to remain leading air cargo market among other key regions.
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Open Skies Policy Boosts Air Cargo Market
The introduction of ‘open skies’ policy is positively impacting the global air cargo market. The policy primarily aims to liberalize rules and regulations in the worldwide aviation industry and calls for minimum government intervention. With the adoption of ‘open skies’ policy, trade and import-export of commodities can be faster with fewer technical hindrances. Air transport is the preferred mode for shipping perishables, chemicals, pharma products, and valuables, as it takes less time over other modes of transport and ensures timely delivery of time-sensitive, temperature-controlled goods most of the times.
The e-commerce sector is expanding at an exponential pace across the world. This would open immense growth opportunities for the air express industry in the years to come. E-tailers are engaging in partnership with air carriers to serve international shipping needs as online shopping surges the demand for shipping orders across the world.
The rising demand from just-in-time (JIT) manufacturers is another key factor acting in favor of the air cargo market. Just-in-time manufacturing involves manufacture of goods just before they are loaded in trucks. JIT enhances operational efficiency and reduces inventory. In addition, JIT manufacturing practices help optimize utilization of resources and leads to improved inventory turnover. JIT manufacturing practices are increasingly being adopted to minimize spoilage and provide goods-on-demand.
Political Volatility to Act as Key Challenge
Political instability in several countries worldwide is likely to emerge as a challenge to the growth of air cargo market. This creates an impediment for open sky policies, as governments become wary to allow free trade and other activities. Furthermore, the soaring cost of aviation fuel which directly impacts cost of air freight is a key challenge to the overall market. Nevertheless, the flourishing e-commerce sector has brought a dramatic change in shopping trends. Rising consumerism in emerging economies is leading to substantial spending on consumer goods. This is likely to offer fair chance for the air cargo market to prosper.
This post was originally published on Market Research Sheets
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