Shippers Get On Board With Air Cargo
As ecommerce soars and global trade accelerates, the demand for air freight solutions is a boarding pass to the future. But can capacity keep up with the industry’s rapid ascent?
Airfreight demand is on the rise, growing notably as the shipping landscape increasingly prizes speed—the mode’s chief advantage.
Air cargo has ticked up steadily since 2023 and “is showing no signs of slowing down,” according to Brendan Sullivan, head of cargo for the International Air Transport Association (IATA). By July 2024, year-to-date air cargo demand had surged 13.4% above 2023 levels, setting a new record for cumulative air cargo demand this year.
“The sector continues to benefit from recovering global trade, booming ecommerce, and capacity constraints in maritime shipping,” Sullivan says.
Growing demand also puts new pressure on capacity and leads to efforts to keep up throughout the airfreight sector. Here’s a look at the complex global airfreight landscape, and the elements shaping its recent past, present and future.
Behind the Boom
Fluctuating airfreight demand leads to shifts in how shippers use air routes. Emerging markets also impact airfreight trends.
The pandemic-era shift to accelerated delivery of goods has played a central role in air freight’s demand gains.
“As fast delivery becomes the norm, customers start to see it as an expectation rather than a premium service,” says Kathy Liu, vice president of global sales and marketing for Dimerco Express Group, a Taiwan-based 3PL. “To remain competitive, businesses increasingly turn to shipping options that meet these expectations, which drives a heightened demand for air shipping.”
Ecommerce, in particular, is the catalyst. The growth in ecommerce is not only increasing airfreight demand but also influencing how capacity is distributed.
“Some ecommerce companies now directly secure space from carriers through charters and sign long-term block space agreements with commercial airlines,” Liu says. “This has resulted in less cargo capacity from commercial airlines.”
The pandemic-driven surge in ecommerce left a lasting impact on the airfreight industry, pushing companies to optimize their logistics operations to handle the increased volume of goods requiring fast transportation.
“The industry has accelerated the adoption of digital technologies to improve efficiency and transparency—including better tracking systems, automated processes, and advanced data analytics to optimize routes and loads,” Sullivan notes.
“The pandemic also highlighted the need for resilience and flexibility in operations,” he adds. “Airfreight companies are now better prepared to handle disruptions, whether due to health crises, geopolitical issues, or other unforeseen events.”
Emerging markets also play a crucial role in airfreight trends.“For nearly a decade, the ‘China Plus One’ strategy [sourcing from an additional region to diversify beyond China] has been in place, and it gained momentum due to ongoing U.S.-China tensions amid the pandemic,” Liu says. As a result, manufacturing facilities were established in a variety of emerging regions.
“However, it’s worth noting that many carriers still lack direct services from emerging markets to Europe and the United States,” Liu explains. “Instead, they rely on connecting hubs like Singapore, Hong Kong, Taiwan, South Korea, and China. This situation creates a competitive landscape for capacity between developed and emerging markets.”
Ecommerce growth from China and Southeast Asia is driving higher demand and straining capacity. By example, demand from China and Southeast Asia to Europe was up 31% year-over-year during the first week of October 2024.
“These levels already exceed volumes shipped during the traditional year-end peak season in 2023, meaning the industry is braced for an extremely challenging end to 2024,” says Wenwen Zhang, airfreight analyst at Xeneta, a rate benchmarking and market analytics platform for ocean and air freight.
Can Capacity Keep Up?
British all-cargo airline One Air is rising to meet increased demand between China and Europe by adding a third aircraft in 2024.
From a capacity standpoint, airfreight was up 1% globally according to Xeneta’s October data, though market dynamics can vary sharply at the regional and corridor level. For example, capacity from Northeast Asia to Europe increased 21% year-over-year while it decreased 6% from Europe to Latin America.
“Airlines drive revenue by shifting capacity to corridors with the highest freight rates and volumes, so a shipper’s experience of the market very much depends on where they transport goods to and from,” Zhang says.
The impact of cross-border ecommerce is most apparent in how airlines choose to deploy capacity.
“Airlines are shifting freighter capacity from corridors such as the Transatlantic, which is not used for ecommerce shipping, in favor of routes out of Asia where there is massive ecommerce demand growth,” Zhang says, noting that even businesses shipping non-ecommerce goods may still feel the impact of these massive volume increases.
“These shippers will try to identify new supply chain routes out of Asia that avoid major ecommerce hubs such as Hong Kong and Guangdong,” Zhang explains.
Airfreight demands can rise sharply for a host of reasons, leading to shifts in how shippers use air routes. For instance, Dimerco increased airfreight capacity on existing routes in response to rising demand caused by the three-day East Coast ports strike in October 2024. The company partnered with Cathay Cargo to charter a weekly flight from Shanghai to Chicago with last-mile truck delivery to a variety of East Coast destinations.
Other recent examples of carriers rising to meet capacity demand include One Air, a new British all-cargo airline that added a third 747-400 aircraft in 2024 and expects to add a fourth in 2025 for transporting freight largely between China/Hong Kong and Europe.
Another factor impacting air routes is fierce competition among Chinese companies for airfreight capacity at key hubs such as Shanghai and Hong Kong—especially for shipments to the United States and Europe.
As a result, some shippers are turning to sea-air services like Dimerco’s route from Xiamen to Taipei, followed by air freight to the United States and Europe.
“Our sea-air service allows shippers to bypass the heavy competition at Chinese hubs and leverage Taiwan’s capacity allocation for long-haul shipments,” Liu explains.
Although the ecommerce boom has led to growing air cargo demand, Liu notes that it hasn’t spurred the development of new air cargo routes. The focus is still on major hubs like Los Angeles, New York, and Chicago.
Infrastructure Focuses On Logistics
Airports like Chicago O’Hare are expanding cargo facilities to accommodate additional volume.
To accommodate rising demand for air freight, several major U.S. infrastructure projects are focused on expanding capacity and enhancing overall operations, particularly at key cargo airports. These upgrades aim to streamline logistics and support growing shipment volumes.
In late August 2024, Chicago’s O’Hare International Airport—the top cargo airport in the United States by trade value, processing more than 1.9 million tons of freight in 2023—celebrated the completion of its Northeast Cargo campus. It was designed to improve the airport’s cargo capacity and strengthen its standing as a global shipping hub.
The final phase of the Northeast Cargo campus opened for cargo operations in 2023. The project added 130,000 square feet and two aircraft parking positions to the existing cargo area. The first two phases of the project opened in 2016 and 2017, respectively, and the completed cargo campus encompasses about 900,000 square feet of facility space with parking for 13 jumbo freighters.
An ambitious cargo modernization project is in the works at Los Angeles International Airport (LAX), which ranks as the fifth-busiest U.S. airport for air cargo tonnage and has three cargo areas encompassing 27 buildings totaling approximately 2.6 million square feet.
The new plan features a two-story facility with airside access covering 1.6 million square feet of total floor space, with automated material handling equipment for improved cargo throughput. Other elements include a truck staging lot, off-site cargo support facilities, and a truck management system.
Meanwhile, construction started in 2023 on the E-Commerce and Express Freight Terminal at Ted Stevens Anchorage International Airport, the third-busiest cargo airport in the world. The new terminal is designed in part to accelerate the delivery of ecommerce packages to Alaska and the rest of the United States. The project is expected to be complete by the end of 2025.
Flying Forward
Experts say airfreight demand will rise through the end of 2024 and into 2025, spurred by increased ecommerce volumes from China and the growing demand for high-tech goods.
“The rise of artificial intelligence and the introduction of new electronics will drive demand for high-tech commodities such as semiconductors,” Liu explains. “And, as manufacturing shifts to Southeast Asia and India, more finished products will be routed through key Asian hubs like Hong Kong, Taiwan, Japan, Singapore, and Korea, potentially creating capacity challenges in the coming years.”
“Ecommerce volumes out of China during the upcoming peak season will set new records,” predicts Zhang. “We also have to factor in the ongoing impact of conflict in the Red Sea. Shippers’ concern is understandable.”
Capacity is already scarce for Q4 with most freighters fully booked and remaining flights and charter options close to selling out. “This scarcity shows how important it is for shippers to plan ahead and maintain strong communication with their freight forwarders,” Liu notes. “Early bookings and accurate forecasts will be key to securing space on flights.”
Belly Dance: The Passenger Travel Impact
Passenger travel plays a major role in the air cargo landscape.
“Demand for air passenger travel significantly impacts the airfreight market, directly affecting the availability, cost, and overall capacity of airfreight services,” explains Brendan Sullivan, head of cargo for the International Air Transport Association (IATA). “High passenger demand generally results in more belly cargo space and competitive freight pricing, while low passenger demand limits capacity, increases freight costs, and shifts reliance to dedicated cargo planes.
“As passenger demand rises, flight frequency increases, reducing the per-unit cost of transporting cargo and increasing the cost-effectiveness of belly-cargo air freight,” he adds.
What’s the current status? The share of air cargo demand served by the belly-hold of passenger aircraft was 44% industry-wide in July 2024, according to IATA.