Over the past two years, the volatile impact of the COVID-19 pandemic has upended expectations and challenged long-term planning and analysis for many airlines. However, the air cargo market remains resilient
E-commerce market and emerging markets boost air cargo
Air cargo capacity disruptions, strong demand for air cargo and congested supply chains have all kept air cargo volumes well above long-term averages during the pandemic. In 2021, some money flows in the air cargo space are moving three times faster than the pre-pandemic average.
As air cargo volumes gradually return to pre-pandemic levels, air cargo production has risen and global air cargo revenues have hit record highs. In 2021, air cargo revenue will be $170 billion, up from $100 billion in 2019.
Among them, mixed cargo and all-cargo aviation will see the largest increase in revenue, and the revenue of these two business segments will almost double in 2021, while the revenue of express companies and companies relying on bellyhold to provide capacity will increase by about 45%
The complex logistics of e-commerce rely heavily on local postal systems, courier networks, and even extensive outsourced delivery networks managed by retailers.
Under normal circumstances, an air cargo package will not be clearly identified by the shipper as an e-commerce package, but will be bundled with various other documents or packages. But now the rapid development of e-commerce is completely changing customer expectations for air cargo logistics.
According to estimates, by 2026, global e-commerce revenue will reach US$8.1 trillion, more than double the US$3.4 trillion in 2019 and five times the US$1.5 trillion in 2015. Strong growth in e-commerce demand will impose stricter requirements on air cargo
While e-commerce is a global phenomenon, market size and growth vary by country. In 2013, China overtook the United States to become the largest e-commerce market in the world. In 2021, China’s e-commerce market will exceed $2 trillion, and the U.S. market is estimated at $960 billion, more than twice as large in China;
The European market is about one third of the Chinese market, at $665 billion. In addition, although many emerging markets, such as India and Brazil, are currently small in scale, cross-border e-commerce and express delivery networks are experiencing rapid growth and rapid expansion
The main driving force of China’s air cargo development
In the global air cargo market, China’s air cargo market is the most prominent. In the past 20 years, China’s air cargo traffic has grown at an annual rate of 6.2%. In terms of tonnage, China’s air cargo volume accounts for 7.5% of the global air cargo volume and 2.3% of the global air cargo market share.
This is mainly because China belongs to the world’s manufacturing giant and is at the forefront of the world in the production of bulk commodities such as clothing, automobiles, computers and telecommunications equipment. Most of these commodity goods are exported and traditionally transported by air. At the same time, a series of new demands emerged, further promoting the development of China’s air cargo market.
For a long time, the air trade between China and countries in Asia, Europe and North America has grown substantially, which has become the main driving force for the continuous growth of China’s air cargo. In addition, in the past 10 years, as China’s economy began to gradually turn to consumption-driven, the rapidly growing urban consumer demand has become another important stimulus for the development of air cargo. According to relevant data, the contribution rate of the service/consumption industry to my country’s GDP has exceeded 53%.
At present, the annual transportation volume of China’s air cargo market is 4.5 million tons, second only to the United States. With the continuous transformation of the consumer economy, especially China’s air cargo activities are mainly concentrated in coastal areas and southern provinces, which are the main places where population and economy are generated. The market demand potential is huge, and the air cargo market demand will further expand.
Judging from the market growth rate in recent years, China’s air cargo market is in a state of volatility. In 2020, China’s air cargo volume will drop by 10.9%; in 2021, it will increase by 2.3%; in the first half of 2022, air cargo volume will drop by 27%, mainly due to the continued impact of the new crown epidemic policy. However, it is estimated that China’s economic growth will reach 3.8% in 2022 and 4.9% in 2023, and the air cargo market will also undergo different changes accordingly.
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