MIAMI BEACH, Fla. – Express shipments will account for a quarter of all air cargo business by 2043 as e-commerce sales growth outpaces general cargo by a wide margin, contributing to a two-thirds increase in the global freighter fleet to meet shipping demand, according to Boeing’s latest outlook.
Interest in factory-built cargo jets and passenger-to-freighter conversions is also rising, despite the broad availability of international widebody passenger flights with copious shipment space, because dedicated freighters give businesses greater flexibility and schedule reliability, the aerospace manufacturer said in its World Air Cargo Forecast last month.
Global economic growth, supply chain diversification to countries besides China and the relentless appetite for e-commerce will push airfreight shipping volumes to grow at an annual rate of 4%, with air traffic to double in 20 years, according to Boeing’s analysis. The industry has grown at an average of 2.6% per year over the past two decades.
The transport of business-to-consumer online purchases, which has accelerated since mid-2023 as Chinese marketplaces ramp up direct-to-consumer fulfillment, is a game changer for the air cargo industry. Global e-commerce sales have doubled over the past five years to more than $6 trillion and continue to grow about 9% annually, with the fast growth in the emerging markets of South Asia and Southeast Asia, according to eMarketer. And they will be the dominant driver of air cargo growth during the next two decades. Boeing said express carriers, which offer the speed e-commerce shippers require, will see volumes grow 5.8% per year compared to 3.6% for general cargo – a 33% difference. General cargo is typically defined as larger, bulky shipments that are booked by 3PLs.
With a greater role in e-commerce distribution, express carriers are expected to handle 25% of air cargo volume in 20 years, up from an 18% market share today, according to Boeing’s forecast.
Other broad trends are also favorable for airfreight companies and airframers. Boeing’s cargo forecast assumes global GDP and trade growth of 2.6% and 2.9% per year. The air logistics sector will also get a lift from the rise of multinode supply chains. As manufacturers relocate factories in Asia and elsewhere to diversify production sources beyond China and avoid China tariffs, they will increasingly depend on air cargo for making timely connections possible across different stages of the manufacturing process. Five years ago, for example, 37% of air cargo exports from Asia to the United States came out of non-China markets. Today, about half of U.S.-bound exports from Asia are from countries other than China.
East and South Asia will see the highest traffic growth per year, powered by robust economic expansion and consumer demand, while India’s domestic air cargo market will nearly quadruple as express and e-commerce networks expand, according to Boeing.
“The beauty of it for air cargo is airplanes are imminently redeployable, and so as supply chains shift so can air cargo and freighter networks that carry those supplies across the global supply chain,” said Darren Hulst, vice president of commercial marketing at Boeing, during the report’s unveiling at The International Air Cargo Association’s trade show here last month.
Greater shipment demand will result in the global air cargo fleet rising to 3,900 units, up from 2,340 aircraft in 2023, Boeing estimated. The number of large widebody freighters will nearly double, up from 75% growth in Boeing’s previous forecast two years ago. Nearly half the freighter deliveries over the next 20 years will be for fleet replenishment as carriers phase out older, less efficient aircraft.
About 600 to 650 large freighter aircraft, with payloads of 80 tons or more, are currently in operation. About half of them will reach retirement age in the next three to five years, said Hulst.
Airframers will deliver 2,845 freighter aircraft in the next two decades, with about 70% of them aftermarket conversions of used passenger aircraft. The most freighters produced (1,250) will be in the standard-size category ideal for short-haul and regional express networks. Large freighters will count for 810 deliveries, followed by medium widebody freighters (795). Boeing said its estimate could change by up to 400 aircraft in either direction depending on how global events shape the market.
The reason for deliveries varies by region. The fleet in the Asia Pacific region will double over the next 20 years because of the projected economic growth there, whereas in North America most new aircraft deliveries will be for replacement.
Although large freighters have historically come from both factory production and conversion, Boeing said future demand will favor production models because they offer carriers superior efficiency, lower unit costs, higher utilization and greater capability. It should be noted that three groups are gearing up to begin first-ever conversions of the Boeing 777, an intercontinental airliner. Large widebody freighters account for more than three-quarters of global dedicated freighter capacity.
In its previous forecast, Boeing had predicted the freighter fleet would reach 3,610 units in 2014 and need just under 2,800 additional aircraft. In a separate briefing for reporters, Hulst said the slight decrease in projected cargo aircraft over 20 years is because newer aircraft are providing higher productivity and utilization, thereby reducing the need for as many freighters.
The value of dedicated cargo jets is underscored by the fact that more cargo is currently carried on main-deck freighters than prior to the COVID crisis and that airlines operating freighters generated 90% of total air cargo industry revenues in 2023, Boeing said in its report.
More than 70% of air cargo traffic between 2020 and 2021 was carried by freighters due to the significant reduction in passenger flights during the pandemic. The freighter share of the market decreased to 60% during the following two years as the passenger industry slowly recovered. Now main-deck freighters are back to their traditional level, hauling about 54% of air cargo volumes. Hulst said the share of main-deck traffic will remain at that level, or inch up slightly, in the near and medium term even though passenger capacity has swelled the past two years. The preference for dedicated long-haul freighters is strongest on Asia trunk routes to North America and Europe, where nearly 80% of all air shipments move on all-cargo aircraft. The main-deck share of cargo volumes in the trans-Atlantic market is about 40%, similar to pre-pandemic levels.
Express carriers like FedEx, UPS, DHL and Amazon make up about 45% of global air cargo revenues. Combination carriers – with both passenger and freighter aircraft – represent about a third of the industry’s revenue. All-cargo airlines that focus on general cargo generate about 10% of airfreight revenue. Only 10% of revenue comes from pure passenger airlines that use their lower decks for baggage and cargo.
Hulst also pointed to the growing influence of transshipment carriers – Middle East airlines like Qatar Airways, Emirates, Etihad Airways, Turkish Airlines and increasingly Silk Way West Airlines in Azerbaijan, that take advantage of their geographic location to connect freight between two countries in different regions through their home country – on the market. Russia’s closure of airspace to Western airlines in response to sanctions over the invasion of Ukraine has helped these carriers capture more market share in the past two years. The freighter fleets for carriers with those kinds of unofficial traffic rights has grown by 50% in the past six years, Hulst said during a separate briefing for reporters.
Click here for more FreightWaves/American Shipper stories by Eric Kulisch.
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