According to the latest data from the International Air Transport Association in 2024, global air cargo demand has achieved double-digit year-on-year growth for eight consecutive months. The upward trend in Asia is more significant, with a year-on-year increase of 17.6% in air cargo demand in the Asia Pacific region.
The major trade routes in Asia continue to maintain vitality. The trade routes of inland Asia, Europe Asia, Middle East Asia, and Asia Africa increased by 19.8%, 17.9%, 15.9%, and 15.4% respectively. The transportation capacity increased by 11.3% year-on-year. The momentum of active growth is constantly emerging, and the driving force behind it is the development of business.
These data show that despite the impact of geopolitical and economic uncertainty risks, the air cargo industry still maintains a high degree of resilience. However, what drives the expansion of demand? Are there any unfavorable factors in the next year that will hinder further growth in demand?
In the view of Pei Jiahua, President of FedEx Asia Pacific, the air cargo industry will present the following three major trends in 2024:
Trend 1: Air freight will continue to benefit from restricted sea freight
At the recent aviation summit, the dialogue focused on the game between air and sea transportation. In recent months, the sharp decline in maritime transport capacity has caused serious damage to trade. Recently, the so-called "perfect storm" claimed by many has swept across the entire shipping industry. The peak season for shipping has already begun, but a series of severe weather conditions in Asia have further exacerbated the ongoing impact of disruptions in Red Sea shipping.
The various pressures of maritime transportation not only lead to the formation of supply chain bottlenecks, but also clear the excess capacity in the market. And this also has a serious chain reaction on sea freight prices.
The result is usually that the air cargo industry fills some of the capacity gap. In order to cope with delays in sea freight or temporary inability of goods to arrive, companies have to adjust their supply chain plans, resulting in an increase in demand for air freight. As sea freight demand continues to be squeezed, FedEx expects air freight demand to remain strong.
Trend 2: High growth areas will continue to receive high attention
The aviation industry still has a responsibility to ensure that specific cargo needs are met, including airport operations. The industry should focus on high-value and high growth niche markets, while also maintaining agility and utilizing its own advantages to seize future growth opportunities.
This means that the aviation industry needs to focus on multiple areas, including expanding runways, upgrading infrastructure, etc., to ensure that aviation hubs have the tools and expertise to transport special cargo.
Taking Hong Kong International Airport, one of the busiest cargo airports in the world, as an example, it is the first airport to receive the Independent Centre of Excellence for Medical Logistics (CEIV) certification from the International Air Transport Association. This certification covers the ability to handle high-value goods such as drugs, perishable items, live animals, and lithium batteries.
With the surge in transportation demand in the lithium battery and semiconductor industries, more and more air cargo hubs need to upgrade their processing facilities to ensure the safe transportation of these materials.
With the continuous development and growth of the Asian pharmaceutical industry, this will drive the sustained growth of cold chain transportation and biopharmaceutical transportation, which require high precision and specialization in storage and transportation.
Trend 3: The race to make the air cargo industry more sustainable is accelerating
More and more planes are transporting goods by air, which means it is necessary to control global carbon emissions. As demand increases, companies must support the upgrading of the aviation industry to jointly build a better future. The global aviation industry is committed to achieving net zero emissions by 2050, and greener aviation fuels are crucial to achieving this goal.
However, many people point out that the road to achieving net zero emissions is long and difficult. A major obstacle is the shortage of sustainable aviation fuel - or the lack of capacity for rapid and large-scale production. To address this issue, commercial and cargo airlines have signed important cooperation agreements with other aviation industry participants to concentrate resources and promote development.
With the increasing volume of passenger and cargo aircraft transportation, the demand for decarbonization is becoming increasingly urgent, and decarbonization actions in the aviation industry will also become more active. Environmental advocates and environmentally conscious consumers will exert more pressure on this, which will also help drive change.
FedEx continues to implement FedEx ? Fuel Sense Plan to reduce aircraft fuel consumption. Other measures to promote decarbonization and achieve the company's 2040 carbon neutrality goal include electrifying ground transportation vehicles and researching natural carbon capture methods.
Obviously, collective efforts are crucial in shaping a more sustainable future for the aviation industry. Innovation will be at the core of it. Studying and adopting innovative measures for sustainable development means driving technological progress and building a greener and more efficient future.
While grasping these trends, enterprises also need to manage the uncertain macroeconomic environment. Therefore, being flexible in responding to various situations and being adequately prepared will be the key. FedEx firmly believes that strong partnerships are also key to promoting innovation, transformation, and growth.