Air Freight Services Procurement Intelligence: Unlocking New Opportunities

The air freight services category is expected to grow at a CAGR of 6% from 2023 to 2030. In 2022, the Asia Pacific region accounted for 32.4% of the total category share. Robust demand for goods industry-wide due to a rise in e-commerce is driving the demand for cargo services. However, in March 2023, according to IATA, the demand for global air cargo dropped by 7.7% year-on-year at a slower pace than in January and February 2023. Due to increasing belly freight capacity in passenger aircraft, the air cargo capacity increased by 9.9% year-on-year. Compared to March 2019, industry-wide CTKs (International) decreased by 8.1% in March 2023. Over 85% of the industry's total cargo demand is derived from International Cargo Tonnes-Kilometers (CTKs), which influence cargo traffic trends worldwide. The current volatility in this category is due to many operational and economic issues that have hampered international trade. Even yet, most carriers were able to outperform their YoY growth in terms of international cargo performance across all regions excluding LATAM and APAC in 2022.

Leaders in this sector including DHL Group, Qatar Airways, British Airways, and Delta Airlines aim to use at least 10% sustainable aviation fuels by 2030. For instance, in March 2023, BP, the parent company of Air BP, announced the sale of its ISCC EU sustainable aviation fuel to LATAM Group, one of Latin America’s biggest airlines. LATAM Cargo Chile operated the flight from Zaragoza, Spain, to North America. Similarly, in March 2022, BP and Neste announced a partnership with DHL Express to provide 800 million liters of Sustainable Aviation Fuel (SAF) until 2026. In 2022, DHL estimated that, assuming a 100% SAF usage, on approx., 800 million liters would mean 1,000 annual DHL flights between USA and Leipzig, Cincinnati, and Germany for 12 years, operated on Boeing 777s. With more such deals, DHL intends to use 30% SAF for all air transport by 2030. In an effort to curb carbon dioxide emissions, the CO2 savings would be two million tons through these collaborations. DHL states that it would be equivalent to 400,000 passenger cars’ annual greenhouse gas emissions. 

Order your copy of the Air Freight Services Procurement Intelligence Report, 2023 - 2030, published by Grand View Research, to get more details regarding day one, quick wins, portfolio analysis, key negotiation strategies of key suppliers, and low-cost/best-cost sourcing analysis

Air Freight Services Sourcing Intelligence Highlights 

• The global air freight services category is moderately consolidated with the top fifteen players accounting for 35% - 45% of the total market share. Leading players such as DHL, UPS, FedEx, Qatar, Delta, Kuehne and Nagel, DSV, DB Schenker, Bollore, and United Airlines command a major share of the market

• Leading companies such as DHL, FedEx, and UPS are increasing forward integration with regional players to expand their service offerings and concentrating on deploying various sustainable solutions to increase aircraft fuel efficiency

• Operating expenses such as fuel, direct maintenance, depreciation, and labor can account for between 40% - 50% of the total cost. Fuel and energy costs alone can account for between 12% - 18% of the total cost

• From a sourcing perspective, the companies mostly prefer approved provider models to reduce the risks and increase the potential for value creation 

List of Key Suppliers 

• DHL Group

• UPS

• FedEx Corporation

• Kuehne and Nagel

• Qatar Airways

• United Airlines

• Delta Airlines

• Singapore Airlines

• CargoLux Airlines International S.A.

• American Airlines

• Etihad Airways

• Lufthansa

• All Nippon Airways

• Emirates

• Korean Air Lines Co. Ltd.

• DSV

• DB Schenker

Browse through Grand View Research’s collection of procurement intelligence studies:

• Electric Vehicle Charging Connector Procurement Intelligence Report, 2023 - 2030 (Revenue Forecast, Supplier Ranking & Matrix, Emerging Technologies, Pricing Models, Cost Structure, Engagement & Operating Model, Competitive Landscape)

• Connected Devices and Wearables Procurement Intelligence Report, 2023 - 2030 (Revenue Forecast, Supplier Ranking & Matrix, Emerging Technologies, Pricing Models, Cost Structure, Engagement & Operating Model, Competitive Landscape)

Air Freight Services Procurement Intelligence Report Scope 

• Air Freight Services Category Growth Rate: CAGR of 6% from 2023 to 2030

• Pricing Growth Outlook: 12% - 18% (annual)

• Pricing Models: Dynamic pricing, volume-based pricing, and cost-plus pricing model

• Supplier Selection Scope: Cost and pricing, past engagements, productivity, geographical presence

• Supplier Selection Criteria: By type of cargo, features (temperature sensitive, real-time shipment monitoring), operating capability, quality measures, technology, certifications, regulatory compliance, and others

• Report Coverage: Revenue forecast, supplier ranking, supplier matrix, emerging technology, pricing models, cost structure, competitive landscape, growth factors, trends, engagement, and operating model

Brief about Pipeline by Grand View Research:

A smart and effective supply chain is essential for growth in any organization. Pipeline division at Grand View Research provides detailed insights on every aspect of supply chain, which helps in efficient procurement decisions.

Our services include (not limited to):

• Market Intelligence involving – market size and forecast, growth factors, and driving trends

• Price and Cost Intelligence – pricing models adopted for the category, total cost of ownerships

• Supplier Intelligence – rich insight on supplier landscape, and identifies suppliers who are dominating, emerging, lounging, and specializing

• Sourcing / Procurement Intelligence – best practices followed in the industry, identifying standard KPIs and SLAs, peer analysis, negotiation strategies to be utilized with the suppliers, and best suited countries for sourcing to minimize supply chain disruptions


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