Despite being buffeted by several crosswinds, air cargo has managed to steer a course toward a brighter horizon. The various elements at play will be discussed in detail at the forthcoming World Cargo Symposium.
With a double-digit increase in cargo tonne kilometers (CTK) in 2024, the sector now comprises 15.6% of industry revenues compared with 12% in 2019. The market has grown across all regions and major routes. With global trade and GDP growth stable at about 3%, a solid 2025 is in the offing. In fact, IATA estimates revenues will reach $157 billion based on a 6% hike in demand.
Moreover, yields remain about a third above 2019 levels and there are no signs that it will revert. “It does appear that there has been a structural change for the better since the pandemic,” confirms Brendan Sullivan, IATA’s Head of Cargo.
Online trade
The strength of e-commerce is a major plus point and will represent a growing portion of air cargo business. Currently, e-commerce averages about 20% of cargo business industry-wide, but it is expected to grow to at least a third of all cargo shipments. Given that, by 2027, e-commerce is expected to be an $8 trillion market segment, the sector stands to reap a significant reward if it can get its product correct.
“And that means speed and transparency,” says Sullivan. “Shippers and their customers need the goods to travel quickly and safely and to know where those goods are every step of the way.”
The added layer of transparency will come through digitalization. Air cargo’s efforts in this sphere are gaining momentum. The cornerstone is ONE Record, an open-source messaging standard that replaces legacy methodology.
ONE Record
- establishes a common data structure facilitating seamless integration across various platforms
- provides a standard way for businesses to share data, reducing misunderstandings and delays
- offers end-to-end visibility of shipments, enhancing transparency throughout the transportation chain
- enables data owners to maintain control over data quality and access permissions, ensuring data integrity
- facilitates direct connectivity between industry stakeholders through web APIs, promoting innovative IT solutions.
ONE Record is mandated for use from 1 January 2026. There are some 200 companies involved in pilots and 10 projects are at an advanced stage.
In 2024, Cathay Cargo, Airport Authority Hong Kong and IATA achieved a world-first ONE Record shipment from Dongguan for export from Hong Kong. Cathay Cargo also partnered with Dimerco Air Forwarders and GLS Hong Kong to transport semi-conductor thermal paste and monitor the condition of the shipment using a cargo tracking device and real time data sharing via the ONE Record API.
Such pilots demonstrated that improved monitoring and proactive management of shipment conditions is possible, minimizing the risk of damage. “And they increased customer satisfaction,” says Sullivan. “They have built confidence in the services offered by ensuring consistent quality and visibility throughout the shipment journey.
“Most importantly, it shows that there is a significant increase in real, operational implementations.”
Digitalization Charter
Artificial intelligence (AI) is also seeping into the sector. There are a lot of manual processes—such as acceptance—which take time and detract from air cargo’s value proposition. AI can assist in the safety and speed of the decision-making process and so improve productivity.
Innovation will be a regular feature of the sector moving forward, says Sullivan. “There will be an Innovation Showcase at WCS,” he informs. “We will look in detail at what areas would benefit and the challenges in implementation.”
To ensure that air cargo’s digitalization maintains its quickening pace, IATA—through the Cargo Advisory Council—set up a Digitalization Leadership Charter earlier in 2024. As of December 2024, there were 17 signatories.
The North Asia Digital Cargo Alliance adds strength to this effort. IATA is working with airlines in the region to see how ONE Record might perform in the Chinese market as well as other digitalization efforts.
Circularity in air cargo
Digitalization will also help the sector’s sustainability efforts. The amount of paper saved is noteworthy but there is much more being done—and much more to do. Some 24% of e-commerce is empty packaging, for example. More efficient use of space will make air cargo more productive and more sustainable.
Air cargo is making a concerted effort to reduce single-use plastic, either eliminating it entirely or at least reducing the size and thickness where possible. The sector is equally committed to recycling and working with reusable items.
In fact, circularity has a massive role to play in air cargo. Looking at the lifecycle of such items as Unit Load Devices (ULD) could reduce waste while enhancing productivity. Sustainable Aviation Fuels (SAF) are also a feature given that approximately half of air cargo is flown by passenger aircraft, many of which can use a percentage of SAF in their fuel uptake.
Last but not least, forwarders and other supply chain partners are equally committed to sustainability, helping airlines to leverage their own projects and adding to the overall drive to cut emissions and waste.
Other topics under the microscope at WCS include CEIV Pharma, which is celebrating its 10th anniversary and has been instrumental to air cargo’s success in this area. As the program grows stronger, the elements needed for another decade of success will be discussed. There will also be announcements relating to the Future Air Cargo Executive (FACE) initiative, which is preparing tomorrow’s leaders.
Geopolitical tension
As ever in aviation, there are downside risks. The most obvious for air cargo is the threat of trade tariffs being imposed by the United States, which would clearly affect the amount of goods carried in the long term. There may be a short-term upside though as shippers look to send goods before the tariffs hit.
Tariffs also need to be seen as part of the bigger Customs regulation picture. Getting clearance for shipments is a sector pain point and—unwelcome as they are—it could be that new tariffs open the way for fresh discussions, greater digitalization, and a speedier process.
“The industry is more resilient and adaptable than ever,” Sullivan confirms. “So, whether it is geopolitical tensions, trade tariffs or maritime cargo volatility, air cargo will be able to respond appropriately. At WCS, we’ll showcase every aspect of air cargo’s work. I look forward to hearing from the experts and meeting industry colleagues.”
