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Air Cargo. Forecasts for 2025: Growth Despite Challenges

Air cargo consistently plays a unique role in global trade due to its unparalleled reliability, offering both speed and security in the movement of goods. Nearly 99% of global trade consists of bulk goods of lower unit value, which are still transported by sea, such as crude oil, metal ores, and grains. While less than 1% of the total trade volume is transported by air, typically involving perishable, high-value, or time-sensitive goods, this mode of transport accounts for about 35% of the total value of global trade.

To better understand the current state of air transport, it is essential to look at the numbers. This year, global air cargo volume exceeded 2019 levels, with a growth of cargo tonne kilometers (CTK) by 13–15%. In 2023, the global air market reached a staggering $303.8 billion, and by 2032, it could reach $481.2 billion. As key market drivers evolve, the landscape is shifting in ways that will impact businesses worldwide, not only those directly involved in aviation but all entities within the transportation chain and general trade.

Looking ahead to 2025, the air transport industry finds itself at a crucial point, transitioning from growth previously driven by the pandemic to a period of stabilization. Here are the four most critical issues for the air market in 2025:

Economic Conditions and Regional Differences

The air cargo market is closely linked to global GDP. The International Monetary Fund (IMF) predicts that in 2025, the global economy will grow by 3.2%, matching the growth seen in 2023. However, looking five years ahead, the IMF forecasts a growth rate of just 3.1%, the lowest in decades.

Growth prospects also vary by region. Currently, the United States is experiencing moderate growth, China faces economic challenges, and Europe is generally in decline.

Imbalance in Supply and Demand Efficiency

Current market trends show that demand for air cargo exceeds supply across all regions, particularly on Transpacific Eastbound (TPEB) and Far East Westbound (FEWB) trade routes. Key regions to monitor include China, the Indian subcontinent, the Middle East, and Vietnam. The Atlantic market is expected to remain stable next year, though an uneven rise in demand may be observed due to stronger economic indicators in the US compared to the EU.

Additionally, the capacity imbalance may deepen as older aircraft are phased out, deliveries of new freight transport planes are delayed, airlines focus on passenger routes (which offer limited cargo space), and freight carriers shift capacity from the US to Asia. As a result, price pressure is expected to persist in 2025, as production capacity remains at similar levels.

Geopolitical Tensions and Crises

Although fuel prices remain relatively low due to weaker demand from China and increased oil production in the US, volatility remains an issue. The crisis in the Red Sea and other geopolitical disruptions continue to affect air cargo rates, causing backlogs and rate spikes in the Middle East and South Asia. Geopolitical tensions in key oil-producing regions such as Saudi Arabia and Russia could lead to unforeseen price hikes.

Legislation

The European Green Deal – aimed at achieving EU climate neutrality by reducing airline greenhouse gas emissions by 55% – will impact the competitiveness of European airlines.

To achieve this goal, Europe would need to utilize sustainable aviation fuel (SAF), 90% of which is currently produced in the US. However, importing SAF from the US involves emissions from transport.

A significant shift in the supply chain is also the EU-introduced entity known as the approved haulier. Although ground transport of shipments within the secure supply chain under Declaration 6-E (Haulier Declaration) will not be mandatory until January 1, 2027, the approval process for potential entities has already begun. To ensure full implementation by 2027, this process must accelerate significantly over the next two years.

According to plans for 2025 and beyond, air cargo transport will remain a crucial element of global supply chains. However, uncertainty persists, particularly regarding potential regulatory changes. Staying ahead of these trends will enable businesses to navigate the complexities of the air transport market and maintain a competitive edge.

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