As we progress through 2025, the air cargo outlook continues to evolve in response to shifting global demand, technological advancements, and sustainability goals. Industry leaders face both opportunities and challenges as they adapt to a rapidly changing landscape. With air cargo volumes projected to grow 6% year-over-year globally and revenues expected to reach $157 billion, this year is set to be a pivotal one for airlines and logistics providers.
Let’s take a look at some of the key trends shaping air cargo this year.
1. The Journey to More Sustainable Operations Continues
With environmental concerns mounting, air cargo operators are under pressure to reduce their carbon footprint. A key initiative is the increased adoption of Sustainable Aviation Fuel (SAF). According to IATA, SAF can reduce CO2 emissions by up to 80% compared to conventional fuel. Major carriers, including Cathay Cargo and Air France-KLM, have set ambitious goals to replace at least 10% of their fuel usage with SAF by 2030, signaling a major industry shift.
Meanwhile, The European Union’s ReFuelEU Aviation initiative aims to achieve 2% SAF usage in EU aviation by 2025. In the U.S., the SAF Grand Challenge, launched in 2021, is a government-led effort involving the Department of Energy (DOE), Department of Transportation (DOT), and Department of Agriculture (USDA). This initiative seeks to increase domestic SAF production to 3 billion gallons per year by 2030 and 35 billion gallons per year by 2050, aiming for a significant reduction in aviation’s carbon footprint.
As governments tighten emissions targets, logistics providers are integrating greener solutions across their supply chains, such as optimizing flight paths and utilizing more fuel-efficient freighters.
2. The Digital Revolution: Automation and AI
Technology plays a key role in this year’s air cargo outlook. AI and automation, which gained more traction in 2024, are now finding even broader applications in driving efficiency.
One of the biggest contributions of AI is predictive analytics. This allows for more accurate demand forecasting and optimized route planning. AI-driven data solutions enhance the allocation of drivers and vehicles, improving trip distribution and overall productivity in cargo transport.
AI-powered cargo screening is another key development. These systems analyze large volumes of data in real-time, detecting anomalies faster than manual processes. This improves security, reduces human error and related costs, especially in high-volume cargo operations.
Digitalization is proving to be a game changer in reducing delays and enhancing operational efficiency.
3. E-Commerce: The Growth Engine, But for How Long?
The booming e-commerce sector continues to drive air cargo demand. Online shopping accounted for 20.8% of the total retail market in 2024. Despite geopolitical tensions, experts predict a continued 14% annual growth in e-commerce sales through 2026, with the market expected to hit $8.1 trillion by then.
However, rate benchmarking platform, Xeneta, warns in the air cargo outlook that the industry may be too reliant on e-commerce growth. If e-commerce trade slows, it could leave a significant gap in air cargo volumes. Industrial demand—historically the primary driver of air cargo—has been weak, with manufacturing purchasing managers’ indices (PMIs) in major economies stuck in contraction for most of 2024.
Additionally, Chinese e-commerce giants like Temu and Shein are exploring new fulfillment models, shifting some shipments from air to ocean freight. This move is partly in response to new government regulations that may weaken the cost advantage of air freight for low-value online merchandise.
To remain competitive, air cargo providers must diversify their strategies, integrating smart tracking solutions and optimizing cargo space utilization for greater efficiency and cost-effectiveness.
4. Capacity Challenges Still on the Horizon
2025 could be another year where air cargo capacity falls short of demand. While volumes are projected to grow 5.8% year-over-year, reaching 72.5 million tonnes, Xeneta estimates capacity growth at only 3-4%.
A key factor behind this imbalance is the Red Sea crisis, which initially increased air cargo demand. Some experts, however, believe that this surge has now plateaued and may decline in 2026. Adding to the uncertainty, potential U.S. trade policy changes could further disrupt global freight flows, making capacity management even more complex.
To mitigate these challenges, airlines are expanding dedicated cargo services and adjusting pricing strategies to reflect shifting market conditions. Partnerships with third-party logistics providers (3PLs) are also helping companies manage demand more effectively.
5. Emerging Markets and New Trade Routes
Expanding into emerging markets remains a major focus in the air cargo outlook for 2025. Regions such as Southeast Asia, Africa, and Latin America are experiencing double-digit trade growth, pushing airlines to prioritize these regions for expansion.
According to Air Cargo Week, new hubs are being developed in these regions, improving connectivity and reducing transit times. Companies are also investing in multimodal solutions, integrating air, rail, and road networks to enhance efficiency and cut costs.
By tapping into new trade routes, operators can diversify their revenue streams and build stronger connections between manufacturing hubs and consumer markets.
Air Cargo Outlook 2025: Optimism Amid Uncertainty
The air cargo sector is set for another year of evolution and challenges. Digital innovation, sustainability efforts, and the dominance of e-commerce will be key themes in the coming months.
While AI tools are advancing rapidly, their success still depends on human expertise. The challenge isn’t just collecting data for air cargo operations—it’s about identifying the most relevant insights, ensuring accuracy.
With geopolitical risks and economic shifts potentially affecting demand and pricing, companies must remain agile to thrive in this evolving landscape. Whether through green initiatives, advanced technology, or market expansion, the future of air cargo looks promising, but only for those prepared to adapt and innovate.
>> What do you think will be the biggest factor shaping the air cargo industry in 2025? Share your thoughts below!
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