Just-in-time drives demand

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Compound annual growth rates (CAGR) of 4.5 per cent for airfreight worldwide will be driven by just-in-time manufacturing, the demand from e-commerce and the rise of airline fleets with many widebody aircraft, according to a report about the industry’s future. 

Looking ahead to 2019, the report, Global Air Cargo Market 2015-2019 – Market Landscape, Growth Prospects and Key Vendors, by market research firm TechNavio, predicts annual revenue tonne kilometres (RTK) of 268.4 billion, 53.7 billion more than 2014, which according to the company achieved 214.7 billion RTK.

“Online retail stores, especially online fashion stores, are a major source of revenue for the market. Another important driver is the increased demand in just-in-time manufacturing,” the report’s executive summary states. Just-in-time manufacturing was developed in Japan.

It organises a factory’s logistics around the concept that materials are only ordered when they are needed, pulling them through the factory so they arrive just in time at each work station. The report also found that airlines were preferring to acquire companies to enter the airfreight market and that carriers’ research was increasing and is leading to more new routes.

According to TechNavio, the rosy picture of 4.5 per cent CAGR is to be challenged by increased competition from surface transportation, such as high speed rail. Of 2014, the report also says: “In 2014, the APAC [Asia Pacific] region accounted for the majority of the market share with 35.4 per cent. China’s contribution was the highest in the region,” reflecting its future importance.

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