Introduction

The Air Cargo Market


The Air Transport Mode

For someone who wants to send a shipment door-to-door and over a medium to long distance fast, the air transport mode will best fit this purpose.

With air transport, cargo can be transported in different types of aircraft:

• Passenger aircraft 
• in the cargo area below the passengers, the so-called "belly" 
• look here for an example: the Airbus A320 (ANA) 
• look here for an example: the Boeing 737 NG (Boeing) 
• look here for another example: the Airbus A380 (Emirates on Airliners.net) 
• look here for another example: cross-section of the Airbus A330 fuselage (Wapedia) 
• in the passenger cabin as hand-carry by a so-called "on-board courier" (OBC) flying as passenger, sometimes also called "hand-carry services" 
• the OBC is mostly an employee working for a forwarder or courier service (see below) and can also take care of the total door-to-door transport, all eventual customs formalities for export or import, as well as the hand-over at destination 
• this type of service is mainly used for very urgent or valuable documents and small goods ; as with all cargo services, also here the entry requirements and customs regulations of the country of import, as well as the regulations for restricted articles on board of the aircraft must be known and adhered to 
• Cargo aircraft, or: Freighters 
• on the main-deck or in the belly ; by means of nose-loading, where the whole nose is opened, or side loading, through a large cargo door 
• look here for an example: the Antonov AN-124 Ruslan
• look here for another example: the Boeing 767-300F (Boeing) 
• look here for another example: the Boeing 747-400ERF (Air France) 
• look here for another example: the Airbus A330-200F (Airbus) 
• look here for another example: the Fokker F27 (Air Charter service) 
• look here for the configuration of the freighters of UPS
• if you are interested in the price of a freighter, take for example a look here at Boeing's list prices. 
• Combi aircraft 
• on the main-deck behind the passengers’ area with side loading through a large cargo door, and in the belly 
• look here for an example: the Boeing 747-400M Combi (Boeing), and also here from KLM 
• look here for another example: the Boeing 737-400 Combi (Alaska Airlines) 

As you can see in the examples above, the dimensions of the aircraft can vary, which of course also influences the amount of passengers and/or cargo that can be taken. The amount and weight of cargo that can be carried depends a.o. on the fuselage dimensions (esp. the diameter) of the aircraft. For the bigger aircraft or airliners a difference is made between narrow body and wide body aircraft.

See also the "Cargo Aircraft Specifications" item in the right-hand column of this website --->

Volga-Dnepr Ilyushin Il-76 freighter

Air Cargo Facts

According to IATA, in 2016, airlines transported 52 million metric tons of goods, representing more than 35% of global trade by value but less than 1% of world trade by volume. That is equivalent to $6.8 trillion worth of goods annually, or $18.6 billion worth of goods every day. Find out more interesting air cargo facts (pdf).

According to plane maker Boeing in 2012, cargo-only aircraft or freighters handle about 60 percent of global airfreight shipments, while passenger planes fly the other 40 percent in their bellies.

On average, cargo business generates 9% of airline revenues, representing more than twice the revenues from the airlines' first class passenger segment.



Shipping By Air: Parties In The Market

Someone wants to ship a parcel from Los Angeles (LAX) to Hong Kong (HKG)

( look here for an overview of the IATA worldwide airport codes used in the air cargo industry )

From a potential shipper’s or customer’s viewpoint, the international (door-to-door) air cargo market can be divided in four major supplier categories according to their core business:

• Postal companies using Airmail 
• Envelopes and parcels up to 30 kg 
• Air transport generally outsourced to airlines 
• Examples: EMS Wordwide Express Mail Service, Deutsche Post, La Poste, Singapore Post, Swiss Post, TNT Mail, USPS, etc. 
• International Courier companies or: Couriers 
• Envelopes and parcels up to 75 kg 
• Air transport generally outsourced to airlines 
• Examples: City-Link, DPD, DPEX Worldwide, HKDC Royale Asia, Kangaroo Worldwide Express, KDZ Express, OCS - Overseas Courier Services, Quick International Courier, Sky Net Worldwide Express, Speedlink International, Time:Matters, World Courier, UNEX - Universal Express, etc. 
• International Express companies or: Integrators 
• Envelopes and parcels up to 75 kg 
• Generally operate their own aircraft, some destinations outsourced to airlines, aircraft operators or aircharter companies 
• Examples: DHL Express, FedEx, TNT Express, UPS, etc. 
• (Air Cargo) Forwarders 
• Parcels and consolidations > 75 kg or up to anything that fits in an aircraft 
• Air transport generally outsourced to airlines and sometimes aircraft operators or aircharter companies 
• Examples: Agility, CEVA Logistics, C.H. Robinson, Damco, DB Schenker, DHL Global Forwarding, DSV, Expeditors, Geodis, Hellmann Worldwide Logistics, Kerry Logistics, KWE - Kintetsu World Express, Kuehne + Nagel, Nippon Express, Panalpina, Pantos Logistics, Rhenus Logistics, SDV, Sinotrans, UTi Worldwide, UPS SCS, etc. 

The real air transport (or: airport-to-airport) part is actually outsourced by these companies to an air operator or airline (except in case of the Integrators, that operate an in-house aircraft fleet for the main part of their air transport needs and outsource only partially).

The combined airlines have the biggest share of this world wide air transport market for cargo.

So the above mentioned Postal companies, Couriers, Integrators and Forwarders, are the cargo customers of the airlines ; and thus the airlines are their suppliers or partners.

The air cargo forwarders are the ‘traditional’ and still most important customers for the airlines. According to FIATA, forwarders contract, book and process over 80 per cent of international air cargo consignments. They compile the complete and (where necessary) customized door-to-door (D2D) air cargo supply chains for their customers, which are often called end-customers by the airlines. The airlines deliver the airport-to-airport (A2A) transport in this chain.



The Air Cargo Supply Chain

When a demand on one place is supplied from another place with air transport as the main transport mode, an air cargo supply chain must be compiled.

Air transport is relatively expensive, but often the fastest mode of transport available to cover medium to long distances.
Therefore typical air cargo consists of goods with a high value and/or an operationally or commercially critical delivery time (high financial breakdown risk):

• Airmail, diplomatic mail 
• Live animals, hatching eggs, human organs, human remains, medical supplies 
• Express parcels 
• Perishables (food, flowers, dry-ice shipments) 
• Pharmaceuticals 
• Valuables (money, gold bars, diamonds) 
• Technical supplies (high tech, oil & gas, aerospace, automotive, ship spares) 
• Luxury consumer goods (electronics, fashion goods, accessories) 

A typical air cargo supply chain consists of the following steps:

• Shipping 
• Forwarding out 
• Air Transport 
• Forwarding in 
• Consignment 

(yes I know you'd better get to HKG the other way round but I have no other map, and besides we need this set-up further on in the process... :)

A good (2009-2010) presentation on the air cargo market can be found here on slideshare.net: Air Cargo 101.

Read about the most important differences between the passenger airline industry and the cargo airline industry here on Air Transparency: The unique air cargo industry.

Cargolux Boeing 747-400F takeoff

I invite all of you in the industry to contact me for corrections or additions, 

and who are new in the business to question me 

in order to improve the information on this site! 

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