Global Air Cargo and Parcel Delivery Markets to Reach $600 Billion in a Decade

1. Short-Term Policy Shocks and Supply-Demand Balance Push March Cargo Volume to Record Highs  

According to the International Air Transport Association (IATA), global air cargo demand surged by 4.4% year-on-year in March 2025, reaching 21.5 billion ton-kilometers. This figure is 18% higher than pre-pandemic levels in 2019. At the same time, cargo capacity (measured by available freight ton-kilometers, AFTK) rose by 4.3% to 45.2 billion ton-kilometers. The load factor remained stable at 47.5%, the highest March level ever recorded, showing a balanced supply-demand structure.  

This sudden growth was mainly driven by upcoming U.S. trade policy changes. To avoid higher costs, companies rushed to ship goods before May 2, 2025, when the U.S. planned to reduce tariff exemptions for small packages (below $800) and impose 25% tariffs on some industrial products. Data shows that trans-Atlantic air cargo volume jumped by 13.7% year-on-year in March, while Asia-Pacific-to-North America routes saw an 18.2% spike. High-value, time-sensitive goods like electronics and auto parts made up over 60% of shipments. Lower jet fuel prices (down 12.3% to $72 per barrel) also helped airlines increase cargo operations.  

2. Industrial Upgrades and Trade Shifts: Long-Term Drivers of Growth**  

The record-breaking performance in March reflects deeper changes in global trade and manufacturing:  

First, the return of advanced manufacturing and just-in-time supply chains. Global industrial output grew by 3.2% in Q1 2025, with sectors like semiconductors, biotech, and precision instruments expanding by 7.8%. These industries rely heavily on air cargo (92% dependence). For example, production ramp-ups at Tesla’s Berlin factory and TSMC’s Arizona plant boosted demand for next-day air freight by 25%.  

Second, the recovery of global trade and shifts in transport patterns. Although sea shipping still handles 80% of global trade, air cargo’s share in high-value goods rose to 19%. In Q1 2025, global trade volume grew by 2.9%, with time-sensitive goods like medical devices, luxury items, and fresh e-commerce products driving 6.5% growth in air cargo demand.  

Third, the rise of e-commerce logistics. Global e-commerce parcel volume exceeded 12 billion in Q1 2025, with cross-border shipments accounting for 28%. This pushed air express delivery’s share to 42%. Services like Amazon’s "3-Day Delivery" (now in 22 countries) and Alibaba’s "Speedy Logistics" (adding 30 weekly cargo flights) highlight air freight’s critical role.  

3. Parcel Delivery Market to Approach $600 Billion by 2031  

A report by The Insight Partners outlines key trends for the global courier, express, and parcel (CEP) market:  

-Market size: The CEP market reached $471.1 billion in 2024 and is projected to hit $595.3 billion by 2031, growing at 3.5% annually. This growth is fueled by rising e-commerce adoption (28% by 2031) and 800 million new middle-class shoppers in Southeast Asia and the Middle East.  

-Regional shifts: While North America (35% share) and Europe (25%) remain dominant, Southeast Asia (6.8% annual growth) and Latin America (5.2%) are catching up rapidly. For example, Vietnam and Mexico saw 15% yearly growth in local parcel volume. Regional players like J&T Express now hold 23% market share in Southeast Asia by combining air freight with local delivery networks.  

-Technology upgrades: Tools like blockchain (98% tracking accuracy), AI-powered route planning (18% fuel savings), and drone delivery (Amazon’s Prime Air completed 20,000 test flights) are transforming air cargo from a "transport service" to a "supply chain solution."  

4. Challenges and Solutions: Securing Future Growth  

The industry must tackle three major challenges:  

First, balancing carbon reduction goals and costs. The International Civil Aviation Organization (ICAO) requires a 22% cut in aviation emissions by 2030, with sustainable aviation fuel (SAF) making up 6% of total usage. This could raise costs by 10-15%. Companies like FedEx and Lufthansa Cargo are signing SAF deals and using carbon credits to manage expenses.  

Second, adapting to geopolitical shifts. U.S. and European "nearshoring" strategies are boosting short-haul routes (e.g., Mexico-U.S. cargo up 9%) but pressuring long-haul routes (Asia-Europe). Airlines are adding transit hubs in neutral regions like the Middle East and Central Asia.  

Third, improving last-mile delivery. With global smart locker coverage at just 12% and last-mile costs eating up 35% of logistics budgets, companies like DHL Aviation are testing "airport cloud warehouses + regional hubs" to cut delivery times to 6 hours.  

Conclusion  

The March 2025 peak was not just a short-term reaction to policies but proof of air cargo’s rising strategic value. As the parcel market heads toward $600 billion, competition is shifting from "moving more" to "moving smarter." Success will depend on mastering digital tracking, green logistics, and cross-border efficiency. For Chinese air cargo players, the Belt and Road Initiative and e-commerce exports offer a historic chance to evolve from followers to global rule-makers.