Imagine a world where the arteries of global trade no longer rely solely on the slow pace of maritime shipping, but instead take flight, connecting continents at unprecedented speeds. Over the next three years, the international air freight market is poised for significant transformation. Kuehne+Nagel (K+N) has issued an optimistic forecast, predicting new growth opportunities driven by increasing demand, market volatility, and capacity constraints.
Growth Engines: Strong Demand-Side Drivers
Yngve Ruud, Executive Vice President of Air Logistics at K+N, revealed during a Capital Markets Day presentation that from 2025 to 2028, the air cargo market (excluding e-commerce) is expected to grow by 3% annually—outpacing the projected 1% growth rate of cargo fleets. This projection stems from careful analysis of global economic trends.
Ruud identified several key industries that will fuel this expansion:
- Aerospace: The continued recovery of global travel will drive demand for air cargo services in this sector.
- Perishables: Population growth worldwide is increasing demand for temperature-controlled transport of food and other perishable goods.
- Pharmaceuticals: The industry's strict requirements for speed and reliability make air freight the preferred transportation method.
- Semiconductors: With semiconductor equipment investments projected to grow at 8-9% CAGR through 2028, air transport will be crucial for this time-sensitive industry.
- Data Centers: A projected 22% increase in public cloud spending in 2025, driven by AI investments, will create demand for air transport of critical components.
Geopolitical Uncertainty Creates Opportunities
Beyond these sector-specific drivers, shifting trade patterns caused by geopolitical tensions and new tariff structures present additional opportunities for air cargo. As protectionism grows globally, businesses increasingly value air freight's speed and reliability for maintaining supply chain resilience.
"Geopolitical tensions and trade disputes may disrupt supply chains," Ruud noted. "Companies will need air cargo to rapidly adjust inventory and production plans, highlighting the mode's strategic value."
Capacity Challenges: Aging Fleets and Limited Supply
While demand grows, the supply side faces significant constraints. With cargo aircraft utilization already high, fleet aging and limited new aircraft deliveries will create capacity pressures. Approximately 4% of widebody freighters have already been retired, with retirements expected to increase to 5-6% annually as the global fleet's average age rises.
By 2025, 17% of cargo aircraft could be over 30 years old, compared to just 8% in 2018. Meanwhile, new widebody freighter deliveries are projected to increase capacity by only 1% annually through 2028—far below expected demand growth.
Industry Reshuffle: The Battle for Leadership
The competitive landscape may shift if DSV completes its acquisition of DB Schenker, potentially displacing K+N as the world's largest air freight forwarder. However, K+N remains confident in its strategy:
- Targeted investments in key growth sectors
- Expansion of charter networks and gateway facilities
- Operational efficiency improvements through technology
- Strategic acquisitions to bolster market position
The company's charter network has grown from 13 weekly flights in 2019 to 100 currently, with plans to add 12 new gateway locations by 2025. "Scale matters," Ruud emphasized. "If temporarily surpassed, we're confident we'll regain leadership through organic growth and strategic investments."
A More Pragmatic Approach
Investment bank Jefferies observed that K+N's management has adopted more realistic growth targets following previous overly ambitious goals. This pragmatic approach focuses on balancing growth with profitability rather than pure market share expansion.
Jefferies' analysis also supports the view that air freight will outperform ocean shipping this year, noting that increased air capacity demonstrates confidence in the market while improving delivery times and customer service.
The coming years will present both opportunities and challenges for the air cargo industry. Companies that successfully navigate capacity constraints, technological changes, and competitive pressures while capitalizing on growing demand will emerge strongest in this evolving market.