The air cargo industry is undergoing a profound transformation, shaped by unpredictable market conditions, evolving trade policies, and shifting supply chain dynamics. Despite these challenges, air logistics remains a resilient sector, adapting to emerging trends and leveraging new technologies to stay competitive.
During a recent discussion, Dr. Ludwig Hausmann, Senior Partner and Leader of the Logistics Practice at McKinsey and Company, shared insights into the current state of the air logistics industry, outlining key drivers of change, the impact of geopolitical uncertainty, and the strategic priorities shaping the future of air cargo.
The traditional model of stable, linear growth no longer defines air logistics. Instead, the sector is adapting to a cycle of rapid fluctuations.
“We live in an era of high volatility and uncertainty,” Dr. Hausmann explained. “This is not necessarily negative—air cargo is uniquely positioned to help supply chains navigate unpredictable disruptions.”
One of the major factors sustaining air cargo demand is cross-border e-commerce, particularly on routes between China and the US. On some key trade lanes, nearly 50 percent of air cargo volumes are now attributed to e-commerce shipments. However, this trend faces an uncertain future. The US government is reviewing potential changes to de minimis rules, which currently allow imports under US$800 to enter the country duty-free. If restrictions are imposed, the flow of e-commerce goods from China to the US could be significantly reduced, impacting air cargo volumes and rates. “Eliminating or modifying de minimis could disrupt a key driver of air freight demand,” Dr. Hausmann warned.
“It could shift trade flows to alternative hubs like Vietnam, India, or other parts of Southeast Asia.” While demand remains strong, the supply side of air cargo is struggling to keep up. Two critical challenges were highlighted: Belly capacity recovery is slow – Although global passenger traffic has recovered, belly cargo capacity is still 13 percent lower than 2019 levels, creating additional pressure on freighter operations. Ageing freighter fleets – Around 30 percent of the world’s freighters are over 30 years old, and with delays in aircraft production, only 12 percent of the fleet is expected to be replaced by 2030.
“Freight yields increased by 11 percent on average in 2024 due to supply constraints,” Dr. Hausmann noted, highlighting the pricing pressures stemming from limited capacity.
Geopolitical uncertainty and trade disruptions
Beyond capacity challenges, geopolitical instability remains a major wildcard for the industry. According to McKinsey’s research, 20 percent of global trade occurs between countries facing significant geopolitical tensions. Escalating USChina trade disputes, sanctions, and evolving tariff policies could disrupt air cargo demand. “If additional trade restrictions emerge, logistics providers will need to rethink routing strategies to maintain supply chain continuity,” Dr. Hausmann cautioned.
Looking ahead, several long-term shifts will reshape the air cargo industry: Sustainability pressures – Airlines will face tighter environmental regulations by 2030, increasing the need for sustainable aviation fuels (SAF) and lower-emission operations. Digitalisation and automation – The industry is lagging in technology adoption, but real-time tracking, AI-driven logistics, and predictive analytics will soon become essential.
Inventory cycles and demand patterns – Stabilising inventory levels could moderate short-term air cargo growth, but economic fluctuations may still create demand spikes. Despite ongoing volatility, the air cargo industry remains resilient.
Supply chain players that can quickly adapt, leverage digital transformation, and optimise networks for shifting trade patterns will lead the next phase of growth. As Dr. Hausmann put it, “Companies that remain agile, embrace innovation, and prepare for geopolitical shifts will be best positioned to succeed in the evolving air logistics market.”
