Air Freight Forwarding System Market Size - By System (Transportation Management System [TMS], Warehouse Management System [WMS], Customized Solutions), By Deployment Mode, By Application, By Organization Size, By End Use & Forecast, 2024 – 2032

Air Freight Forwarding System Market Size

Air Freight Forwarding System Market size was valued at USD 8.1 billion in 2023 and is projected to grow at a CAGR of over 4.5% between 2024 and 2032.  The growth of the global e-commerce industry has significantly increased the demand for air freight services. The need for fast and efficient delivery of goods, especially for international shipments, is driving more businesses to rely on air freight forwarding services?.
 

E-commerce businesses often cater to customers across the globe. These air freight forwarding systems facilitate international shipping by managing customs clearance procedures and ensuring smooth delivery across borders. Moreover, this technology provides online shoppers with fast and reliable delivery of their purchases by offering quicker transit times. Additionally, seamless integration with e-commerce platforms allows for automated order processing, thus streamlining the air freight forwarding process for e-commerce businesses. These systems provide valuable data insights that e-commerce businesses can leverage to optimize their supply chain strategies and improve overall efficiency. To gain business capabilities companies are focusing on strategic initiatives.
 

For instance, in March 2024, Shopify, a major e-commerce platform, partnered with Flexport, a leading air freight forwarding company. This highlights the growing need for integration among e-commerce businesses for efficient logistics management. Shopify merchants can manage their international shipping needs directly through their familiar Shopify interface. This eliminates the need for separate platforms and streamlines the entire logistics process.
 

Furthermore, there has been a growing need for the transportation of perishable items and other time-sensitive goods such as pharmaceuticals and medical supplies. Air freight provides the speed and reliability required for these goods, driving air freight forwarding system market growth?. Air transport significantly reduces delivery times compared to ocean freight, ensuring perishable goods reach their destination on time. Various air freight forwarding companies offer specialized temperature-controlled containers and dedicated air cargo services to maintain optimal conditions for perishable goods throughout the journey.
 

For instance, in March 2023, DHL Global Forwarding opened a new facility in Brisbane to cater to the rising demand for exporting Australian perishable goods. The facility, with an investment of USD 11.5 million over ten years, includes extensive cold chain services to handle high-quality meat, fresh produce, and seafood. This expansion aims to support Queensland’s robust agricultural sector, which saw a significant increase in exports despite pandemic disruptions?.
 

Economic recessions or global financial crises can lead to decreased demand for air cargo transportation, due to reduced spending among business. In addition, air freight forwarding companies are heavily impacted by volatile fuel prices, which can significantly impact their operating costs. Moreover, political instability and trade wars can disrupt international air cargo flows, leading to delays and increased transportation costs.
 

Further, the limited availability of air cargo space, especially during peak seasons or for specific routes, can drive up prices and create bottlenecks. Along with it, congestion at major airports can lead to delays in cargo handling and onward transportation. Furthermore, the air cargo industry faces a shortage of skilled personnel, impacting ground handling operations and overall efficiency. All these factors present numerous challenges in adoption of air freight forwarding systems, and thus hampers the market growth.
 

Air Freight Forwarding System Market Trends

Innovations in cargo handling, tracking, and logistics management are enhancing the efficiency and reliability of air freight forwarding. Digital platforms and automation are streamlining operations, making it easier for businesses to manage their supply chains?. Automation in warehouses and cargo handling facilities streamlines loading and unloading processes, improves efficiency, and reduces the risk of damage to goods. In addition, advanced tracking systems provide end-to-end visibility into the location and status of shipments. AI and ML are revolutionizing logistics management. These technologies can optimize route planning, predict potential disruptions, and recommend the most cost-effective transportation modes based on real-time data.
 

Major players operating in the air freight forwarding system market are focusing on the integration of advanced solutions to strengthen their customer base. For instance, in May 2024, Freightos announced integration of AI-powered route optimization in their air freight forwarding system. Freightos' integration of AI-powered route optimization offers several benefits to its customers with reduced costs, improved delivery times, and enhanced transparency. This move signifies a significant advancement in the air freight forwarding system market and highlights Freightos' commitment to innovation.
 

Further, an increase in trade agreements between countries facilitates smoother and more extensive trade, thus boosting the demand for air freight services. As more markets are participating in trade, the need for efficient freight forwarding grows?. Additionally, trade agreements often involve the reduction or elimination of tariffs and import quotas, making it easier and more cost-effective to trade goods internationally. Moreover, businesses are increasingly sourcing materials and manufacturing products across different countries to benefit from lower production costs and access to specialized resources.
 

These air freight forwarding systems are essential for managing the complex logistics involved in these globalized supply chains, ensuring timely and efficient movement of goods across borders. In February 2023, The UK signed the agreement to join the CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership). A trade group that will cover 15% of global GDP which is expected to enhance trade opportunities and air freight demand. CPTPP reduces tariffs and other trade barriers between member countries. This can make it cheaper and easier for UK businesses to export goods to other CPTPP member countries, leading to increased trade volumes.
 

Air Freight Forwarding System Market Analysis

Based on system, the market is divided into Transportation Management System (TMS), Warehouse Management System (WMS), and customized solutions. The transportation management system segment holds around 50% of the market share in 2023. TMS solutions play a crucial role in optimizing logistics operations, reducing costs, and improving efficiency in the air freight forwarding sector. It integrates various functions such as route planning, carrier management, and freight payment. This integration enhances operational efficiency and reduces transportation costs by optimizing routes and consolidating shipments.
 

Further, transportation management system provides analytics and reporting tools that help in making data-driven decisions. These insights help in managing capacity, forecasting demand, and improving overall supply chain performance. To meet the growing market demand major market players are focusing on partnership and collaboration activities.
 

For instance, in August 2023, National Airlines and Etihad Cargo entered an interline agreement to enhance international freight transportation. This partnership aims to leverage both airlines' networks and improve the efficiency of air cargo services. It highlights the importance of strategic alliances in the air freight forwarding system market?. National Airlines' extensive domestic network in the US, combined with Etihad Cargo's global reach, allows for efficient and reliable transportation of USPS mail across a wider international scope.
 

Based on end use, the air freight forwarding system market is categorized into freight forwarders, cargo airlines, shippers & manufacturers, 3PL (Third-Party Logistics) providers, and e-commerce retailers. The cargo airlines segment is expected to hold around USD 3 billion by 2032. The market, specifically within the cargo airlines segment, is witnessing robust growth driven by several key factors such as operational efficiency, real-time tracking capabilities, and increased global trade volumes.
 

The cargo airlines benefit from air freight forwarding systems through streamlined operations, which reduce manual errors and increase productivity. These systems facilitate the efficient management of cargo, ensuring that goods are handled swiftly and accurately. This efficiency is crucial for meeting the demands of fast-paced global trade. The implementation of real-time tracking systems provides cargo airlines with visibility into the movement of goods. This visibility allows for proactive decision-making and timely interventions, which are critical for maintaining on-time deliveries and boosting customer satisfaction?.
 

Companies are focusing on partnership and collaboration activities that support them to gain air freight forwarding system market share.  In June 2023, MSC Air Cargo partnered with IBS Software to implement the iCargo platform, enhancing their cargo management capabilities. The adoption of advanced digital solutions is aimed at improved efficiency, optimized operations, and enhanced customer service. This collaboration further focuses on providing comprehensive oversight of cargo operations, including sales, operations, and accounting. It improves business efficiency and optimization.
 

North America held a dominant air freight forwarding system market share of over 25% in 2023 as this region has well-established trade partnerships with Europe and Asia, thus creating a constant flow of goods and efficient air freight forwarding services. In addition, extensive networks of modern airports with advanced cargo-handling capabilities streamline logistics and facilitate the movement of air freight in the region. The dominance of e-commerce giants such as Amazon has significantly increased the demand for faster and more reliable cargo transportation, propelling the market.
 

Increasing government initiatives and investing in the freight industry is expected to drive air freight forwarding system market growth. In January 2024, the U.S. government announced an investment in modernizing air cargo facilities to support the increasing demand for rapid delivery services and enhance the region's air freight capabilities. This initiative is a strategic move to address the surging demand for rapid delivery services and bolster the nation's overall air freight capabilities. This strategic move highlights the critical role of air cargo infrastructure in supporting e-commerce growth and contributing to overall economic prosperity.
 

The major countries in Asia Pacific such as China, Japan, India, and South Korea are increasingly adopting advanced technology and digital solutions in freight forwarding process. This includes the implementation of automated cargo handling systems, real-time tracking and monitoring technologies, and AI-driven predictive analytics. These technologies enhance operational efficiency, optimize route planning, and improve inventory management, thereby reducing costs and transit times.
 

As the region embraces digital transformation across industries, air freight forwarders are leveraging these innovations to meet rising customer expectations for transparency, reliability, and responsiveness in logistics services. This technological evolution is crucial in supporting the rapid growth of e-commerce and global trade in the Asia-Pacific region.
 

Air Freight Forwarding System Market Share

Kuehne+Nagel (KN) and DHL Global dominate the market with around 6% market share. Kuehne+Nagel (KN) is a global leader in freight forwarding and logistics. The company offers a comprehensive suite of services, encompassing contract logistics (warehousing and distribution), overland transportation (including road and rail), and sea and air freight forwarding. KN emphasizes a customer-centric approach, offering tailored solutions for various industries and a focus on IT-based logistics solutions to ensure efficiency. They are actively expanding their e-commerce logistics capabilities to cater to the booming online retail market.
 

DHL Global, a subsidiary of Deutsche Post DHL Group, is a behemoth in the international logistics industry. The company boasts a vast global network, spanning air, ocean, and land transportation. They offer a wide range of services, including express delivery (DHL Express), supply chain management, contract logistics, and e-commerce solutions. DHL is a leader in time-definite international (TDI) services, ensuring fast and reliable deliveries across borders. They are known for their strong brand recognition, extensive infrastructure, and focus on innovation and technological advancements in logistics.
 

Air Freight Forwarding System Market Companies

Major players operating in the air freight forwarding system industry are:

• Bollore Logistics
• DB Schenker
• DHL Global Forwarding
• DSV Panalpina
• Expeditors International
• Flexport
• Kuehne + Nagel
• Nippon Express
• WebCargo by Freightos
• WNS Global Services
   

Air Freight Forwarding System Industry News

• In July 2024, Kuehne+Nagel transitioned into a new cargo facility at Birmingham airport. Atlas Air operates the dedicated flights for Kuehne+Nagel utilizing Boeing 747 cargo jets, which rotate through Chicago O’Hare airport on the return trip to Germany.
   
• In May 2024, UPS reported a surge in air cargo activities, driven by e-commerce volumes and geopolitical conflicts causing diversions around the Horn of Africa. This led to year-over-year growth of 11% in air cargo for April, marking the fourth consecutive month of growth in 2024. 
   

The air freight forwarding system market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue (USD Billion) from 2021 to 2032, for the following segments:

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Market, By System

• Transportation management system (TMS)
• Warehouse management system (WMS)
• Customized solutions

Market, By Deployment Mode

• Cloud-based
  • Transportation management system (TMS)
  • Warehouse management system (WMS)
  • Customized solutions 
• On-premises
  • Transportation management system (TMS)
  • Warehouse management system (WMS)
  • Customized solutions

Market, Organization Size

• SME
• Large organization

Market, By Application

• Cargo tracking & visibility
• Route planning & optimization
• Documentation & compliance
• Billing & invoicing
• Warehouse management
• Others

Market, By End Use

• Freight forwarders
• Cargo airlines
• Shippers & manufacturers
• 3PL (Third-Party Logistics) providers
• E-commerce retailers

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Russia
  • Rest of Europe
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
  • ANZ
  • Rest of APAC 
• Latin America
  • Brazil
  • Mexico
  • Argentina
  • Rest of LATAM 
• MEA
  • UAE
  • South Africa
  • Saudi Arabia
  • Rest of MEA