Air Freight Software Market Size, Share & COVID-19 Impact Analysis, By Deployment (On-Premise and Cloud Based), By Air Freight Service (Expedited Service, Standard Service, and Deferred Service), By Application (Freight Handling, Freight Tracking and Monitoring, Warehouse Management, Price and Revenue Management, Freight Routing and Scheduling, and Delivery Tracking), By End User (Cargo Airlines, Commercial Airlines, E-Commerce Companies, Third Party Freight Service Providers, and Others), and Regional Forecast, 2023-2030

The global air freight software market size was valued at USD 6.02 billion in 2022 and is projected to grow from USD 6.34 billion in 2023 to USD 7.41 billion by 2030, exhibiting a CAGR of 2.3% during the forecast period.

Air freight transportation is the process of arranging and planning the transportation of cargo from one point to another by air. Digitization presents new challenges and opportunities for freight forwarders, and they have no choice but to adopt cloud technology. Air freight software management improves efficiency by automating whole air freight operation and reduces time and errors. Advanced air freight shipping software supports all airfreight handling processes, including real-time tracking, daily air freight operation management, order and quote booking, helping businesses to save time and increase efficiency.

There are various features of air freight software, such as air waybill automation, direct airline connectivity, and improved shipment visibility, which minimize human errors and improve operational efficiency. Owing to the increase in cargo fleet by various airlines to meet the growing demand for air cargo, the market of air cargo software is anticipated to grow during the forecast period.

COVID-19 IMPACT

COVID-19 had a Negative Impact on the Market Owing to Decrease in Cargo Demand

The aviation industry faced an unprecedented challenge as borders closed, demand for airline tickets declined and precautionary measures were implemented in order to slow down the spread of the novel coronavirus known as COVID-19. As per our analysis, the market of air freight software declined by 18.70% due to disruption in global supply chains, reduced air cargo capacity, and suspension of passenger flights, hampering the cargo demand in various regions.

The International Civil Aviation Organization estimated industry-wide available cargo tonne-kilometers fell 21.4% year-on-year in 2020. According to the International Air Transport Association (IATA), the yearly decline in cargo demand was still the largest since the Global Financial Crisis in 2009. Furthermore, the share of air cargo in servicing extra-European Union (EU) trade went down from the average of 2.35% in 2019 to 1.21% in 2020 wherein the imports dropped from 0.28% in 2019 to 0.24% in 2020.

LATEST TRENDS

Rise in Digital Twin with Integration of Artificial Intelligence is a Prominent Trend in the Market

A digital twin is a digital representation of an "asset" such as an object, process, or system. It uses real-time data (often collected from sensors), historical data, and machine learning to map features and states of actual versions and predict future states.

With ONE Record, IATA claims it has found a solution that lays the foundation for end-to-end digitization of the logistics and transportation supply chain, where data is exchanged between air carriers of all sizes. This effort is bundled with industry-wide data standards and licensed under a free open source license. The aim is to allow high-quality exchange of new data types as well as traditional data.

ONE Record was designed to get air freight information, track shipments, and exchange data quickly, securely and accurately so all participants in the supply chain, regardless of size, have the same communication chains that can be shared. All relevant information along the transportation chain such as booking data, handling instructions, tracking data, Unit load device (ULD) information and even individual item serial numbers are recorded by the ONE Record data model and shared with partners via standardized ONE Record interfaces.

 This brings cost savings to all participating members of the ONE Record Network as each participant only has to implement his ONE Record interface once and reuse it to communicate with other users.

DRIVING FACTORS

Rising Demand for Air Freight Services by E-commerce Companies will Catalyze the Market

E-commerce or online shopping is the buying and selling of goods and services over the Internet. It allows businesses and consumers to transact without the need for a physical storefront. From the rise of social media to the wider reach of brand ambassadors, there are several reasons why e-commerce continues to grow.

The online shopping trend has developed the demand for domestic and international courier services. Moreover, the air freight industry is the fastest way to transport freight, so it is the only solution for one’s e-commerce business.

According to a report by the IATA, in 2022, retail e-commerce sales increased by 21% when compared to 2021. Furthermore, according to the latest statistics from IATA, global demand measured in cargo tonne kilometers (CTK) increased by 2.7% in January 2022 compared to January 2021 (3.2% for international flights).

In July 2022, Turkish Cargo, one of the leading players in global supply chain sustainability, built air freight bridges for cross-border e-commerce shipping. The brand has strengthened its strategic partnership with Shopee, a leading e-commerce platform based in Singapore.

Emergence of New Cargo Airlines Around the World will Propel the Market

The growth of new cargo airlines across the globe is driving the market. As more and more airlines emerge, there is an increasing need for advanced software to manage cargo operations.

For instance, in October 2022, India launched a new cargo airline “Pradhna Air Express”. The airline was set up after the COVID-19 pandemic that changed perceptions of India's air cargo sector, with existing passenger airlines also operating in the sector. Moreover, there is a rising demand in growing economies such as India, China, and Japan for increased cargo service is a major factor for the global air freight software market growth.

In June 2021, Volga Dnieper Group's Air Bridge Cargo Airlines (ABC) signed a three-year contract to be the customer of Worldwide Flight Services (WFS) for the launch of the new cargo terminal at Hartsfield-Jackson Atlanta International Airport (H-JAIA). Under the terms of the contract, WFS will handle approximately 9,500 tons of AirBridgeCargo cargo annually, which will be transported on approximately 100 Boeing 747-400ERF cargo flights.

RESTRAINING FACTORS

Risk of Data Breach and Cyber Attack May Hamper the Market Growth

Data breaches can compromise sensitive information such as shipment details, customer data, financial records and confidential business information. This can lead to financial losses, reputational damage, legal implications and loss of customer trust. Furthermore, data breaches and cyber-attacks can cause disruption in business operations and cause downtime.

In December 2021, Hellmann Worldwide Logistics was affected by a cyberattack that affected operations. Hellmann offers air freight, sea freight, road and rail transportation services, as well as contract logistics services, from 489 offices in 173 countries.

In August 2022, Akasa Air announced a data breach in which an unauthorized person accessed user information. In a statement posted on its website, the airline apologized to its customers for the data breach and said the incident had been "self-reported" to a node agency, the Computer Emergency Response Team of India (CERT-In). 

SEGMENTATION

By Deployment Analysis

Cloud Based Segment Dominates the Market Owing to Enhanced Security Concerns in Aviation 

By deployment, the market is bifurcated into on-premise and cloud based. Cloud based segment dominated the market and is anticipated to grow with the highest CAGR during the forecast period. Cloud based refers to the software applications that are hosted and accessed over the internet rather than installed and operated on premise. These software solutions are specifically designed for the cargo industry providing a range of functionalities and features such as cost-effectiveness, automatic software updating, data security, ease of maintenance, and others.

On-premise segment is anticipated to show significant growth during the forecast period. Various airlines and organizations prefer on premise software due to their specific needs, security concerns and the need for customizations. On-premise software type offers advantages such as offline accessibility, enhanced security and control, flexibility for customizations and others

By Air Freight Service Analysis

Deferred Service Segment Dominates the Market Owing to Low Cost Associated with Such Type of Service

The market by air freight service is segmented into expedited service, standard service, and deferred service. The deferred service segment dominates the market and is anticipated to be the fastest growing segment during the forecast period owing to the longer transit time compared with standard or expedited services and the primary benefit of this service is cost saving. By opting for a longer transit time, customers have an advantage of lower rates and is suitable for non-urgent shipments with a flexible delivery timeline.

Expedited service is projected to witness significant growth during the study period. Expedited service in air cargo refers to a specialized service option that offers fast delivery of shipments, prioritizing speed and time. It is mainly used by the customers who require urgent delivery of their goods in a specific time. Additionally, a major advantage is that the service providers offer service level agreements that outline the guaranteed delivery along with a specific timeline. 

By Application Analysis

Freight Tracking and Monitoring Segment Dominates the Market Owing to Improved Security Factors in Airlines

The market by application is segmented into freight handling, freight tracking and monitoring, warehouse management, price and revenue management, freight routing and scheduling, and delivery tracking. Freight tracking and monitoring segment dominated the market along with highest growth in CAGR during the forecast period. Freight tracking and monitoring refers to the process of monitoring the movement, location, and status of cargo. It involves various systems to provide real time data and updates about the cargo and shipped goods condition. Owing to such broad applications, the segment is anticipated to dominate the market.

Freight handling is projected to witness moderate growth during the study period. Freight handling is the feature within a software that assists in managing and optimizing the handling of freight or cargo throughout the process. It involves various moments such as tracking, management of goods from origin to destination and others.

By End User Analysis

Cargo Airline Segment Holds the Highest Market Share Owing to Increased Cargo Aircraft Fleet Size Globally

The market by end user is segmented into cargo airlines, commercial airlines, e-commerce companies, third party freight service providers, and others. The cargo airlines segment dominated the market in 2022 and is projected to be the fastest growing segment during the forecast period. The growth in the segment is owing to the increase in aircraft fleet size and demand for cargo aircraft.

The commercial airlines segment is projected to witness significant growth during the study period. These commercial airlines utilize the available cargo capacity in the belly hold of their passenger aircraft to provide cargo services for revenue generation.

REGIONAL INSIGHTS

In terms of geography, the market is divided into North America, Europe, Asia Pacific, and the Rest of the World.

North America held significant air freight software market share in 2022. The market in North America was valued at USD 1.70 billion in 2022. At present, the adoption of air freight software in North America is preliminarily driven by increase in demand for air freight transportation and rise in fleet size in the region. The rise in air cargo airlines and cargo routes in the region is a major driving factor for the rise of the market during the study period.

Europe is estimated to hold the second-largest market share owing to the rising adoption of cargo software in the aviation industry. The rise in number of service providers related to air freight software is a major factor in the regional growth during the study period.

The market in Asia Pacific is projected to grow at the highest growth rate during the forecast period. This growth is due to the rising adoption of the air freight software system by airline carriers to enhance cargo management. Besides, the rising number of e-commerce in developing countries such as China and India is likely to support the region's growth.

The rest of the world is anticipated to witness moderate growth in the market during the forecast period. The rise in market is due to the significant surge in cargo demand in this region Besides, the rising investment by airline operators in the Middle East & Africa region to provide an improved experience to cargo handling is driving the market.

KEY INDUSTRY PLAYERS

Key Players are Focusing on Software Upgrades to Offer a Wide Range of IFEC Solutions to Sustain in the Market

The global market is fragmented with several key players such as Champ Cargosystems, Freight Pop, Freightdata 2000, IBS, Inform Software, Magaya, and others.

The strategic acquisitions and increasing investments in research & development activities are a few additional factors responsible for the dominance of these air freight software companies. The companies are mainly focused on upgrading the cargo software to meet the demand and enhance the cargo handling process. In January 2023, Riege software was awarded ISO 27001 certificate for Information Security Management Systems (ISMS) by TÜV Süd. This certification is reliable proof that information is being handled responsibly and attests to a high level of data security for the company's approximately 10,000 users worldwide.

LIST OF KEY COMPANIES PROFILED:

• Champ Cargosystems  (Luxembourg)


• Freight Pop (U.S.)


• Freightdata 2000 (U.K.)


• IBS (India)


• Inform Software (U.S.)


• Magaya (U.S.)


• Riege Software (Germany)


• The Descartes Systems Group Inc. (Canada)


• TMSfirst (U.S.)


• WiseTech Global (Australia)

KEY INDUSTRY DEVELOPMENTS: 

• May 2023 – Speedcargo partnered with Güdel to develop the world's first fully-automated robotic cargo handling solution for air cargo. The robotic system can handle cargo of various sizes and weights, even oddly shaped cargo. The system combines Güdel's decades of experience in advanced gantry robots and intra-logistics automation with Speedcargo's advanced computer vision, optimization and intelligent robotics software to improve three major ground handling operations.


• December 2022 – WiseTech Global announced that IAG Cargo, the cargo division of International Air Lines Group (IAG), will be directly integrated with CargoWise to enable airlines to efficiently select, book, confirm, and modify packages in real-time from the industry-leading logistics fulfillment platform.


• October 2022 –Magaya corporation announced that Andes Logistics or ANDES had gone live with Magaya Digital Freight Portal. This enables modernizing the customer experience with an interactive online freight portal and saving time.


• October 2022 – Air Canada Cargo expands its network into Latin America while adding cargo flights to the United States. The company will add B767 cargo flights to Dallas and Atlanta starting in November. Air Canada is currently converting eight B767s into cargo planes and has two factory B767-300Fs on order, due to enter service in 2023. Additionally, the company plans to take delivery of two B777Fs in 2024.


• March 2022 – IBS Software, has entered into a long-term agreement with Alaska Air Cargo to transform and modernize the air cargo IT ecosystem. IBS Software deployed its comprehensive cargo management solution across Alaska Airlines' air cargo operations.

REPORT COVERAGE

The report provides detailed market research and analysis. It comprises all major aspects, such as R&D capabilities, supply chain management, competitive landscape and optimization of the manufacturing capabilities, and operating services. Moreover, the report offers insights into the market trends analysis, market dynamics, market size, market forecast, and market segments analysis, and primarily highlights key industry developments. In addition to the above-mentioned factors, it mainly focuses on several factors that have contributed to the global market in recent years.

Report Scope & Segmentation

ATTRIBUTE	DETAILS
Study Period	2019-2030
Base Year	2022
Estimated Year	2023
Forecast Period	2023-2030
Historical Period	2019-2021
Growth Rate	CAGR of  2.3% from 2023 to 2030
Unit	Value (USD Billion)
Segmentation	By Deployment, Air Freight Service, Application, End-User, and Geography
By Deployment   On-Premise Cloud Based
By Air Freight Service Expedited Service Standard Service Deferred Service
By Application   Freight Handling Freight Tracking and Monitoring Warehouse Management Price and Revenue Management Freight Routing and Scheduling Delivery Tracking
By End-User  Cargo Airlines Commercial Airlines E-Commerce Companies Third Party Freight Service Providers Others
By Geography	North America (By Deployment, Air Freight Service, Application, End-User, and Country) U.S. (By End User) Canada (By End User) Europe (Deployment, Air Freight Service, Application, End-User, and Country) U.K. (By End User) Germany (By End User) France (By End User) Rest of Europe (By End User) Asia Pacific (By Deployment, Air Freight Service, Application, End-User, and Country) China (By End User) India (By End User) Japan (By End User) South Korea (By End User) Rest of Asia Pacific Rest of the World (By Deployment, Air Freight Service, Application, End-User, and Country) Latin America (By End User) Middle East & Africa (By End User)