What to Expect in Air Cargo in 2025: Trends & Patterns
The air cargo industry has undergone significant shifts in the past few years, driven by global supply chain disruptions, evolving consumer behaviors, and rapid technological advancements. As we move into 2025, the sector is poised for further transformation, with key trends shaping the future of cargo operations, revenue management, and logistics efficiency. Here’s what to expect in the coming year.
1. Increased Adoption of AI and Machine Learning in Cargo Operations
Artificial Intelligence (AI) and Machine Learning (ML) are revolutionizing air cargo, particularly in demand forecasting, pricing optimization, and capacity management. By 2025, we expect AI-driven revenue management and pricing solutions to become the norm, enabling airlines to predict cargo demand with greater accuracy and dynamically adjust pricing based on real-time market conditions.
The biggest question is – Is the air cargo eco-system ready? I will write about this in a separate piece.
According to IATA, AI adoption in logistics is projected to reduce forecasting errors by 30-50%, leading to improved operational efficiency and revenue growth. Additionally, AI-powered automation in cargo handling and tracking will enhance overall supply chain visibility.
2. Impact of U.S. Administration Changes and Tariff Policies
With a potential shift in U.S. administration, trade policies and tariffs could significantly impact air cargo in 2025. Changes in tariff structures and international trade agreements may alter import/export flows, affecting cargo demand across key routes. The ongoing trade tensions between the U.S. and China, as well as evolving relationships with the European Union, will play a crucial role in shaping the cargo market.
Airlines and freight forwarders must stay agile, monitoring policy changes closely to adjust their logistics strategies accordingly. Companies that can navigate these shifts effectively will have a competitive edge in securing capacity and optimizing cross-border shipments.
3. Supply Chain Resilience and Regionalization
The geopolitical landscape and global trade disruptions have underscored the need for supply chain resilience. In 2025, we expect continued regionalization of supply chains, with more companies shifting towards nearshoring strategies to minimize risks associated with long-haul logistics.
Airlines and freight forwarders will focus on multi-modal logistics solutions, integrating air cargo with sea and rail freight for more flexible and resilient supply chain operations.
4. Digital Transformation and e-Air Waybill (e-AWB) Expansion
Digitalization remains a top priority for air cargo carriers. In 2025, the industry will see an accelerated shift towards paperless cargo documentation, particularly with the widespread adoption of e-AWBs. IATA reports that e-AWB adoption has already surpassed 75% globally, and it is expected to reach nearly 90% by the end of 2025, streamlining documentation processes and reducing handling times.
Furthermore, blockchain technology is likely play a larger role in securing and validating cargo transactions, mitigating fraud risks, and ensuring transparency in global trade.
5. Growth in E-commerce-Driven Air Freight
The demand for cross-border e-commerce continues to fuel air cargo growth, with major e-commerce platforms increasingly relying on air freight for faster delivery. According to a report by Boeing, e-commerce-driven air cargo demand is expected to grow at a CAGR of 6-7% through 2025, significantly outpacing traditional freight growth.
To accommodate this shift, airlines and cargo operators are investing in freighter conversions and expanding dedicated cargo fleets. Belly cargo space in passenger aircraft will also continue to play a critical role in meeting e-commerce-driven demand.
6. Sustainable Air Cargo Practices
With increasing regulatory pressure and industry commitments to carbon neutrality, sustainability will be a key focus in 2025. Airlines are expected to increase their use of sustainable aviation fuel (SAF), with IATA setting a goal for SAF to account for 5% of total aviation fuel consumption by 2025.
Additionally, carbon offset programs, optimized flight routes for fuel efficiency, and lightweight cargo containers will contribute to reducing the environmental footprint of air cargo operations.
7. RTS and Its Cargo Suite: Adding Value in This Environment
As the air cargo industry navigates these evolving trends, RTS and its Cargo Suite are well-positioned to provide significant value. With AI-driven revenue management, predictive analytics, and real-time capacity optimization, RTS empowers airlines and cargo operators to enhance forecasting accuracy, maximize yield, and streamline operations. Additionally, RTS’s digital solutions, including automated pricing, e-AWB integration, and blockchain-enabled transaction tracking, help cargo carriers adapt to the digital transformation wave. By leveraging RTS’s comprehensive suite of solutions, businesses can stay ahead of market shifts, optimize efficiency, and drive sustainable growth in the ever-changing air cargo landscape.
Final Thoughts
The air cargo industry in 2025 will be defined by its ability to adapt to technological advancements, sustainability goals, and shifting market dynamics. With AI-driven efficiency, digital transformation, and sustainable practices leading the way, air cargo operators will need to stay agile and innovative to thrive in an increasingly competitive landscape.
As demand continues to evolve, the industry’s focus on automation, e-commerce growth, and regionalized supply chains will shape the next phase of air cargo logistics. Operators that embrace these changes will be best positioned to drive profitability and operational excellence in the years ahead.
Hit me up if you want to discuss more @mukundh.parthasarathy@rtscorp.com