Air Freight Services Procurement Intelligence Report, 2023 - 2030 (Revenue Forecast, Supplier Ranking & Matrix, Emerging Technologies, Pricing Models, Cost Structure, Engagement & Operating Model, Competitive Landscape)

Every organization and its procurement team look forward to negotiating the best deal while procuring a set of products or subscribing to services. Rate benchmarking involves price/cost comparison of more than one set of products/services to analyze the most efficient combination that can potentially help the procurement team in getting the optimum rate.

The geographical location, the gross volume, and weight along with the dimensions of the package impact the prices of air freight services and play a vital role in rate benchmarking. In our research, we have analyzed the rates of air freight services in the U.S. region. As a matter of price, air freight service providers will either charge by volumetric weight, dimensional weight, or actual weight. Compared to ocean freight, the price of air freight is high. For instance, an air shipment from Shenzhen, China to Los Angeles, USA, can cost up to USD 8,000 or more, compared to ocean freight, which costs USD 1,500. However, this difference might be smaller when prices shift as a result of supply chain interruptions.

Due to a slowdown in the export market and increased capacity, air freight rates out of India experienced considerable adjustments in May 2022. Rates decreased as a result of the usual perishables season coming to an end, particularly with shipments of Indian mangoes. Due to the slowing of global demand, air cargo rates from India were mostly on a downward trend. Cargo volumes decreased in India, partially as a result of decreased manufacturing output and freight movement in and around Shanghai as a result of Covid-related lockdowns and restrictions starting in mid-March 2022. In July 2022, according to industry freight leaders and experts, the average prices to the U.S. from India were around USD 5.35 per kilogram, which was down from USD 6.50 in June 2022. Rates from India to Europe decreased to USD 2.50 per kg from USD 3.50 in July 2022.  However, airfreight costs for cargo arriving from India remained largely stable in July 2022.

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Labor cost is one of the key components of the total incurred costs while offering a product or service. Therefore, an organization must decide on whether the focus category should be retained in-house or outsourced if the organization is providing its products or services at competitive prices. If the organization decides in favor of outsourcing, it must understand the difference in the salary structures of suppliers before selecting a supplier and formulating a negotiation strategy.

According to our research, Air Export Operations Specialists for air freight services at DHL and UPS receive a 15% - 22% higher base salary compared to the salary received by Air Export Operations Specialists working in companies such as FedEx and All Nippon Airways. However, the year-on-year increment rate in all these companies majorly depends on the Key Result Areas (KRAs).

Organizations may find it cumbersome to continuously track all the latest developments in their supplier landscape. Outsourcing the activities related to gathering intelligence allows organizations to focus on their core offerings. At this juncture, our newsletter service can help organizations stay updated with the latest developments and innovations and subsequently assist in preventing disruptions in the supply chain. We have identified the following developments within the Air Freight Services category over the last two years.

In May 2023, DHL Aviation, DHL’s in-house airline recently introduced a new GoGreen Plus service, which is optional, for its air freight products. Utilizing Sustainable Aviation Fuel (SAF), clients can use the new GoGreen Plus service to minimize the carbon emissions related to their shipment. The service is operational since June 2023.

In April 2023, Turkish Cargo, the airline's air cargo brand, and DHL Global Forwarding officially signed a Memorandum of Understanding to strengthen their bilateral relationship. SMARTIST, Turkish Cargo's cargo facility at the Istanbul airport, has been integrated into DHL Global Forwarding services. The carriers' collaboration aimed to increase each other's operational effectiveness and increase Istanbul's potential to become a major global logistics hub.

In February 2023, in an effort to establish an "air cargo network of the future," Ameriflight, a company with partnerships with UPS, FedEx, and DHL, has agreed to acquire 20 autonomous aircraft from Natilus for USD 134 million.