Ocean & Air Freight Industry Outlook 2024

Global Overview

Ocean Freight: In 2024, 478 container ships with a capacity of 3.1 million TEUs (twenty-foot equivalent units) are scheduled for delivery. This represents a significant increase in freight capacity, beating the previous year's record by 41%. This surge is expected to grow the container fleet capacity by 10% in 2024.

Air Freight: The International Air Transport Association (IATA) projects a 4.5% increase in air cargo demand in 2024. Growth is expected across various regions, with Middle East carriers leading at a 12.3% increase, followed by Latin America (7.7%), Europe (4.1%), Asia Pacific (3.6%), North America (2.1%), and Africa (1.5%).

Regional Insights

India

• Market Size: Estimated at $ 317.26 billion in 2024. The target is $ 484.43 billion by 2029, with a CAGR of 8.83%.

• Air Cargo: International flight operations from India are normalizing, indicating improved air cargo capacity and operations.

• Land Transport: Road freight is key to India's logistics, with digitalization improving efficiency despite differences in state regulations.

• Growth Drivers: Economic activities, infrastructure improvements, and logistics cost reductions are catalyzing market expansion.

Middle East

• Market Growth: Projected to increase from $ 163.57 billion in 2024 to $ 222.63 billion by 2029, at a CAGR of 6.36%

• Capacity Improvements: Indications of enhanced handling capacities and logistics infrastructure.

• Post-COVID Recovery: Shift towards operational efficiency and logistics capabilities expansion.

• Trade Lane Adjustments: Strategic investments and operational adjustments addressing capacity and equipment concerns.

Red Sea

• Freight Rates: Declining trends in freight rates across 2024 in contrast with prior spikes due to security incidents in the area.

• Security Concerns: Increased shipping times and freight rates due to security challenges, including attacks by Houthi rebels in Yemen affecting vessel movement.

• Market Impact: Unexpectedly higher freight rates and complicated pricing due to surcharges reflecting the ongoing security situation.

• Capacity and Demand: The region is experiencing fluctuations in shipping capacity and demand, contributing to the dynamic freight rate environment.

SE Asia

• Market Size: The ASEAN Freight Forwarding Market is estimated at $ 27.48 billion in 2024 and is expected to reach $ 46.32 billion by 2029 at a CAGR of 11%.

• Economic Growth: Renewed economic growth in ASEAN countries is likely to boost demand for cross-border road transportation as trade recovers.

• E-commerce Logistics: The e-commerce logistics market in Southeast Asia is projected to grow by $ 85.12 billion between 2023 and 2028.

• Digital Transformation: Investment in digital transformation and technology within the logistics sector is accelerating, aiming to enhance operational efficiency and customer service.

China

• Market Size: Expected to reach $ 1.86 trillion in 2024 and grow at a CAGR of 5.23% to $ 2.40 trillion by 2029.

• Port Efficiency: Operational improvements have eased congestion at major ports, including Shenzhen and Yantian. The strategic use of nearby ports like Nansha continues to alleviate pressure.

• Trade Recovery: Both the air and ocean freight sectors are seeing normalization with improved schedules and infrastructure supporting supply chain resilience.

• Container Throughput: A significant increase in early 2024, signaling strong trade activity and efficient port operations.

Conclusion

The consensus among most industry trackers is that ocean freight capacity will continue to increase in 2024, with supply likely to outstrip demand. This is partly due to conflicts in the Red Sea and Ukraine, drought in the Panama Canal, and the resulting trade chokepoints.

The outlook for air freight, on the other hand, is considerably more buoyant. Cost of living pressures in some of the world’s most advanced economies will likely add to export volumes, especially from Asia. Air freight is also expected to capitalize on opportunities presented by current disruptions in ocean freight due to geopolitical and environmental reasons.