LONDON--(BUSINESS WIRE)--According to the latest procurement intelligence report from Technavio, the global air freight services market is expected to grow at a CAGR of 3.6% over the next five years due to increased air traffic due to increased trade flow in emerging economies such as APAC, the Middle East, and Africa.
The research report titled ‘Global Air Freight Services Market - Procurement Market Intelligence Report 2017-2021’ provides an in-depth analysis of category spend, best procurement practices and cost saving opportunities, aimed at helping organizations achieve superior business performance. The report also provides insights on pricing, supplier positioning, and top companies, enabling sourcing professionals to improve their competitive advantage through procurement excellence.
“Key markets such as Europe and North America contributed up to 45% of the total cargo traffic in 2015,” says lead Technavio procurement specialist Angad Singh for category spend intelligence. “Technological innovations such as e-freight combined with the high growth potential of the e-commerce industry is expected to drive market growth over the forecast period,” adds Angad.
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Cost saving opportunities in the global air freight services market
The adoption of various cost-optimization levels helps buyers of air freight services realize direct cost savings and enhance category management and value benefits (including reduced procurement complexities).
Technavio procurement experts have segmented the cost saving opportunities in the global air freight services market into the following value-enhancement opportunities:
- Adoption of technology
- Supplier Competition
- Adoption of negotiation strategies
- Optimization of procurement practices
- Bundling of services
Adoption of technology
Suppliers adopt smart, collaborative logistics to provide real-time and swift turnaround solutions to buyers in response to seasonal and dynamic demand.
Other key technologies adopted by suppliers in the market are e-freight, cargo management solutions, temperature controlled ULDs, and GPS solutions. These technologies save a significant percent of the total category spend to the consumers.
Adoption of negotiation strategies
Buyers with higher volumes of cargo per flight have better negotiation power with the suppliers. Also, businesses operating in markets with a high growth potential can draw better deals with suppliers by using strategic advantages.
Industries such as manufacturing, pharmaceuticals, retailing, and automotive are highly dependent on the air freight services market for transportation of high-value and critical products.
Bundling of services
Industries are partnering up with suppliers that have services across the entire service delivery process such as pick-up, easy documentation, packaging, handling, and door delivery.
Bundling of services results in savings of up to 15% for the suppliers of air freight services.
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Technavio analysts employ primary as well as secondary research techniques to ascertain the size and vendor landscape in a range of markets. Analysts obtain information using a combination of bottom-up and top-down approaches, besides using in-house market modeling tools and proprietary databases. They corroborate this data with the data obtained from various market participants and stakeholders across the value chain, including vendors, service providers, distributors, resellers, and end-users.
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