The air cargo industry stands at a pivotal crossroads as we enter 2025. According to Thomas Kempf, Senior Director of Global Air Freight, Flexport, air cargo capacity is expected to grow by a maximum of 4% to 5%, while demand could rise by 6% to 10%, depending on the trade lane. This growing demand underscores the importance of sustainability, which is now driving innovation and inspiring transformative changes across the sector. Kempf’s comments appear in the 2025 Air Freight Market Outlook.
From Hong Kong Air Cargo Terminals Limited’s (Hactl) upcycling old uniforms into reusable cups to airlines like Lufthansa Cargo and ANA Cargo adopting AeroSHARK technology, which reduces aircraft frictional resistance by about 1% and cuts fuel consumption, to major airports deploying electric dollies and tow trucks, the air cargo industry is demonstrating a strong commitment to sustainability. Significant strides are also being made toward embracing Sustainable Aviation Fuel (SAF), reflecting the sector’s collective efforts to minimise its environmental footprint.
As environmental pressures and regulatory demands intensify, stakeholders across the supply chain are pioneering groundbreaking solutions to reshape air freight into a more sustainable and eco-conscious industry.
The current state of sustainability in air freight
The aviation industry’s commitment to achieving net-zero carbon emissions by 2050 has catalysed unprecedented changes in the air cargo sector. According to the International Air Transport Association (IATA), aviation accounts for 3% of global carbon emissions. While this percentage might seem modest, it represents millions of tonnes of CO2 emissions annually, pushing the industry to seek innovative solutions across all operational aspects.
Sustainable aviation fuel: A game-changer for cargo operations
The adoption of SAF has emerged as one of the most promising pathways toward decarbonisation. Major carriers, including Cathay Cargo, IAG Cargo, and Air France-KLM, along with several leading cargo airlines, have committed to replacing at least 10% of their conventional fuel with SAF by 2030.
“We are taking a multi-pronged approach to reduce our emissions in order to reach net-zero carbon emissions by 2050 and transition towards low-carbon travel. We have committed to using SAF for 10% of Cathay Pacific operating flights’ jet fuel consumption by 2030,” says Rajesh Menon, Regional Head of Cargo for South Asia, Middle East, and Africa, Cathay Cargo.
According to IATA, the use of SAF in commercial aviation can reduce CO2 emissions by up to 80%.
The European Union’s ReFuelEU Aviation initiative aims to achieve 2% SAF usage in aviation across the EU by 2025. Meanwhile, the SAF Grand Challenge, launched in 2021, is a US government-led effort involving the Department of Energy (DOE), the Department of Transportation (DOT), and the US Department of Agriculture (USDA). This initiative seeks to increase domestic Sustainable Aviation Fuel (SAF) production to 3 billion gallons per year by 2030 and 35 billion gallons per year by 2050, with the goal of significantly reducing aviation’s CO2 emissions.
“As a global logistics service provider, we are constantly working to reduce emissions in the supply chains of our customers. For several modes of transport, such as ship, truck, or airplane, biofuels help us to avoid greenhouse gas emissions not only in the distant future but already today. SAF is an important part of our decarbonisation journey in air freight. It has a direct impact with proven CO2 emission reductions in our customers’ supply chains. Since SAF can seamlessly serve as a drop-in solution for existing aircraft, it offers a viable alternative to fossil jet fuel. Through virtual allocation of the biofuel, it can be booked for all kinds of air shipments on any route and on any airline used. The choice is available,” says Mario Arnold, Head of Global Public Relations / Media Spokesperson, DB Schenker.
Revolutionary changes in ULD and pallet manufacturing
One of the most exciting developments in air cargo sustainability has emerged from an often-overlooked sector: Unit Load Device (ULD) and pallet manufacturing. This segment has become a hotbed of innovation, with manufacturers developing lightweight, sustainable materials that significantly reduce aircraft fuel consumption while maintaining or even improving durability.
According to data from Stratview Research, composite-based containers are 20% to 40% lighter than similar-sized aluminum-based containers. These advanced materials, such as recycled carbon fiber composites and bio-based polymers, are not only lighter but also more durable, extending the lifespan of ULDs and reducing waste.
Furthering these efforts, the recent introduction of the ULD Climate Impact Label aims to evaluate ULDs based on key factors like weight, spare part availability, and second-life potential. To solidify the commitment to this initiative, a Memorandum of Understanding (MOU) was signed at the ULD Care conference in Istanbul, involving leading Original Equipment Manufacturers (OEMs) such as Aerotuf, AmSafe Bridport/Nordisk Aviation, AviusULD, Palnet GmbH Air Cargo products, Satco Inc., Taiwan Fylin Industrial Co. Ltd., and VRR. This MOU marks a significant step toward the widespread adoption of the label. The label promotes transparency, encourages responsible end-of-life management, and ensures that materials used in ULDs are both recyclable and reusable.
“We are taking a multi-pronged approach to reduce our emissions in order to reach net-zero carbon emissions by 2050 and transition towards low-carbon travel.”Rajesh Menon, Cathay Cargo
eVTOLs: The next frontier in urban air logistics
Electric Vertical Take-Off and Landing (eVTOL) aircraft are emerging as a transformative force in the air cargo industry, promising to revolutionise urban logistics and last-mile delivery operations. As cities worldwide grapple with increasing congestion and mounting environmental concerns, these innovative aircraft are positioning themselves as a crucial solution for efficient, sustainable air cargo operations in urban environments.
The technology marks a significant departure from traditional aviation, combining the vertical take-off capabilities of helicopters with the efficiency and sustainability of electric propulsion. In the cargo sector, these aircraft offer a compelling value proposition: zero direct emissions, reduced noise compared to conventional aircraft, and the ability to operate from compact vertiports rather than traditional airports. This flexibility could potentially unlock new logistics networks in urban environments where traditional air cargo operations have been impractical or impossible.
Several companies are emerging as pioneers in the cargo eVTOL space, introducing innovative solutions to the market. Beta Technologies, a US-based aerospace company, has developed the ALIA A250, an electric vertical takeoff and landing (eVTOL) aircraft, and the ALIA CX300, an electric conventional takeoff and landing (eCTOL) aircraft. Both models are designed for dual-use, catering to cargo and passenger operations. The ALIA A250 offers a range of approximately 250 miles, while the ALIA CX300 boasts a range of 336 nautical miles. Both aircraft feature a cargo capacity of 200 cubic feet.
The company achieved a significant milestone in November last year with the inaugural flight of the first production model of its ALIA CX300 aircraft.
Beta Technologies’ ALIA-250 eVTOL for efficient cargo and passenger transportation
VoloDrone represents another significant development, designed specifically for cargo operations with the capability to carry payloads of up to 200 kilos. These companies have already conducted successful trials with logistics partners, demonstrating the practical potential of their systems in real-world scenarios.
Companies are also working diligently on developing all-weather operation capabilities, a crucial feature for reliable commercial operations.
The evolution of sustainable air cargo terminals
Air cargo terminals are undergoing a remarkable transformation in their journey toward sustainability, marking a significant shift in how ground operations contribute to the industry’s environmental goals. Modern sustainable cargo terminals are emerging as sophisticated facilities that combine cutting-edge technology with environmentally conscious design principles. These facilities are incorporating solar panels across vast roof spaces, generating significant portions of their energy requirements through renewable sources. Advanced building management systems optimise energy consumption by intelligently controlling lighting, heating, and cooling based on real-time operational needs.
“Cathay Cargo Terminal’s strong corporate sustainability culture is a focus on circularity. Since 2017, Cathay Cargo Terminal has implemented measures to recycle plastic sheets from import cargo shipments. The recycle rate has reached 100%. The recyclables are being made into new cover sheets to be used in the terminal, which contain 50% recycled post-consumer plastics. The terminal is also one of the first cargo handling-companies to achieve IATA Environmental Assessment (IEnvA) certification in Asia,” says Menon of Cathay Cargo.
Leading cargo terminals have implemented innovative solutions such as rainwater harvesting systems and water recycling facilities, significantly reducing their freshwater consumption. Electric ground support equipment (GSE) has become increasingly prevalent, with terminals installing comprehensive charging infrastructure to support the transition from traditional fossil fuel-powered equipment. Some facilities have gone further by implementing automated storage and retrieval systems (AS/RS) that not only maximise space utilisation but also reduce energy consumption through optimised movements and reduced lighting requirements.
Challenges and future prospects
Despite progress, significant challenges remain. The limited availability of SAF and its higher cost compared to conventional jet fuel continue to be major obstacles. According to data by IATA, in Europe during 2024, the market premium for HEFA SAF (Hydroprocessed Esters and Fatty Acids Sustainable Aviation Fuel) was approximately $1,000 per tonne.
“One of the primary challenges is the high cost of SAF compared to conventional jet fuel. Additionally, the supply of SAF is currently limited, which can hinder large-scale adoption. A further scale up of SAF usage requires more government support in incentivising more production and usage as well as facilitating the development of necessary infrastructure around the world for SAF transport, blending and uplift,” states Menon of Cathay Cargo.
Additionally, Infrastructure development for sustainable operations requires substantial investment, and the industry must balance immediate operational needs with long-term sustainability goals.
The role of collaboration and innovation
The transformation of air cargo sustainability relies heavily on collaboration across the supply chain. Manufacturers, airlines, freight forwarders, and technology providers are increasingly working together to develop integrated solutions. This collaborative approach has led to innovations in several key areas, including the development of biodegradable packaging materials specifically designed for air transport, the creation of shared ULD pools to optimise equipment utilisation, the implementation of blockchain technology for transparent sustainability tracking, and the integration of renewable energy sources in ground operations. These efforts are collectively driving the industry toward a more sustainable future.
Envirotainer, a specialist in temperature-sensitive pharmaceutical shipments, has partnered with Air France KLM Martinair Cargo (AFKLMP) to support the development and adoption of sustainable aviation fuel (SAF). By investing through AFKLMP Cargo’s SAF programme, Envirotainer aims to assist pharmaceutical companies in meeting their sustainability goals while ensuring the integrity of temperature-sensitive shipments.
“We have expanded the Corporate SAF Programme globally by bringing in 16 partners in 2024, with a record amount of 6,050 metric tonnes of SAF committed, led by some leading cargo partners such as DB Schenker and Kuehne + Nagel,” says Menon of Cathay Cargo.
As we progress through 2025, the air cargo industry’s commitment to sustainability continues to strengthen. The convergence of innovative materials, smart technology, and operational efficiency improvements is creating a new paradigm for sustainable air freight.
