The air cargo industry is highly cyclical, involving many participants, including aircraft manufacturers, cargo airlines, charter operators, and freight forwarders. The ability of companies in different roles to withstand risk varies during these industry cycles.

From the perspective of pure cargo airlines, their primary role is that of capacity providers.

Although cargo airlines also undertake some charter requests from key account customers, they do not have the ability to organize cargo by themselves. In the past, cargo airlines mainly relied on freight forwarders to organize shipments, but nowadays they depend more on major e-commerce platforms. This dependency puts cargo airlines at a certain level of risk during industry cycles.

In the current market structure, e-commerce platforms hold the dominant position by controlling cargo volume, while cargo airlines maintain their strength through controlling capacity. In comparison, freight forwarders are in a relatively weaker position, with their profit margins squeezed by both upstream and downstream players. However, some specialized logistics companies, with the ability to organize cargo, manage to reduce risks and enhance their competitiveness through board chartering or entire flight charters.

For international express companies like FedEx, UPS, and DHL, which have strong end-customer reach, or for companies with stable project clients, the risks associated with chartering are relatively low. These companies, thanks to their robust customer networks and cargo organization capabilities, can maintain a relatively stable business volume even during downward market cycles. Thus, when the market is in an upward cycle, companies' competitiveness mainly lies in their control of capacity. During a downward cycle, however, the ability to reach end customers and organize cargo becomes key.

In the past few years, the air cargo industry has been in an upward cycle, with capacity holders (such as cargo airlines) maintaining a strong position. This phenomenon stems from a temporary shortage of market capacity, leading to a supply-demand imbalance. Additionally, cargo airlines have delivered excellent financial performance over the past few years. To maintain stable performance, cargo airlines must ensure that market freight rates do not experience a significant drop, as protecting freight rates also safeguards stock prices and market value.

In summary, the cyclical fluctuations of the air cargo industry present different challenges to each type of participant. While cargo airlines hold a strong position during upward cycles, their reliance on cargo organization makes them vulnerable in downward cycles. In contrast, specialized logistics companies, international express companies, and global companies with end-customer reach and cargo organization capabilities are better positioned to withstand industry cycles.

In the future, as the market landscape continues to evolve, companies will need to continuously improve their capabilities in capacity control, customer reach, and cargo organization to meet the challenges brought about by industry cycles.

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