How Air Cargo Works: Belly Freight, Freighters, and the Supply Chain

The Air Cargo Supply Chain: An Overview

Air cargo moves approximately 35% of global trade by value while representing less than 1% by weight — a statistic that captures the essence of what air freight does in the global economy. It is the channel for goods that are too valuable, too perishable, or too time-sensitive to wait for ocean shipping. Semiconductors, pharmaceuticals, fresh cut flowers, live animals, fashion season launches, automotive parts for just-in-time manufacturing lines, and emergency medical equipment all move by air precisely because the speed premium justifies the cost premium — which runs 4–6 times the cost of ocean freight per kilogram on most routes.

The air cargo supply chain begins long before a shipment reaches an airport. A shipper — a manufacturer, exporter, or trader — decides to send goods by air and engages a freight forwarder, who is the primary commercial intermediary in most air cargo transactions. The freight forwarder does not own aircraft; they consolidate shipments from multiple shippers, negotiate rate agreements with airlines, prepare documentation, and coordinate the complete door-to-door logistics chain including trucking to the airport, airline booking, customs brokerage, and delivery at destination. Most air cargo reaches airlines through freight forwarders rather than directly from shippers.

Airlines offer cargo capacity through two distinct channels: belly cargo on passenger aircraft, and dedicated freighter aircraft. Belly cargo uses the space in the lower deck of passenger aircraft — the hold that carries checked baggage — for commercial freight. Every widebody passenger flight generates belly cargo capacity: a Boeing 777-300ER carries approximately 20 tonnes of cargo in addition to passenger baggage. Narrow-body aircraft carry less cargo (an A320 typically offers 2–4 tonnes of commercial belly capacity), but their high frequency on short-haul routes makes them important in the cargo network overall. Freighter aircraft — Boeing 747-8F, 777F, Airbus A330F, or converted passenger aircraft — carry cargo exclusively, with capacities of 100–135 tonnes and the ability to carry oversize shipments, dangerous goods, and high-density freight that passenger aircraft restrictions prohibit.

The split between belly and freighter capacity varies significantly by geography and cargo type. The transpacific cargo market — moving electronics, consumer goods, and manufactured products between Asia and North America — relies heavily on freighter aircraft operated by FedEx, UPS, Cargolux, Cathay Pacific Cargo, and Korean Air Cargo, supplemented by the substantial belly capacity of the many daily widebody passenger services between Asian and US hub cities. The transatlantic market has historically been more belly-dependent. The Middle East cargo market — driven by Emirates SkyCargo, Qatar Airways Cargo, and Etihad Cargo — uses both belly capacity on their massive widebody passenger fleets and dedicated freighters to serve a hub-and-spoke model connecting Asia, Europe, and the Americas through their Gulf hub airports.

The pandemic period of 2020–2021 provided a dramatic demonstration of air cargo's relationship with passenger aviation. When COVID-19 collapsed passenger travel by 70–90%, the belly capacity that carries approximately half the world's air cargo disappeared almost overnight. Cargo demand did not disappear — it increased sharply as e-commerce surged and medical supply chains required air freight for PPE, vaccines, and pharmaceuticals. Airlines responded by converting passenger aircraft to cargo-only operations, installing cargo in passenger cabin seats and overhead bins, and accelerating retirements of older aircraft in favor of more efficient freighters. The result was a period of extraordinary cargo rate increases — spot rates from Shanghai to Europe reached $8–10 per kilogram in 2021, compared to pre-pandemic rates of $1.50–2.50 — that generated cargo revenue windfalls for airlines that partially offset their passenger losses.

Booking and Documentation: The Paperwork of Air Freight

Air cargo is one of the most documentation-intensive logistics channels, reflecting the complexity of international trade regulation, customs requirements, safety compliance, and multi-party commercial arrangements. Understanding the core documents is essential for anyone shipping or receiving goods by air.

The Air Waybill (AWB) is the master document of every air cargo shipment. It serves simultaneously as a receipt for the goods, a contract of carriage between the shipper and the airline, a customs declaration in some jurisdictions, and an instruction to the airline for handling and delivery. An AWB carries an 11-digit number — the first three digits identify the airline (the carrier code), the remaining eight identify the specific shipment. Master Air Waybills (MAWBs) cover a freight forwarder's consolidated shipment from an airline's perspective; House Air Waybills (HAWBs) cover individual shippers' consignments within that consolidation from the forwarder's perspective.

The Commercial Invoice documents the transaction between seller and buyer — describing the goods, their value, and the terms of sale. Customs authorities use the commercial invoice to assess duties and taxes on imported goods, and misrepresentation of value on the commercial invoice is one of the most common forms of customs fraud globally. The Packing List details the contents of each carton or pallet within the shipment — item descriptions, quantities, weights, and dimensions that ground handlers and customs inspectors use to verify the shipment against the invoice.

The Certificate of Origin certifies the country where the goods were manufactured, which determines the applicable tariff rate under various trade agreements. A garment manufactured in Bangladesh and exported to the EU benefits from preferential tariff rates under the EU's Generalized Scheme of Preferences, but only if the certificate of origin correctly documents Bangladesh as the country of manufacture. Incorrect certificates of origin — whether through error or deliberate mislabeling to circumvent tariffs — are a significant source of customs enforcement activity.

Special cargo categories require additional documentation. Dangerous goods (DG) shipments must be accompanied by a Shipper's Declaration for Dangerous Goods that identifies the specific hazardous material using its UN number, packing group, and hazard class, certifies that it has been packaged in accordance with IATA Dangerous Goods Regulations (DGR), and confirms that the quantity is within applicable limits. The DGR, updated annually by IATA, runs to over 1,000 pages and is the industry's primary reference for dangerous goods classification and packaging requirements. Violations — shipping undeclared lithium batteries, improperly packaged chemicals, or prohibited goods — can result in significant fines and contribute to serious aircraft safety incidents.

Electronic air cargo systems are progressively replacing paper documentation. IATA's e-AWB initiative — launched in 2010 with a goal of achieving 100% paperless air cargo — has achieved e-AWB penetration rates exceeding 80% on many major corridors. The benefits are real: electronic documents are faster to transmit, harder to lose, easier to verify, and compatible with advance cargo information systems that customs authorities in the US, EU, and many other jurisdictions now require before cargo is permitted to be loaded onto aircraft destined for their territories.

Aircraft Loading: Weight, Balance, and Unit Load Devices

Loading cargo onto an aircraft is governed by physics — specifically by weight and balance requirements that determine how load must be distributed across the aircraft's cargo holds to keep the center of gravity within limits that allow safe flight. An aircraft loaded with too much weight concentrated at the tail will be nose-light, unable to rotate during takeoff. Too much weight forward creates an opposite problem. Load planning ensures that every kilogram loaded is positioned to maintain CG within the envelope for each phase of flight.

Freighter aircraft use two unit load device (ULD) formats: pallets and containers. Pallets are flat aluminum platforms — the main deck pallet for a 747F measures 88 x 125 inches — onto which freight is stacked and secured with nets. Containers (cargo containers or igloos) are enclosed aluminum or composite structures that fit into the aircraft's contoured lower deck or main deck, protecting cargo from handling damage and weather. ULDs are standardized by IATA to fit specific aircraft types, and the ULD management system — tracking which ULDs are loaded on which aircraft, at which stations, and their empty versus loaded status — is a significant logistics challenge for carriers with large freighter fleets.

The loading sequence for a freighter aircraft is carefully planned. Heavy, dense cargo is loaded first and positioned to achieve target CG. Less dense cargo fills the remaining volume. Temperature-sensitive pharmaceutical cargo is typically loaded last and positioned closest to temperature-controlled zones. Live animals are loaded in appropriate holds with temperature control and are typically the last cargo boarded and first cargo offloaded at destination, minimizing animal stress.

Special cargo presents unique loading challenges. Oversized cargo — industrial machinery, aerospace components, outsized military equipment — may require the main deck floor locks to be positioned in non-standard configurations, or may require charter of specific aircraft types (the Boeing 747 Large Cargo Freighter, or the Antonov AN-124 for the largest items) that provide main deck loading through nose-loading doors or swing-tail configurations. Live horses traveling by air — a significant market supporting the international equestrian competition circuit — are loaded in custom horse stalls occupying multiple main deck pallet positions, with specific weight and CG implications that require dedicated load planning expertise.

Cold chain cargo — pharmaceuticals, vaccines, fresh produce, seafood — requires temperature-controlled handling throughout the cargo journey: temperature-controlled trucks delivering to the airport, temperature-controlled acceptance facilities at the cargo terminal, pre-conditioned ULDs or dry ice or gel pack cooling for the aircraft hold, and expedited handling at destination to minimize time outside the controlled temperature chain. The pharmaceutical industry's adoption of air freight as the primary channel for temperature-sensitive biological products has driven major investment in cargo terminal cold chain infrastructure at airports including Amsterdam Schiphol, Luxembourg Findel, and Brussels Airport, which have developed reputations as pharmaceutical cargo hubs with specialized handling expertise.

Ground handling at cargo facilities involves the entire sequence from truck dock to aircraft loading position. Cargo arrives by truck, is weighed and measured, screened for security (X-ray and physical inspection), documented, transferred to ULDs, moved through the facility by forklift and conveyor, and inducted into the aircraft load. Major cargo hubs process thousands of tonnes per day through these facilities — FedEx's hub at Memphis International Airport is the largest cargo facility at any airport globally, processing over 4 million packages per night through a highly automated sorting system with hundreds of kilometers of conveyor belts.

Customs Clearance: The Regulatory Gateway

Every international air cargo shipment must pass through customs clearance — the process by which customs authorities verify that imported goods comply with trade regulations, assess applicable duties and taxes, and either release the goods for delivery or detain them for further examination. Customs clearance is the most time-variable element of the air cargo supply chain, with straightforward shipments clearing electronically within minutes and complex shipments subjected to physical examination taking days.

Advance electronic filing requirements have fundamentally changed the timing of customs clearance for air cargo. The US CBP's Air Cargo Advance Screening (ACAS) program requires electronic advance cargo information to be filed before loading at the origin airport — not upon arrival in the US. The EU's Import Control System 2 (ICS2) program, phased in from 2021, requires advance filing of Entry Summary Declarations before departure from origin for goods entering the EU. These pre-departure filing requirements allow customs authorities to conduct risk assessment and identify high-risk shipments before the aircraft departs, enabling targeted examination planning and in some cases preventing high-risk cargo from being loaded.

Customs valuation is a persistent source of dispute in international air cargo. Customs duties are typically assessed as a percentage of the goods' customs value — which in most jurisdictions is the transaction value (the price actually paid) adjusted for freight and insurance costs to the point of importation. Under-valuation — declaring a lower value to reduce duty liability — is detected through price comparison databases, intelligence from partner customs authorities, and physical examination. E-commerce has created particular customs valuation challenges as millions of small consumer packages, often with minimal documentation and values near or below de minimis thresholds (below which duties are not assessed), flood into major markets.

The de minimis value threshold is a significant policy issue in global air cargo. The US maintains an $800 per shipment de minimis — meaning individual parcels valued below $800 clear customs duty-free and with simplified documentation. This threshold, raised from $200 in 2016, has been a major enabler of direct-to-consumer e-commerce from China via air, with companies like Shein and Temu building business models around splitting large orders into individual parcels that clear individually under the threshold. The EU's de minimis for customs duties was 22 euros until 2021, when it was eliminated entirely — requiring VAT collection on all imports regardless of value, though customs duties still apply only above 150 euros.

Controlled goods — pharmaceuticals requiring import permits, agricultural products subject to phytosanitary requirements, CITES-protected species (including ivory, exotic animal products, and protected plants), and strategically controlled electronics requiring export licenses — require additional documentation and regulatory clearance that can extend clearance timelines significantly. Agricultural import requirements in Australia, New Zealand, and the US impose strict biosecurity requirements including fumigation of certain wooden packaging materials, inspection for soil contamination, and outright prohibition of many plant and animal products that would freely enter other markets.

Customs broker expertise is the primary tool for managing customs clearance complexity. Customs brokers — licensed in their national jurisdictions — prepare customs declarations, advise on tariff classification and valuation, manage permit requirements, and resolve examination holds. Major freight forwarders maintain licensed customs brokerage capabilities in all major trade markets; smaller forwarders outsource to independent customs brokers. The quality of customs brokerage directly affects clearance speed, duty accuracy, and compliance — all of which affect the total cost of an air cargo shipment.

The Air Cargo Market: Size, Players, and Trends

The global air cargo market generates approximately $200 billion in annual revenue in a normal year, with significant volatility driven by e-commerce demand cycles, trade policy changes, and supply chain disruptions. IATA reports approximately 65 million tonnes of freight transported by air annually pre-pandemic, with yield (revenue per tonne-kilometer) and volumes recovering to above pre-pandemic levels in 2021–2022 before normalizing as ocean shipping capacity recovered and e-commerce growth rates moderated in 2023–2024.

The largest air cargo carriers globally — measured by freight tonne-kilometers — are FedEx, UPS, Qatar Airways Cargo, Emirates SkyCargo, and Cathay Pacific Cargo. The presence of the two US integrators (FedEx and UPS) at the top of this ranking reflects their vertically integrated model: they own aircraft, ground handling operations, trucks, package sorting facilities, and customs brokerage, offering end-to-end express delivery as a single commercial service rather than the fragmented airline-forwarder-handler chain that characterizes most commercial air freight. FedEx's fleet of over 650 aircraft — the largest dedicated cargo aircraft fleet in the world — and its extensive retail location network make it effectively a logistics infrastructure company that happens to operate the world's largest private airline.

The integrator model — pioneered by FedEx with its hub-and-spoke overnight delivery network launched in 1973 — fundamentally changed expectations about air cargo speed and reliability. Before FedEx, air cargo was an ancillary service of passenger airlines, with delivery times measured in days and reliability determined by available belly space on scheduled passenger services. FedEx's commitment to overnight delivery of packages to and from any US address — backed by its own aircraft, trucks, and sort facilities — established that air freight could be as reliable as a commercial product promise. UPS entered air express in 1988; DHL, originally an international express carrier founded in 1969, built a global network parallel to FedEx and UPS. The three integrators now dominate express air cargo globally while traditional airlines and forwarders compete in the general freight market.

E-commerce has become the dominant growth driver in air cargo, reshaping the market in ways that are still playing out. The direct-from-China-to-consumer model — shipping individual orders from Chinese manufacturers directly to consumers in the US and Europe by air — has created massive new demand for air cargo capacity on transpacific and trans-Eurasian corridors. Cainiao Network (Alibaba's logistics arm) and SF Express have invested in dedicated freighter fleets to support this flow. Cargo volumes through Zhengzhou Airport — where Foxconn (Apple's primary iPhone assembler) and numerous e-commerce fulfillment operations are based — have made it one of the fastest-growing cargo airports globally.

Sustainability is emerging as a significant commercial consideration in air cargo. The carbon intensity of air freight — approximately 500 grams of CO2 per tonne-kilometer, compared to 10–30 grams for ocean shipping — makes it a target for corporate carbon reduction programs. Major shippers including Amazon, Unilever, and Maersk have announced commitments to reduce supply chain emissions that include shifting volume from air to ocean for non-urgent shipments. SAF adoption in cargo operations is progressing: several airlines have signed multi-year SAF offtake agreements backed by cargo customer contributions. DHL Group has committed to 30% sustainable aviation fuel use by 2030 and offers customers the option to purchase SAF allocation to cover their shipments' carbon emissions. The cost premium for SAF — still 3–5x conventional jet fuel — means that SAF cargo tariff supplements are real commercial items that freight forwarders and shippers are increasingly negotiating as part of freight rate agreements.

The air cargo market's cyclicality remains one of its most challenging characteristics for operators. The post-pandemic cargo boom of 2021–2022 — when yields reached 2–3x pre-pandemic levels and airlines reported cargo as their most profitable business unit — was followed by a normalization in 2023 as ocean shipping backlogs cleared, belly capacity returned with passenger travel recovery, and e-commerce growth rates moderated. Airlines that had invested in additional freighter capacity during the boom found themselves with overcapacity as yields fell back toward historical levels. The capacity-demand imbalance in air cargo tends to resolve over 18–24 month cycles as operators adjust fleet and capacity deployment, but the duration and amplitude of individual cycles is difficult to forecast, making capital investment in freighter aircraft particularly challenging to time correctly.