Market Trends of Iraq Air Freight Transport Industry
Growing International Trade Aggreements
Iraq is increasingly engaging in trade agreements with various countries and regions, which stimulates import and export activities. For instance, on April 17, 2024, Iraq, in a significant move, ratified the Singapore Convention, simplifying the enforcement of mediated settlement agreements. This step is poised to bolster Iraq's international trade and commerce. Iraq's participation in global trade necessitates efficient transportation of goods to and from international markets. Air freight provides a fast and reliable option, particularly for high-value, perishable, or time-sensitive goods such as electronics, pharmaceuticals, and fresh produce.
In November 2023, the Iraqi government facilitated a collaborative agreement between the Iraqi Civil Aviation Authority (ICAA) and the International Civil Aviation Organization (ICAO). This agreement aims to bolster aviation infrastructure and transport in Iraq. On the other hand, beyond traditional sectors like oil and gas, Iraq is diversifying its economy into areas such as agriculture, manufacturing, and services. These sectors often rely on air freight to access international markets for both raw materials and finished products. Hence, the demand for Iraq's international air freight transport is expected to grow.
Owing to the above points, Iraq's growing international trade agreements are significantly driving the demand for air freight transport, underscoring the need for robust aviation infrastructure and reliable logistics services.
E-commerce Surge in Iraq is Set to Propel Air Freight Transport Market Growth
According to data from Go Globe, the Iraqi e-commerce market surged by a notable 14.1% in 2023, surpassing the global growth rate of 9.6% for 2023. E-commerce customers expect shorter delivery times, often within days or even hours. Hence, air freight transport provides the speed needed to meet these expectations, especially for high-value or perishable goods.
Dnata, one of the largest air services providers in 2022, handled 20,000 tons of cargo in Iraq. Responding to escalating demand, Dnata inaugurated a new cargo warehouse in 2023, substantially bolstering its air cargo services in the region. In addition, Dnata's latest cool chain facility in Iraq, prioritizing pharmaceuticals and other perishables, has an annual processing capacity of 10,000 tons.
Online platforms are witnessing a surge in purchases, with cross-border e-commerce gaining momentum in Iraq. Orisdi, an e-commerce platform based in Iraq, exemplifies this trend. Specializing in products ranging from perfumes and cosmetics to appliances and electronics, Orisdi secured a significant bridge investment in August 2023. As online retail expands, e-commerce is poised to become a primary growth catalyst for Iraq's air freight industry. The escalating shipments, particularly via air freight, are set to underpin the growth trajectory of Iraq's air freight market in the coming years.
