Air Cargo Market Updates (Feb 6, 2025)

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- Toby Raworth / Commercial Director, Pelicargo (February 6, 2025)

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Global & Regional Air Freight Rates

Industry News:

Air Cargo Faces Uncertainty Amid Trade Tensions and E-Commerce Disruptions

Global air cargo demand grew just 2% year-on-year in January, a stark contrast to last year’s double-digit increases. Industry analyst Xeneta attributes this slowdown partly to the earlier Lunar New Year but sees no immediate reason to revise its 4-6% growth forecast for 2025. While new US tariffs—particularly on China—raise concerns, Xeneta’s chief airfreight officer, Niall van de Wouw, cautions against panic, emphasizing that the situation remains fluid. However, ongoing trade uncertainty may deter shippers from making major investments, complicating long-term planning.

A key risk is the potential suspension of the de minimis exemption, which allows duty-free entry of low-value shipments into the US. Given that China’s cross-border e-commerce shipments to the US accounted for 25% of total global sales and over 50% of cargo capacity from China to the US, new restrictions could significantly disrupt airfreight operations. Van de Wouw argues that while prices may rise, the real challenge lies in delays, which could weaken consumer demand. If volumes decline, general freight shippers may benefit from redirected capacity, potentially easing rates in other markets.

Despite January’s modest cargo growth, global spot rates remained 17% higher year-on-year, driven by factors like the e-commerce boom, limited aircraft supply, and geopolitical disruptions. Rates varied across regions, with the highest gains seen in Middle East-Europe trade lanes due to Red Sea disruptions. However, trade imbalances led to declines in backhaul corridors. Van de Wouw advises patience, noting that while e-commerce and tariff uncertainties loom, drastic shifts in air cargo demand remain speculative at this stage.

Source: Xeneta, AirCargoNews

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