Air freight 2025: Capacity challenges threaten growth

The global air freight market is poised for another year of growth in 2025, driven by surging eCommerce demand and evolving trade patterns. However, despite a projected 5.8% year-on-year rise in cargo volumes, capacity constraints are expected to test the resilience of the sector.

High-growth markets and consumer-driven sectors will keep cargo volumes robust, especially on routes connecting North Asia, Europe, and North America. In 2025, the air freight sector will also benefit from businesses diversifying their supply chains to mitigate disruptions in ocean freight and geopolitical risks, including ongoing challenges in the Red Sea region.

The continued boom in eCommerce, particularly from Asia, remains a key driver of air freight demand, but increasing scrutiny by regulators may take the steam out of the channel.

Potential effects of the strike

The UK has paused Shein’s stock market listing while it examines allegations of forced labour; the EU is investigating Temu for an alleged breach of the Digital Service Act; Indonesia has banned Temu; and security and tax authorities in the EU, US and elsewhere eyeing customs checks more closely.

Geopolitical tensions, including potential tariff changes under the new US administration, could also impact air cargo demand. Given that the US represents a quarter of China’s cross-border eCommerce volumes and occupies more than half of air freight capacity between these nations, any efforts to impose trade barriers could have significant implications for the industry.

While demand rose by 10% year-on-year in recent months, capacity has only seen a modest 2% increase. This imbalance has pushed load factors to multi-year highs and driven spot rates up by 22% year-on-year. These trends are likely to persist, keeping pressure on pricing and operational efficiency.

Regional dynamics and challenges

• Europe: The transatlantic market faces elevated rates as freighter and belly cargo capacity remains constrained, exacerbated by the winter season. Sea-air volumes and supply chain disruptions linked to the Red Sea crisis continue to bolster European imports from the Middle East.
• Asia: The powerhouse of air freight growth, with double-digit demand projected on key lanes to Europe and North America. However, rates are expected to stay high, and capacity tight, as carriers struggle to meet surging eCommerce requirements. The anticipated cargo rush ahead of potential US tariff changes has yet to materialise but may still emerge as a factor influencing demand.
• Americas: The Americas face ongoing capacity challenges due to South American congestion and shifting EU-to-Americas routes. Regional supply chains are also under strain from higher air freight demand linked to recent port strikes in Canada.

Outlook

Air freight rates will likely stay elevated if demand outpaces capacity, with carriers expanding dedicated services to high-demand regions. However, capacity expansion remains constrained by the limited availability of wide-body freighters and reduced belly cargo options.

While global available cargo tonne-kilometres (ACTKs) are expected to grow, the rate of expansion will slow. This reflects structural constraints within the sector and ongoing challenges in securing sufficient aircraft to meet demand.

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