Global air cargo volumes sustained their unexpected momentum through August 2025, with demand rising 5 per cent year-on-year (YoY) for the second consecutive month, according to Xeneta. However, falling spot rates and persistent trade uncertainties raise doubts over the market’s resilience in the months ahead.

Despite steady growth in demand, accompanied by a 4 per cent YoY increase in available capacity, global average spot rates fell for the fourth straight month, slipping 3 per cent to $2.55 per kg in August. The decline is likely sharper once currency effects are considered, with the US dollar losing 4 per cent against other currencies in the past year, Xeneta said in a press release.

Shift in trade flows may also be weighing on rates. For example, China–US air cargo was priced at $4.3 per kg in August, but many e-commerce shipments were re-directed to the China–Europe corridor due to US de minimis bans, where rates stood at $3.65 per kg. Such reallocation drags down the global average. A 7 per cent drop in jet-fuel prices may also have helped ease airlines’ costs, muting pressure on rates for now.

Global air cargo demand grew 5 per cent YoY in August for a second month, but spot rates fell 3 per cent to $2.55 per kg, reflecting fragile market conditions.
Trade shifts, US de minimis bans, and a 7 per cent drop in jet fuel shaped flows, while e-commerce offered support.
Analysts caution uncertainty, weak sentiment, and tariff impacts may hinder sustainable growth despite current demand resilience.

The rate decline extended across most major trade lanes, with Southeast Asia–North America and Europe routes seeing the sharpest falls, down over 20 per cent YoY to $4.8 and $3.05 per kg, respectively, as capacity pressures eased. Northeast Asia performed slightly better, with rates to North America down 8 per cent YoY at $4.76 per kg and to Europe holding steady at $4.01 per kg, though backhaul prices slipped 13 per cent on continued trade imbalances. The Transatlantic corridor was the only exception, recording a 5 per cent YoY rise to $1.82 per kg, albeit a marked slowdown from July’s near 20 per cent surge.

“It is often said that airfreight is a bellwether for macroeconomics, but I don’t think it is at the moment,” said Niall van de Wouw, chief airfreight officer at Xeneta. “Right now, volumes are certainly not as bad as people feared, but also not as good as people hoped. In our April data, on the back on the US administration’s ‘Liberation Day’ tariffs announcement, we asked ‘how bad will it get?’ for air cargo demand. We still cannot answer that question.”

“More than ever, shippers are falling into three categories right now,” added van de Wouw. “There are those who will always say ‘no way’ to airfreight because their products simply cannot justify the higher cost of air versus ocean freight. Then there are traditional air cargo customers who always ship goods by air because of its speed and value for their high-priced or more perishable or time-sensitive products. Between these two views sits a bigger group of shippers who will use ocean to move their goods if they can, and airfreight if they must. It is this segment of the market which is driving the upturn in airfreight demand we are seeing.”

E-commerce has been a stabilising force since 2023, driving double-digit monthly growth in 2024. But the removal of the US de minimis threshold for duty-free imports is reshaping flows. While aimed at large Chinese platforms, the changes affect B2B shipments significantly, adding administrative burdens and costs.

“Many SMEs are reacting to these changes, and while B2C may remain resilient, B2B flows will face greater challenges,” van de Wouw observed.

Looking ahead, Xeneta warns that falling purchasing managers’ indices in major exporting economies, weakening US consumer sentiment, and the end of de minimis exemptions will continue to add volatility.

“Uncertainty seems set to remain with so many questions unanswered. The predictions are concerning but, because of this uncertainty, the hurt for airfreight has been softened and delayed. For how much longer anyone’s guess,” van de Wouw concluded.

Fibre2Fashion News Desk (SG)