Industry News

Air cargo demand growth is present outside of the China-US trade lane, but it remains to be seen whether trade diversification will be sustained throughout the second half of the year.

Air cargo volumes on the transpacific trade lane dropped 11% year on year in May amid tariff and de minimis changes, said Freightos’ head of research Judah Levine, and was down 12% compared with April.

However, volume growth was up on other trade lanes, partly as e-commerce shippers looked to establish alternative transport arrangements.

Speaking during Freightos’ ‘Global Freight and Trade War Outlook' webinar on 10 July, Levine said: “Looking at most of these other lanes, we see there was a year-on-year growth.

“Even with that China-US de minimis impact on those transpacific China-US volumes, we see that there’s still growth on other lanes, including Chinese e-commerce platforms and volumes that are looking for growth in other markets. And that’s having a positive impact in not letting volumes slip too much.”

Global volumes through May are 3% higher than they were in the same period last year, according to Freightos.

Reflecting on IATA’s predictions that 2025 volumes will be flat compared to 2024, Levine said volumes for the rest of the year will depend on the adaptation of the market to new supply chains and take-up on trade lanes other than China-US.

“It seems that’s going to depend on the success of pan diversification and making up for that volume drop on the transpacific.

“So it remains to be seen whether the second half of the year is actually down and overall evens out what we have for year totals, or if there is a success in diversifying away from that China-US reliance and finding growth in other markets.”

Freightos had additionally noted that the delay of country-specific tariffs until August may not have much impact on air cargo volumes now, given that a lot of shippers have been frontloading goods in recent months.

Meanwhile, as well as volumes, capacity has most definitely shifted away from the transpacific.

Data from Rotate showed that widebody freighter capacity on the lane was down about 13% last month compared to the average for the previous four weeks, said Levine.

“With the drop in volumes, formerly transpacific freighter capacity is shifting elsewhere.

“We’ve seen capacity increasing out of places like Taiwan and Vietnam. Also on lanes like Asia-Europe, which increased 18% last month, according to Rotate.”

Volumes may grow further out of Taiwan and Vietnam until the latest tariff deadline in August, suggested Levine.

But in a weekly update issued on 8 July, Freightos also said “global capacity may now overall be exceeding demand” due to a significant amount of e-commerce volumes exiting the market.

The Freightos Air Index global benchmark is about 7% lower than it was a year ago, said Freightos.

On rates, Levine stated that China-US airfreight rates have increased as capacity has decreased, but are now stable. Rates were up to $5.57/kg in the first week of July, approximately on par with last July

In contrast, China-Europe prices are down 12% in the last month to $3.35/kg.

“This may reflect reports of capacity increases on the lane as freighters have been shifted from the transpacific to other lanes like this one,” noted Levine.

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