Global air freight capacity shifts to Asia
Asia
Expect elevated spot rates through January 2025 when shipping cargo via air out of Asia to the United States. This will be driven by strong demand and market volatility. The upcoming Lunar New Year will further tighten space and increase rates.
New U.S. import tariff hikes and shifts in demand due to the averted port strikes added to the uncertainty. Carriers are likely to benefit from these elevated rates as they enter new contract negotiations, with the overall market remaining dynamic and competitive.
Europe
While freighter capacity is improving, be aware equipment remains tight, with airlines still shifting capacity to Asia. Accordingly, spot rates are stubbornly high. Expect additional capacity from carriers at the start of summer schedules in early April.
Capacity constraints and rising operational costs are pushing up air fares in Europe, with economy ticket prices rising by an average of 13% and business class fares by 5% compared to 2019. Europe's total seat capacity for Q4 2023 is at 95.8% of its Q4 2019 level, with intercontinental markets leading the capacity recovery. Supply chain challenges and air travel price inflation continue to impact the market.
LATAM
Air freight spot market rates from Latin America to the United States are expected to remain elevated through January 2025 due to strong demand and market volatility. Key gateways include Mexico City, São Paulo, and Buenos Aires.
Other influencers, like the upcoming Lunar New Year and U.S. import tariff hikes may further tighten space and increase rates. Carriers are well-positioned for upcoming contract negotiations amidst elevated rates and a dynamic, competitive market.
North America
The biggest challenge for U.S. exports remains the South American market. Airlines have shifted freighter capacity to Asia due to strong demand and high yields, leaving other markets struggling for capacity. Strong air demand from Europe and Asia into South America relies on Miami as a transshipment point, causing extreme backlogs (two weeks or more) and higher rates. No relief is expected in the short term, so advanced planning is crucial to mitigate long transit times.
For other destinations, the market is relatively stable when cargo flies on passenger flights. Outside of China, where freighter capacity is abundant, cargo that requires freighter aircraft faces slightly longer transit times and higher rates.
South Asia, Middle East, Africa (SAMA)
Indian air cargo trade is set to accelerate in 2025, driven by ecommerce demand and manufacturing growth. Air cargo volumes are expected to reach 3.6–3.7M tons in 2024-2025, which represents a 9–11% increase.
India aims to handle 10 million tons of air freight annually by 2030. Freight forwarders and airlines are optimistic, focusing on fleet expansions to meet this growing demand. The targeted Q1 start of Navi Mumbai International Airport is expected to enhance cargo flow with its strategic location and head-of-class infrastructure.
Asia Pacific airlines saw a 13.4% demand growth and a 9.3% capacity increase in 2024.
Oceania
The export market from Oceania was busy in December due to high demand for perishable goods like fruit, vegetables, and meat to Asian and Middle Eastern markets, leading to increased rates on some lanes.
Ecommerce and general cargo demand from Asia to Oceania surged in December, causing rates to rise as capacity decreased, a trend expected to continue until after the Lunar New Year.
Demand from Europe to Oceania peaked in December, with flight schedules at capacity, but expect a softer start in January.
Cargo from the United States to Oceania remained stable throughout 2024, with steady demand and an increase in demand in December, expected to taper off in January.