News / Happy last year in air freight (for some) – and good luck with the next

© Kani Chaothai

“Airfreight hasn’t been a bonanza for everybody in 2024,” said Niall van de Wouw, chief airfreight officer of Xeneta yesterday. 

But it certainly has for some. 

Xeneta’s 2025 outlook webinar showed that air cargo has seen 13 consecutive months of double-digit year-on-year volume growth.

“That’s just quite extraordinary,” said Wenwen Zhang, Xeneta’s airfreight analyst. 

Glyn Hughes, head of TIACA, added: “Let’s recall that 2023 wasn’t the most successful year – right up until the Red Sea crisis. We can almost pinpoint the day when the comparative fortunes of air cargo really took off. When the shipping channels closed, it took between 5% and 8% of the maritime capacity out, which took rates up, longer sailings, more expensive sailings. And the differential between cargo by air and cargo by maritime became much less.” 

Combined with the ecommerce boom, air cargo has had a good year, said Mr van de Wouw. But he added: “Airlines might have seen a double-digit growth in volumes, but freight forwarders have not. Because they typically do not play the same role in ecommerce as they do in B2B or more traditional air freight volumes.” 

Despite this boom year, others were saddened that the ‘peak’ wasn’t particularly peaky. But that was, in fact, an advantage, said Mr van de Wouw. 

“Some people have been disappointed that there wasn’t a peak as they hoped for. And by ‘peak’, they mean high rates, not so much high volume, but high rates, so they can make more money.  

“My take on that is that last year, the rate in a specific market went through the roof. But I think that came at a cost. A lot of relationships were put under pressure between shippers and freight forwarders, and within shippers, between supply chain departments and their finance departments, as to what the heck was going on.  

“And I think at the end of that period, the emotional bank account between shippers and freight forwarders was a lot lower than it was prior to last year’s peak.” 

And what about next year, starting, it looks, with potential tariffs, maritime strikes and new shipping networks?  

“What really jumps out at me is the fact that as an industry we are very limited to really control any of these,” said Mr Hughes.  

“And my concern [in regard to US port strikes] is that I don’t think we’ve got the capacity to move more than a microscopic percentage of [what could be needed]. Available capacity is somewhat limited and it’s dispersed across many, many flights. So I’m not sure how effective would be the response.” 

However, he was more optimistic on tariffs. 

“You might see Chinese manufacturers saying, ‘well okay, I’m going to ship or partially ship for final assembly to Vietnam, to Malaysia, to other parts of South-east Asia’, which interestingly could create even more cargo volume. So what is designed to dampen demand, so people will manufacture in the US, could actually result in an increase in demand for air cargo, as production sites may proliferate across Asia.” 

Mr van de Wouw said there was another, potentially huge, threat to the market. “It’s something I think may be the least likely, but it could have the biggest impact – major cyber attacks, or even worse, incendiary devices, or self-igniting devices. There have been attempts to get it into the air freight supply chain this year.  

“I think it’s quite possible that regulators will put many more processes in place, or even embargo freight on passenger planes for a while, until they figure out what is going on, and that could upset the market in just a matter of a few weeks.” 

He also warned shippers about rate fluctuations. 

“Freight forwarders are buying nearly half of their required capacity in the short-term market, meaning rates are valid for less than 30 days. So, simply speaking, for half of the volumes they’re moving, they do not know what their cost rates will be in four weeks from now, while they’ve given a one-year rate to the shipper. 

“That one-year deal I would say is close to worthless. Because they either will not move it , or they need a higher rate.” 

Mr Hughes said deals should be a win-win. “Airlines want to earn a fair rate of return, and to provide a fair and transparent product for their customers, and make some money in the process. Shippers don’t want to feel that they’re paying more than they necessarily need to for the premium mode of transport.  

“So whether or not it’s indexing, or the transparent systems we have now, there’s lots more distribution tools that are out there so people can get greater access to understand what the market rates are. 

“I think this bodes very well, because it takes away what we used to be accused of, which is operating in a black box. People used to get a rate, they didn’t know why it was determined, they didn’t understand if the routes were thin or busy, or what their load factors were.  

“We’re very blessed with having lots of data now, lots of intelligence.” 

Mr van de Wouw had one final piece of advice: “I think the industry is a little bit tired from dealing with all the issues that have been thrown at it.  

“So get some rest.”