News / Shippers in the dark on air cargo, putting a dampener on peak season

r © Kevin Nieuwland

Downward pressure on rates is likely to see airlines attempting price rises – but market uncertainty and front-loading could see a subdued peak season in airfreight on the transpacific, if not Europe. 

Lack of certainty on the legality of tariffs ahead of the ecommerce peak season and Christmas sales is splitting shippers over their use of airfreight, say market observers. 

“With regards to Singles Day, Black Friday, Christmas sales – some retailers view it as too risky to resume full imports without tariff clarity, prioritising cost control over stocking up (bearing in mind that there may well be inventory already in place from earlier rushes), which could lead to a subdued sales season unless trade policies shift dramatically,” explained Danielle Hales, regional pricing & procurement manager for Crane Worldwide in the UK. 

“Airlines are eager to negotiate rate increases in Q4, but have not really been successful. Big ecommerce players are still active in the EU market, but have also turned out to be a bit conservative in capacity planning … incumbent LSPs tended to reduce long-term charter contracts in exchange of more ad-hoc deals.” 

Ample capacity, along with high inventory levels, could further dampen airfreight rates. 

“We’ve seen some front–loading,” said Sanne Manders, president of Flexport. “Most customers say they have enough inventory right now, so enough for the holiday season.

“So yes, some shippers may pause. This is not a stable business context; companies will make their own decisions – am I going to take the risk, does it work for me to bring it in under the current conditions? 

“Shippers might still get some shipments in, but they’re not worried about the holiday season.” 

European forwarders have a more optimistic view of Q4. One senior airfreight forwarder said: “Asia-Europe might become a little bit hotter than everybody expects, because of the ecommerce transition from the transpacific, which hardly exists anymore.  

“These businesses are now moving over to Saudi Arabia, Middle East, as well as to Europe. And there might be opportunities that ecommerce becomes stronger and stronger into Europe, out of Asia.  

“Somehow Black Friday and Cyber Monday are in the European market, despite Europe not having Thanksgiving, and Christmas is coming. There is really a likelihood that Asia-Europe might be among the stronger lanes over Q4.” 

WorldACD said on Friday that market data supported claims that Asia-Europe was stronger than the transpacific. Tonnages in August from China and Hong Kong to the US were flat, month on month, but down 5% year on year, while to Europe volumes fell slightly in August from July – but, year on year, volumes were up 11%. 

“Those figures back up anecdotal reports from multiple sources of freighter capacity being shifted from China/HK-US to other markets, and particularly to China/HK-Europe destinations in response to the changes in US de minimis rules for China/HK, and higher tariffs,” noted WorldACD. 

“On the pricing side, China/HK to US spot rates rebounded slightly from their levels in July, rising 5%, month on month (MoM), although YoY they are down 9%. China/HK to Europe spot rates, meanwhile, slipped back by 3% MoM, but were stable year on year.” 

Volumes have been surprisingly resilient, but rates are weakening. 

“Despite the rise in cargo volumes, alongside similar 4% year-on-year growth in capacity supply, the average global spot rate fell for a fourth month in a row, down 3%, to $2.55 per kg,” noted Xeneta’s chief airfreight officer, Niall van de Wouw, last week.  

“And it’s these freight rates which may signal a challenging next few months for the air cargo market.” 

Xeneta explained: “The August decline in spot rates is likely even steeper once currency effects are considered: all rates are converted into dollars, which have lost 4% against other currencies over the past year. Shifts in trade flows may be weighing on air cargo rates. Consider China-US air cargo, for instance, which, in August, was priced at $4.30 per kg. Many ecommerce shipments have been re-directed to the China-Europe corridor due to US de minimis bans, where the rate was $3.65 per kg. Such reallocation drags down the global average. A 7% drop in jet fuel prices may have also helped keep airlines’ costs down, muting pressure on rates for now.” 

Ms Hales said Europe’s peak may be “less intense” than normal. 

“Demand is slightly improved lately, most likely as the holiday is coming to an end in the EU, but overall demand is not strong. There are new services to EU tradelanes from north-west China, but capacity is not significant. 

“There is always a peak of some kind towards the back end of the year, and the 2025/26 peak is expected to start in late September, peaking in November–December for holiday shipments. Demand may remain elevated into January 2026 due to lunar new year front-loading.  

“However, the peak may be less intense than in previous years due to proactive planning (and diversifying routings) and potential ecommerce slowdowns in Europe,” she added. 

But the biggest market characterisation is lack of visibility. 

“There is a lot of uncertainty,” said the European forwarder. “And that’s the problem; nobody can really plan, nobody really has a clue on where to position themselves with sales, from a capacity point of view. But I don’t think we should worry too much.” 

Mr Manders said a trade or tariff deal with China, expected to be finalised by 10 November, just 17 days before Thanksgiving, could help stabilise business. 

But there is likely going to be some modal shift from shippers as they try to contain costs – or get goods to stores fast. 

“More than ever, shippers are falling into three categories right now,” said Mr van de Wouw.  

“There are those who will always say ‘no way’ to airfreight because their products simply cannot justify the higher cost. 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 sits a bigger group of shippers that 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. 

“Air cargo’s higher demand remains the result of mode shift we saw in July, with a bit of support from e-commerce. It is not an indicator of increased economic activity. It’s just that airfreight is getting a bigger share,” he explained. 

“Many shippers looking to lessen the impact of tariffs just do not know how the market will look in 3-4 weeks’ time, because of the lack of clarity. Consequently, I think more businesses are deciding to take a hit and move their products by air.

“But this good news for the air cargo market remains under constant review. Overall, it’s hard to see where strong, sustainable airfreight growth will come from,” he said.