News / AI cargo props up air cargo market amid warnings of an early peak

Photo: © MM Umair, Dreamstime.com

Booming AI-related shipments are offsetting weaker ecommerce demand in air cargo, with analysts warning geopolitical risks could still trigger an early peak season, despite signs of rates easing on some Asia-Europe lanes. 

Flexport senior pricing associate Franco Babini said global air freight rates in June were 33% higher year on year, while volumes increased 9%, driven by AI infrastructure and semiconductor demand alongside constrained capacity from Middle Eastern carriers, which remain at around 70% of pre-conflict operating levels.  

He noted that elevated jet fuel prices also continued to support the market. 

However, Mr Babini said the Asia-Europe market had softened since late June. Hong Kong export tonnage fell 12% in the first week of July, marking three consecutive weeks of decline after the EU’s removal of de minimis for low-value imports on 1 July. 

Flexport said it expected China and Hong Kong volumes to remain stable through July and August, while South-east Asia and Taiwan should continue to see strong demand, driven by AI hardware and technology products.

It warned, however, that renewed Middle East disruption or further ocean-to-air modal shift could bring forward the traditional peak season to September. 

“The triggers for this scenario could be further escalations in the Middle East that, as we well know, could affect the available capacity as well as the jet fuel prices,” he explained. “Moreover, the AI-related commodities could take up the newly available space in the market, further putting pressure on the rates, and the severe disruption that we’re seeing on the ocean side could lead to more ocean-to-air conversion, further putting pressure on the market.

“This scenario has a far less optimistic outlook compared to scenario A, and in this case, we could see rates already begin an upward trend in early September, rather than the traditional suburban peak season towards early Q4.”

Also, Xeneta has dramatically revised its 2026 outlook. Having forecast long-term air freight rates would fall 5%-10% this year, it now expects them to rise 5%-15%, citing the supply shock caused by the escalation of conflict in the Middle East. 

The market intelligence provider estimates the conflict removed 12% of global air cargo capacity overnight in late February, restricting first-half supply growth to just 1%, while demand increased 4%. The resulting imbalance pushed combined spot and contract rates up 17% year on year overall in the first half, with spot rates climbing around 40% in May before stabilising. 

Indeed, following Cargolux’s announcement earlier this week, Cathay Pacific announced today it would also postpone resumption of passenger and freighter services to the Middle East. And Cargolux also said it had decided to postpone its plan to resume freighter flights to Dubai World Central, and place this on hold “indefinitely”.  

Xeneta chief airfreight officer Niall van de Wouw said: “Demand keeps defying gravity. Spot rates are now plateauing, but they are not falling.”  

He said he expected demand growth to moderate in the second half as capacity gradually recovered, although geopolitical uncertainty remained a significant ‘wild card’. 

Freightos’ head of research, Judah Levine, also highlighted the market’s resilience in a webinar yesterday, citing IATA data showing global air cargo demand continuing to outpace capacity growth, keeping load factors elevated despite the gradual recovery from Middle East disruption. 

But both Xeneta and Freightos identified AI-related cargo as the market’s key growth driver. 

Xeneta noted global semiconductor sales surged 106% year on year in April, with AI shipments now making the transpacific the strongest air cargo corridor, with China’s low-value ecommerce exports dropping 7% in May. 

“I cannot see the e-commerce growth engine being revived… AI-driven freight is booming, particularly on the transpacific,” said Mr van de Wouw.