News / A dull airfreight market after front-loading push – carriers desperate for volumes

It’s a dull airfreight market right now, that much everyone can agree on. The front-loading is over. 

But it is raising questions over where airlines will put capacity – as well as the full-year margins for forwarders and carriers.  

From the highs and lows of the double-digit changes in capacity earlier this year, worldwide rates appear relatively flat. 

Globally, a blend of spot and contract rates rose 1% in week 23, to $2.44 per kg, while spot rates edged up 2% in the week, to $2.63 per kg, according to WorldACD. 

“The market is dull, currently,” said Danielle Hales, Crane Worldwide’s regional pricing and procurement manager in the UK. “At present, we are seeing sufficient capacity in the market and conditions are stable. 

“We’re not feeling a drastic pinch, largely due to summer schedules and additional passenger flights boosting belly cargo availability. 

“Carriers are actively expanding their offerings and it has been encouraging to receive almost daily emails from a variety of carriers announcing additional and/or new lanes added to their summer schedules.” 

That’s the diplomatic way to put it. Others say carriers are desperately searching for volumes and regions where they might maintain margins. 

“Airplanes need to fly,” said one senior airfreight forwarder. “They are looking for gaps in the market – one airline reached out to ask us where they should put capacity, and how much we could take. Airlines are no wiser than we are on this.” 

The source added that the market was certainly “a bit calmer right now”. 

“The front-loading chaos has come to an end. But the question is how much was front-loading? Are warehouses full? When will it start again?” 

Ms Hales agreed: “The initial Trump tariff announcements sparked a sense of urgency, driving a surge of ‘super-shipping’ to move goods into the US before potential tariffs. 

“However, with the delay in implementing these tariffs, customers appear well-prepared, either through overstocking or by adopting creative routing strategies to bypass China-origin restrictions, such as using alternative hubs, indirectly impacting UK/EU-bound routes, but not congesting them.” 

Tonnages from mainland China to Europe fell 5% in week 23, although Hong Kong to Europe rose 2%. Global volumes to Europe fell 16% week on week, said WorldACD. 

And the China/HK to US market is still volatile, with tonnages falling sharply in the first week of June and spot rates down, it added. Volumes fell 10% in week 23 over week 22, 19% lower than a year ago, while spot rates were down 5% week on week, or 17% year on year. Capacity fell 5% week on week, according to Rotate’s capacity database – although it was 5% higher than the average previous four-week period. 

“This latest slump in the CN/HK to US market in week 23 suggests that last month’s rebound was a temporary rather than structural recovery, linked to delayed volumes ‘catching up’ following the suspension of the punishingly high tariffs that had been imposed in April,” explained WorldACD. 

The senior forwarder said: “There have been significant drops to the US in recent weeks, likely due to reciprocal tariffs. And ecommerce has turned things upside down. De minimis rules will still continue to have an impact on capacity.” 

Ms Hales added: “Discussions with carriers in Munich revealed a shift in strategy and carriers are recognising the limitations of reallocating capacity heavily to China/Asia and are now gradually reintroducing key LATAM lanes, or forging stronger interline agreements and partnerships to optimise capacity. 

“This recalibration, I am sure, will be welcomed by the market.” 

Maybe so. But there is little indication of a significant upside coming for forwarders or carriers – although, in this volatile geopolitical environment even a tweet can trigger market swings. 

The source added that, as it stood, however, there were no obvious boosts on the horizon. 

“We all benefit from ‘events’ in air. The next [scheduled] one is winter scheduling, particularly on the transatlantic, when capacity changes. But we’ll take a little hit if rates stay low.” 

The source also noted he was watching the ocean freight market closely for clues. 

“The peak season surcharges have come in a month early – so what does that mean? A longer peak period – or a relatively brief rush now? Once we see what’s happening on the ocean we might see what may happen in air. We’ve still got Black Friday, Cyber Monday, and so on. 

“But a peak this year? I doubt it. I just can’t see where it is going to come from, especially as a lot of volumes have already moved. 

“Our margins won’t increase if air stays stable.”