News / Air cargo industry 'firing on all cylinders', with ecommerce in the driving seat

© Jaromír Chalabala

Ecommerce could now be accounting for two-thirds of the airfreight coming out of China, while freighter operators are taking advantage of the demand to ramp-up contract rates for next year.

“We are now at the peak of the year for air freight,” explained one Shanghai-based forwarder.

“The rates this week to both Europe and the US are more than the highest recorded last year; it’s not a surprise though, as the major drive is ecommerce, where volumes could be up to two-thirds of overall cargo.”

Global full-market rates rose 2%, week on week, to 1 December, hitting $2.84 per kg, the highest this year, according to WorldACD. Spot rates were up 3%, driven by a 4% rise from Asia Pacific, and a 3% rise from North America. Tonnages, once the US Thanksgiving has been accounted for, were stable.

WorldACD added that there had been some significant week-on-week rises from specific Asian markets: China ($5.10 per kg, +7% WoW), Hong Kong ($6.25, +9%), Japan ($4.97, +6%), South Korea ($5.49, +6%), Taiwan ($4.07, +5%) and Vietnam ($4.88, +3%).

“All of those are substantially above their levels in the equivalent week last year, including Y-o-Y increases of more than 30% from Japan and Vietnam, and a Y-o-Y increase of 46% from Taiwan,” added the data company.

The Chinese forwarder said capacity was busy and airports congested, but he expected demand to ease off, temporarily.

“We assume rates might fall for a short while later, most likely during Christmas, but it will pick up again because Chinese New Year is on 28 January, so obviously lots of cargo will need to be moved by then.”

But he added that freighter operators were using an expected capacity crunch next month – when their could be new tariffs, a US east and Gulf coast port strike, as well as mass shipping line schedule changes – to boost contract rates.

“The proposed annual block space agreement (BSA) rates to Europe from a few major freighter operators have significantly increased. It’s more than $1.40/kg on top of what it was in 2024.

“As far as I can remember, this would be a record over the past many, many years.”

CargoFacts Consulting noted: “The anticipated implementation of US tariffs on Chinese imports in early 2025 is prompting a pre-tariff rush, leading to heightened demand in Q1 as businesses seek to stockpile goods.

“This rush is expected to place additional pressure on logistics networks, tightening air cargo capacity and pushing rates higher. Concurrently, the longer-term trend of relocating manufacturing to South-east Asia is reshaping trade routes and demand patterns, further influencing capacity allocation and pricing strategies,” it noted, writing in the Baltic Exchange newsletter.

Chief airfreight officer at Xeneta Niall van de Wouw said yesterday, however, that the market had learned its lesson.

“We are witnessing a much more grown-up air cargo market, based on better allocation of resources and better terms and conditions between all parties involved. The peak in 2023, in comparison, saw a shortage of capacity and rates going crazy, all at the expense of shippers.”

He added: “This is an air cargo industry that is currently firing on all cylinders, but which is not out of control. In 2024, the industry has shown its maturity. We must wait and see if this holds when the market goes down, but I don’t see that happening just yet.”