News / Air freight rates predicted to stay at altitude next year – for some trades

13/11/2024

Air freight rates will go up over the next few months, and potentially stay inflated for the whole of 2025, according to president of United Cargo Jan Krems.

But not all trade lanes will enjoy the same spike, he added.

“I think rates will go up, and I’m very confident about Q1 25,” Mr Krems told The Loadstar on the sidelines of TIACA’s Air Cargo Forum in Miami this week.

He explained it was due to “high airfreight demand”, ocean shipping disruption and a shortage of capacity.

“It’s been record after record on tonnage for us. October was the best tonnage in the history of United. The Red Sea really helped us. Panama helped us a bit. I think the Red Sea crisis is not really over,” he said.

“But also, there’s just a lot of business… and there’s maybe a shortage of some capacity,” Mr Krems added.

Indeed, CEO of data company Rotate Ryan Keyrouse told The Loadstar at the event that “if demand is growing faster than supply, rates are going to go up”.

And he added: “I’m not in the business of forecasting rates… but if you look at supply and demand, you have this impression that rates are going to be high next year.”

According to Rotate data, capacity is expected to grow at just 4.4% next year, far outpaced by the demand forecast – which some delegates have estimated at some 20%.

And when asked how far into 2025 rates would remain elevated, Mr Krems speculated it would “maybe be the whole year”.

He added: “My forecast this year was that the yield would go further down, but it did not. So at least for the first three months I’m positive, and then see what happens with Trump.”

But Mr Keyrouse noted that although average global rates were likely to increase in the coming months, not all tradelanes would see the same benefit.

“While [rates] globally went up, in North America going back to China, they tanked,” he said. “Globally, you see supply and demand constraints. There will be tradelanes where it will be even more constrained than before, like China to North America or China to Europe.

“But then the backhaul will be negatively impacted and see rates go down, because there will just be excess capacity.”