News / Air freight review: carriers eye higher contract rates after extended peak

© Alibek Aibazov

Airlines are taking advantage of the elongated December peak to raise contract rates for 2025. 

Carriers are thought to have increased rates by about 10%, both for long-haul and intra-Asian routes, according to Dimerco.

A forwarding source in Shanghai backed this assessment, noting a $1.4/kg increase in blocked space agreements on Asia to Europe. However, while the forwarder said that level “would be a record over the past many years”, Dimerco claimed rates were lower than in 2023. 

The lengthy peak has been a result of an uptick in non-ecommerce volumes this month, due to better planning by shippers. 

“Starting mid-December, we’ve seen a significant uptick in cargo volumes, particularly for consumer electronics,” noted Dimerco in its 2025 outlook. 

“This is unusual, as the market typically slows down after 5 December. However, this year, the peak is expected to extend all the way to late January, just ahead of Chinese New Year. What’s interesting is how general cargo has avoided the usual October-November ecommerce rush to better optimise capacity and costs – this could indicate a new trend going in to 2025.” 

Wenwen Zhang, airfreight analyst for Xeneta, noted in its 2025 outlook: “The AI wave will lift the recently stagnant B2B airfreight market. But this will not have as dramatic an impact on global demand when compared to factors in 2024 such as [the] Red Sea Crisis and the rise of ecommerce. 

“Shippers on corridors with lower demand growth are still at risk if airlines remove capacity from secondary trades to meet the increasing demand out of Asia.” 

But there is also some front-loading, as shippers try to beat any tariffs that the US (or elsewhere) could impose. “This has created a surge in demand, pushing capacity to critical levels,” said Kathy Liu VP, global sales and marketing for Dimerco Express Group. 

Dimerco pointed to Taiwan as a particularly busy market, driven by trade with China. 

“China-Taiwan trade will be a key growth area in 2025, driven by frequent cargo flights, proximity, and Taiwan’s mature production lines for semiconductors and consumer electronics. More parts will be shipped from China to Taiwan for assembly, then sent to the US to avoid potential tariffs. 

“AI chips and server shipments make up the majority of Taiwan’s import/export demand.” 

Dimerco added that space is currently tight on Taiwan to US lanes, with rate rising and no capacity until 25 December. It said Korean Air was fully booked from Tianjin to Chicago until the end of December, while Japan Airlines cancelled a flight from Tianjin, resulting in unusually high space demand. 

Several other Asian freighter operators have cancelled flights, which is expected to tighten capacity. 

From North China to Europe and the US, rates remain high, but are expected to soften after New Year’s day. China Cargo Airlines has reportedly cancelled all freighter flights for the third week of December, citing lack of crew, although The Loadstar could not confirm that. It is thought the carrier has cancelled all flights from Shenzhen to Los Angeles and Stansted from this week until the end of the year, while All Nippon Airways is also reportedly cancelling freight flights from Guangzhou to Narita at the end of December and the first week of January. 

“Cargo demand has sharply increased on Asia and Europe lanes, but flight cancellations have caused tight capacity and rising rates. In the US market, rates are expected to stay stable in January before Chinese New Year, with charters helping to manage demand and maintain tight capacity,” explained Dimerco. 

The US market is expected to be challenging in the new year, with a potential strike likely to drive shippers to airfreight. Qatar Airways, said Dimerco, had “no plans to return freighters to LAX, causing rate increases from other carriers due to limited main deck capacity”. 

And Asia-Mexico is also likely to be busy, with airlines adding new routes to the US neighbour, although it is yet to be discovered what the impact of trade tariffs might be on the market. 

As ever, geopolitics will have a crucial impact on freight in 2025, as will the introduction of the Gemini network in shipping, the ILA’s proposed US port strikes, tariffs and even, perhaps, an outbreak of peace. 

Niall van de Wouw, chief airfreight officer for Xeneta, said: “If there is a major change in the geopolitical situation and a large-scale reopening of the Red Sea, there could be a renewed acceleration of mode shift and air cargo demand growth for a few months. This is due to the likely severe congestion and deterioration in schedule reliability if large numbers of ships stop transiting around the Cape of Good Hope and begin arriving at destination ports at the same time. 

“The threat of further strikes at ports on the US east Coast and Gulf coast in January could also cause congestion and deteriorating schedule reliability. During the first round of strikes on October 1-3, the ocean to air mode shift contributed to a 12% month-on-month jump in Europe to US air cargo volumes.” 

He continued: “The Red Sea effect on the air freight market has plateaued, and might even recede in 2025. This could provide a bit of breathing space for shippers, but the threat of further disruption remains, given the geopolitical climate.”