News / Better ocean carrier reliability sees air freight 'losing its appeal'

© Dmitriiavramchik |

There is one upside to today’s ending of all de minimis exemptions into the US for the airfreight market: most of the misery already hit when the exemption ended for China. But ecommerce does remain.  

“The airfreight market has generally been flat,” said a Shanghai-based forwarder. “It’s driven by ecommerce, followed by electronic goods – without those two, demand is not huge.

“The US market has not been strong – but also not weak. There has been a bit of up and down, but carriers are dealing with changing rates easily by adding or cutting capacity.” 

One carrier adding capacity in an uncertain environment is Etihad Cargo, which yesterday announced it had taken an Atlas Air 777F, initially to connect Hong Kong, Abu Dhabi and Madrid, on a long-term contract. 

The PR breezily noted: “The partnership comes at a time of growing demand for general air cargo, e-commerce, automotive, pharmaceuticals and perishable products across Asia, the Middle East and Europe.” 

Etihad already has five 777 freighters, but is awaiting delivery of an order for 10 A350Fs, which will begin to arrive in the second half of 2028. 

According to several market observers, those companies which can adapt to ever-changing market conditions will be the ones to thrive. 

Dimerco said today: “Rising US and global tariffs continue to create uncertainty in trade, leading many companies to front-load shipments, raise prices, and adjust supply chains.

“US import volumes are expected to drop by 5.6% in 2025, with containerised imports from September to December projected to fall 19–21% compared with last year. To cope, businesses are rethinking sourcing, closely watching policy changes, and building flexibility into their supply chains. With more tariff talks under way, shipping volumes and global trade patterns could see further shifts in the months ahead.” 

Tom Crabtree, analyst for Drewry, noted on the Freight Loop podcast that this year was “erratic”, but that the market was adjusting well. 

“The growth patterns in air freight traffic worldwide have been very erratic throughout 2025,” he said, comparing it with last year’s boost from ecommerce and the Red Sea shutdown. 

“But that effect is now starting to abate. So far this year, growth has been not-quite 3% for the first six months, over the same period of ‘24. And not surprisingly, in the biggest market, Far East to and from North America, I’ve seen some very erratic patterns, as one might imagine, with the trade pronouncements from the US government starting in January of this year.” 

In May, transpac traffic fell nearly 11% against a year earlier – but this difference halved in June. 

“What’s interesting is that a lot of other air freight lanes, like Far East and from Europe, have picked up that slack. Intra-Far East has accelerated.  

“So, it appears shippers and trade experts are adjusting to the uncertainty. I think Chinese exporters are, basically, refocusing a lot of their trade towards those partners that are a little more reliable than the United States, particularly in Europe and intra-Far East trading partners. Beneficiaries that we’ve noticed to date, countries like Vietnam, have witnessed a very big air export boom, as well as a containership boom, I might add, in 2025. India has picked up the slack to a lesser degree, so we’re seeing quite a bit of adjustment there.” 

Dimerco pointed to the Manufacturing PMI, which showed that India had reached a year-high, of 59.1, easily the highest-growth country in the region. Elsewhere in Asia, however, that confidence has waned. 

“Global manufacturing PMI slipped into contraction, falling from 50.3 in June to 49.7 in July as the boost from earlier tariff-driven front-loading faded,” noted Dimerco.  

Source: : S&P Global PMI/ Dimerco

“New orders and export demand weakened, weighing on production across several major economies. This signals softening global trade momentum, with manufacturers facing both slower demand and heightened geopolitical uncertainty.” 

Mr Crabtree expects to see more modal shift to sea freight, owing to weaker demand and cheaper ocean rates. 

“Every month of this year the market has contracted, and after my conversations with aircraft operators and freight forwarders, I think basically shippers are adjusting to longer supply chain flows and moving a good part of their flows back to container shipping, simply because it’s more affordable. 

“There was a big boom in rates per 40ft box back in May, those numbers have since come back to much lower numbers. We haven’t seen that in air freight, which I find very curious.” 

He pointed to the relative pricing differential as a boost for ocean over air – and added that with better reliability in sea, as shown by the Gemini alliance, air was losing its appeal. 

“Air freight rates are down, but in aggregate, not that much on a world average. Now, specific markets, like ex -China to and from the United States, or ex-China to the United States, those rates have come down. And substantially, I might add, over the course of 2025.  

“Shippers are, basically, trying to reorient their traffic to tradelanes which are a little more reliable. So more exports to Europe, more exports from the Middle East. 

“Watch for opportunities in slower markets that are not directly connected to the United States. That’s where you’ll probably find more ample capacity.” 

One thing to watch out for, added Dimerco, would be next week’s military parade in Beijing, celebrating the 80th anniversary of the end of World War II. 

“As a result, several major cargo airports in China will impose temporary operational restrictions – Beijing (PEK), Beijing Daxing (PKX), Ezhou (EHU), Zhengzhou (CGO), Shanghai Pudong (PVG), Chengdu (CTU), and Chongqing (CKG). Specifically, export cargo which requires 24-hour cool storage may not be accepted between 20 August and 5 September, subject to each airport’s official notice and handling instructions.” 

Meanwhile, TAC Index published an update on rates on Wednesday, noting: “Global air freight rates eased a little lower again last week … The overall Baltic Air Freight Index … dipped 1.7% in the week to 25 August, leaving it lower by 8.2% over 12 months.

“Despite reports of continuing high demand in certain sectors, ranging from garments and pharma to electronics and semiconductors, as well as capacity constraints causing delays in certain markets, overall rates were still flat-to-down as the traditionally quieter summer ‘low season’ continued.”