News / Transatlantic the outlier as air freight rates continue to reflect volatile markets

ID 328105391 © Sebastian With

Air cargo’s fluctuating spot rates see shippers being advised to make “flexible contracts”, while the impending end of de minimis exemptions in the US could see airlines turn their attention to more stable markets. 

Xeneta revealed this week that global air cargo volumes had risen 5% in July, year on year, contrary to the usual seasonal lull. 

“This unexpected boost, bucking seasonal patterns, appears driven in part by tariff-related front-loading, mode shift, and persistent uncertainty, prompting businesses to expedite shipments,” said Xeneta. 

James Hookham, director of the Global Shippers’ Forum (GSF), suggested another spike in air freight to the US was expected from ecommerce shipments “trying to beat the end of the de minimis exemption” on 29 August. 

With the biggest volume drop of de minimis imports into the US having already been seen, after the earlier end of the exemption for China and Hong Kong, Xeneta warned that the full removal would “primarily affect Canada, the UK, and Mexico – countries that together make up most of the remaining one-third of affected volumes”. 

According to Xeneta, the transatlantic market “stood out this week as the only major corridor to post considerable rate increases in both directions”.  

Spot prices from Europe to the US rose to $1.91 per kg – “a combination of front-loading activity and reduced bellyhold capacity from passenger flights nudged rates higher,” explained Xeneta.  

However, Brandon Fried, executive director of the Air Forwarders’ Assocation, told The Loadstar that after the full de minimis repeal, shippers would “have to deal with the additional costs and paperwork of formal customs clearance”; and many were starting to “rethink their strategies”. 

He added: “This could mean a continued shift from air freight for lower-value shipments… we’re seeing some of that air cargo volume shift to other modes like ocean, which then moves via rail and truck.”

Glyn Hughes, director general of the International Air Cargo Assocation (TIACA), told The Loadstar he anticipated “a continued softening of demand for ecommerce shipments to the US, with other markets such as Asia to Europe or Latin America benefiting from increased focus”. 

He added that “the complete lack of consistent clear information about what remains exempt, the method of charging and collection, and the differences between postal movements and general air cargo” would push many shippers to “find new markets, and create new trading relationships”. 

Indeed, Mr Fried advised that “when it comes to contracting, flexibility is the name of the game right now.” 

“We’re seeing a focus on strategic partnerships and a balance between contracted rates and the spot market. Companies are using data and real-time visibility to make more informed decisions, and they are diversifying their portfolio of forwarders to spread risk,” he said. 

“It’s not just about getting the lowest rate any more; it’s about building a resilient supply chain that can adapt to rapid change.” 

Meanwhile, despite “firmer fundamentals”, Xeneta data shows global air cargo spot rates declined in July, to $2.55 per kg, 2% lower than July 2024.  

“Globally, we’ve seen capacity growth outpacing demand in some areas, which has put some downward pressure on rates,” said Mr Fried, but he added that ,depending on tradelanes, “rates and capacity are a mixed bag”. 

“From Asia to Europe, demand has remained strong, and that’s kept rates up,” he said. 

According to Xeneta, spot rates from North-east Asia to Europe “held steady”, at $4.16 per kg, with “a notable shift of freighter capacity” from the Pacific to Europe helping absorb a near-90% surge in cross-border ecommerce volumes from China to Europe, according to June data from China Customs.  

“That reallocation has so far kept rates aloft,” said the data platform.  

Mr Fried noted that generally, “obtaining space is easier than it was during the height of the pandemic”, but added that “capacity is still being carefully managed by airlines”. 

“The market remains volatile, and that’s reflected in the fluctuating spot rates we’ve been seeing,” he concluded.