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2025 Air Cargo Market Set for Expansion

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2025 Air Cargo Market Set for Expansion

by Mich M.
01/21/2025
in Logistics & Transportation

The air cargo market concluded the previous year with a 14th consecutive month of double-digit demand growth. In December, air cargo volumes increased by 11% compared to the same period in the previous year, with global spot rates standing at $2.99 per kilogram, up 15% year-over-year. However, December saw the slowest growth in pricing over the past seven months.

Rates on the China-to-U.S. corridor did not reach the peak season highs of 2023 in December, likely due to increased scrutiny on the route and the strategic allocation of cargo capacity. By early January 2025, these rates had decreased by 9% from their mid-December 2024 peak of $5.61 per kilogram. Factors such as e-commerce scrutiny, capacity allocation strategies, and potential frontloading ahead of possible tariffs contributed to the dip in rates. Additionally, contract trends in 2024 indicated that shippers were increasingly opting for longer-term air freight contracts, while freight forwarders negotiated a significant portion of their volumes in the spot market, which impacted revenues due to higher air carrier rates.

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Concerns about potential strikes at East and Gulf Coast ports in December did not lead to a notable shift from ocean to air freight. A new tentative six-year agreement between the International Longshoremen’s Association and the United States Maritime Alliance, reached on January 8, alleviated fears of a significant surge in air cargo activity. The three-day strike in October had caused a 12% increase in air cargo volumes from Europe to the U.S. compared to the previous month.

While the possibility of further disruptions in ocean freight may drive some shippers to rely more on air cargo for greater predictability, the future of the air cargo market in 2025 remains uncertain. Many industry players are waiting to see how the year develops, given the higher base compared to the start of the previous year.

Stay current with supply chain news on The Supply Chain Report. Free trade resources are available at ADAMftd.com.

#AirCargoGrowth #LogisticsTrends2025 #SupplyChainTransportation #CargoRates #GlobalTradeInsights

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