Air Cargo
2025 Annual Review & Outlook
Global air cargo volumes grew 12 % in the first 10 months of 2024 against a 5 % increase in capacity . Shutterstock . com
Perpetual pressure
Ex-Asia air freight capacity constraints to persist in 2025
By Greg Knowler
The big picture : Capacity constraints on outbound air cargo routes from Asia , particularly China , will persist in 2025 , with volumes continuing to outstrip available space . Airlines have been postponing the retirement of freighters to cope with booming e-commerce demand in the US and Europe , but many of those aircraft are at the end of working life , and production delays at both Boeing and Airbus are slowing the arrival of any new capacity .
A look back : Air cargo on the two main trade lanes from Asia to North America and Europe was stuck in a perpetual peak season throughout 2024 . Following the traditional air freight peak season in the fourth quarter of 2023 , hostilities in the Red Sea — and the resulting diversion of container ships around southern Africa — forced shippers of time-sensitive cargo into the air . As planes leaving Asia began to quickly fill up , competition for space emerged from an unexpected source : e-commerce platforms contracting directly with airlines . Even as online shopping demand accelerated during the COVID-19 pandemic , the major e-commerce platforms typically had fulfillment centers in destination markets . Chinese e-commerce giants Temu and Shein changed all that , cutting out forwarders and contracting space directly with airlines to move packages into the US and Europe . US package imports by the end of September reached more than 1 billion units compared with 140 million units in 2023 , according to a White House briefing , as the platforms made use of its generous “ de minimis ” value threshold ; shipments valued at less than $ 800 in the US and € 150 in the EU are exempt from import duties . The e-commerce platforms in the past year have factored this into their US and EU supply chains , which almost exclusively use air cargo . Although available capacity increased almost 5 % during the first 10 months of the year , demand grew more than 12 %, according to rate benchmarking and analytics platform Xeneta , pushing global load factors and rates to their highest levels in two years .
A look ahead : Capacity will continue to be the greatest challenge facing shippers moving goods from Asia by air in 2025 . As e-commerce siphons off huge amounts of space directly from airlines , forwarders are under increasing pressure to secure capacity for their customers shipping traditional cargo . That pressure is often translated into forwarders chartering freighter capacity at a high cost , adding further upward pressure on rates , especially during historical peaks around Lunar New Year and November online sales promotions . Exacerbating ongoing space constraints for shippers are increasing shortages of intra-Asia capacity as airlines shift planes to the more lucrative long-haul routes . Heavy competition for limited space will likely keep rates elevated throughout 2025 . Scrutiny of Chinese online platforms by US authorities is also likely to intensify next year , with plans in place to reform the US de minimis program that will almost certainly be accelerated by the new Trump administration .
Capacity will continue to be the greatest challenge facing air cargo shippers .
The next inflection : Even if the US significantly lowers the de minimis value threshold , however , it is unlikely to have any real impact on air cargo demand out of China . The average value of US e-commerce transactions is about $ 170 , according to Hong Kong-based economists CEIC . More important is a US proposal put forward in September 2024 by the Biden administration that , if adopted , could result in 40 % of e-commerce products no longer covered by de minimis regulations , including 70 % of textile and apparel exports from China . That would have a significant negative impact on sales via e-commerce platforms that rely on direct shipments to US consumers from China .
email : greg . knowler @ spglobal . com
104 Journal of Commerce | January 6 , 2025 www . joc . com