Executive Summary
The global air cargo market entered 2025 with mixed trends. Spot rates remained high compared to last year, despite the usual seasonal dip after the Christmas peak. The Transatlantic trade lane saw significant rate increases, while pricing in the Asia Pacific and Middle East/South Asia (MESA) stayed elevated due to ongoing capacity constraints, geopolitical risks, and shifting market conditions.
On the Transatlantic route, rates from Western Europe to the US jumped to $3.61 per kilogram in mid-December, doubling since the start of the peak season in September and reaching their highest level in over two years. This sharp increase was driven by reduced capacity due to winter schedules, airlines shifting planes to busier ex-Asia routes and trade imbalances. Dynamic load factors reached 80%, indicating high capacity utilization and greater pricing power for freight carriers. However, rates are expected to decline in the coming weeks as the market follows seasonal patterns, though sustained constraints will likely keep them elevated compared to prior years.
In the Asia Pacific, spot rates dipped slightly in early January but remain far above year-ago levels. For example, rates to the US fell to $5.39 per kilogram, 37% higher than in the same period last year. Similarly, rates to Europe dropped briefly in December before recovering to $4.59 per kilogram in January, 42% above 2024 levels. This corridor continues to experience sustained demand driven by booming e-commerce volumes, even as manufacturing activity in key regions such as Europe remains subdued. Additionally, strategic allocation of cargo capacity by airlines and freight forwarders has contributed to supply shortages in this region, further supporting elevated spot rates.
In the MESA region, rates to Europe rose 65% year-on-year, even after easing 20% from their November peak. Geopolitical disruptions, such as the ongoing instability in the Red Sea, continue to impact trade lanes and add to cost pressures. The region’s pricing dynamics are further affected by heightened security risks and a resurgence in global tensions, which have also disrupted cargo flows on major corridors.
The SAF mandate is expected to raise operational costs for carriers, likely trickling down to higher rates for shippers. While seasonal rate declines may provide temporary relief, strong demand, particularly for e-commerce, and constrained capacity across key trade lanes are likely to keep rates high in the near term. Additionally, recent geopolitical tensions and regulatory scrutiny on Chinese e-commerce platforms have introduced new risks, potentially impacting air cargo volumes globally. Shippers are advised to remain flexible, explore alternative routes, and closely monitor market trends to manage costs effectively.
Key Trends
- Transatlantic air cargo rates surged significantly during the peak season, with spot rates from Western Europe to the US doubling to $3.61 per kilogram since September.
- Asia Pacific remains a strong driver of demand, with spot rates to the US and Europe significantly above year-ago levels despite recent seasonal declines.
- The Middle East/South Asia (MESA) region continues to face elevated rates due to disruptions in the Red Sea and geopolitical instability.
- The industry has become more resilient, with stakeholders focusing on longer-term contracts, strategic capacity allocation, and collaboration, mitigating some of the volatility seen in prior years.
Main Reasons for Bottlenecks
- Reduced passenger belly capacity from winter flight schedules and holiday-related capacity dips, particularly on the Transatlantic route.
- Airlines have shifted capacity to ex-Asia corridors to accommodate booming e-commerce demand, leaving other routes under-served.
- Trade imbalances, such as declining backhaul rates from the US to Western Europe, reducing operational efficiency.
- The Chinese New Year, starting on January 29, might cause slower processing times even after the official holiday period, ending 5 February.
Impact on Freight Rates
- Transatlantic spot rates doubled during peak season, reaching the highest levels in over two years, due to constrained capacity and increased demand.
- Asia Pacific spot rates to the US and Europe remain significantly higher year-on-year, despite a 5% recent decline in early January.
- Sustainable aviation fuel (SAF) mandates could add further upward pressure on air freight rates in 2025.
Outlook
- Transatlantic rates are expected to decline slightly in the coming weeks, following seasonal patterns, but capacity constraints will likely keep rates elevated.
- Asia Pacific and MESA routes are likely to maintain higher pricing due to persistent demand, geopolitical risks, and constrained capacity.
- The air cargo market remains increasingly dependent on e-commerce growth, which is projected at 14% annually through 2026.
- Shippers are increasingly adopting flexible strategies, such as index-linked contracts and transparent pricing models, to manage rate volatility and ensure capacity.
Customer advice
Considering the ever-changing market conditions and forces, please:
- Think ahead and book well in advance. Try to plan for 6 months ++.
- Consider that the market can change significantly. Further disruptions can happen anytime.
- Identify contract options that enable flexibility and resilience for your business.
However, it is our job at Bertling to keep global supply moving and do all we can and apply our knowledge, network and expertise to protect our clients’ while taking the latest market developments into account. We are there to find the best solutions to ensure cargo flows.
