The 2025 Air Freight Market Playbook: Supply Chain Shifts & Strategic Planning
The imbalance between demand and air cargo capacity is expected to continue across all regions in 2025, especially on key trade routes like the Transpacific Eastbound (TPEB) and Far East Westbound (FEWB).
With demand for air freight outstripping available supply, markets such as China, the Indian subcontinent, the Middle East, and Vietnam will be particularly affected. This demand surge is anticipated to keep pricing pressure high despite stable conditions in the Atlantic market.
The Epicenters of Supply Chain Chaos – Where to Watch
Analysts highlight the importance of monitoring regions such as China, India, and the Middle East, where demand is poised to drive significant shifts in air cargo. While the US economy shows more substantial growth than the EU, this disparity could lead to imbalanced demand across the Atlantic market, influencing global air freight dynamics.
The Domino Effect of Capacity Shortfalls
The air cargo industry is set to face mounting capacity constraints, further exacerbated by several factors. The retirement of older freighters, delays in new aircraft deliveries, and the airline industry's focus on passenger flights—which offer limited belly cargo space—will all contribute to the tightening of capacity.
Additionally, freight operators are shifting their focus from the US market to Asia, adding more strain to the already limited supply of available cargo space.
Expect Higher Prices – Says The 2025 Forecast
With capacity growth nearly flat in 2025, air freight prices are expected to stay elevated. Operators will continue to grapple with the impact of these capacity imbalances, leading to sustained pricing pressure in the market.
As the industry adapts to these challenges, stakeholders must navigate fluctuating demand and constrained capacity.
How is Online Shopping Fueling Air Cargo Growth?
Since 2018, e-commerce has more than doubled, driving a surge in demand for air freight. The global B2B e-commerce market is expected to reach $36 trillion by 2026, with 80% concentrated in Asia-Pacific. Emerging markets like Latin America and the Middle East also contribute to this growth.
According to Boeing, the e-commerce sector now requires the equivalent of 100 Boeing 777 freighters daily for shipments from China to the US, highlighting the increasing reliance on air cargo, especially on transpacific routes.
As e-commerce grows, air freight strategies are evolving. Companies are shifting from heavy reliance on air freight (up to 90%) to more balanced models, with 60% of shipments using direct fulfillment and 40% driven by forward stock.
Despite continued growth, air freight volumes may stabilize at 25-30% of total e-commerce shipments, reflecting a trend toward more diverse and sustainable logistics solutions.
How Will Seasonal Fluctuations Impact Global Air Freight Rates?
In 2025, air freight rates from key global hubs such as China are projected to experience seasonal peaks, particularly during the lead-up to major holidays. However, as demand stabilizes, these rates are anticipated to decline.
Post-COVID, airlines have adjusted their pricing strategies, implementing more aggressive pricing models to meet the growing demand for air cargo services. This trend has led to consistent year-over-year Block Space Agreement (BSA) rate increases.
This upward trajectory is expected to continue in 2025, with average rate increases of 10–15%. These adjustments reflect the pressures of higher operational costs and the need to maintain profitability as air freight remains in high demand.
China-US Trade Dynamics & Impact on Exports
The ongoing economic and political tensions between China and the United States will likely affect air freight trends in 2025. Exports from China to the US are expected to slow down due to reduced purchase orders, influenced by the current trade climate.
This decline in exports may result in lower air freight volumes from China to the US, further impacting the air cargo sector's overall performance.
Prepare for Air Freight Challenges & Opportunities
Planning for the 2025 air freight market requires a proactive approach, including diversifying supply chain operations to mitigate risks from geopolitical tensions, labor disputes, and capacity shortfalls.
Businesses must embrace flexible logistics models, leveraging emerging technology to enhance efficiency. Monitoring market dynamics, such as seasonal pricing and e-commerce growth, is essential to optimize costs and maintain competitiveness in the dynamic global air freight market.