Although the trend of air freight slows down in the fourth quarter, 2025 is "not as bad as people worried"!

Industry analysis shows that the global air cargo market data in September indicates that there are signs of a slowdown in growth as we enter the last quarter of this year.

The slowdown in freight volume growth also continues to squeeze earnings. In September, the air cargo spot freight rate fell for the fifth consecutive month year-on-year, dropping 4% to $2.54 per kilogram.

Van der Voort said at a webinar held after the release of the report: "In September, in US dollar terms, the air freight rate decreased by 4% year-on-year. But if the impact of local currency depreciation is taken into account, the actual decline is close to 10%, which is a very significant drop." Glyn Hughes, the Director General of TIACA, also spoke at the webinar. He pointed out that the demand remained unexpectedly good. "Although we saw a significant upfront investment in May, the same situation did not occur in July and August. After 24 months of continuous expansion, what we are seeing now is compared to the very strong data last year," he said. He also added: "The spot price seems to be reaching a balance, reflecting the stability of demand and capacity." However, Van der Voort held a different opinion. He said: "I don't think many supply chain managers would describe the current situation as stable. Globally, the situation has indeed stabilized, but at the specific trade route level, the situation is completely different. Demand and freight rates fluctuate. Although the downward pressure may be weaker than before, we should not take it for granted that the global situation will be uniformly reflected in every market."

Most of the downward pressure comes from the sluggish activities on the transatlantic and transpacific routes. The repeated extensions of the US tariff deadline seem to have advanced the freight volume to the summer. The US government's decision to cancel the minimum threshold for low-value cross-border goods led to a fourth consecutive monthly decline in China's e-commerce exports to the US in August. The latest data from China Customs shows that the sales of low-value goods and e-commerce goods decreased by 38% year-on-year. Due to the fact that Chinese e-commerce giants have shifted their focus to European consumers, the e-commerce transaction volume has grown rapidly, driving a 4% increase in the trade volume on the Asia-Europe corridor in the first three weeks of September compared to the previous month. China Customs reported that so far this year, the sales of cross-border e-commerce and low-value goods to Europe have increased by 58% year-on-year, with a 55% increase in August.

Van der Voort said that since the US made the minimum ruling, the speed at which large Chinese e-commerce companies have turned to Europe to promote growth is astonishing. He said that he doubts that consumers will easily switch. "Huge marketing expenditures have changed the direction of demand. Companies like Temu have shifted billions of dollars in advertising expenditures from the US to Europe." Hughes pointed out that this shift is driven by social media marketing rather than traditional advertising. The budget and capacity change almost simultaneously. He also pointed out that the air cargo industry has responded more quickly to these demand changes by reallocating capacity. "In the past few years, we have heard a lot about 'China + 1' from the production perspective, aiming to diversify supply chain risks. Now, we are hearing more about 'US + 1' from the consumption perspective."

He pointed out that the high demand on routes such as Asia to Europe strongly indicates what we can expect in the next two to three years: "The air cargo trade routes will be more diversified."

The freight peak before the Golden Week and the change in transportation mode caused by the suspension of the China-Europe Railway at the Polish border also drove the growth of demand. Regarding the 100% drug tariff newly implemented by the US government, which will take effect on October 1, due to the previous agreements reached with the EU and Japan, its impact may be more limited. The UK has also reached a trade agreement with the US, but the drug tariff rate has not yet been determined. In addition, the US's focus on brand or patented products has protected most of India's drug exports, which are low-cost generic drugs. For Zhang Wenwen, the Chief Air Freight Development and Analysis Officer of Xeneta, there is one route that is really worthy of attention: the India-North America route. Compared with the same period last year, we still see the significant impact of the Red Sea situation, which has led many shippers to switch their goods to air freight.

Even a year later, the Red Sea crisis continues. Moreover, due to the US's 50% tariff on Indian exports, the demand on this corridor is decreasing. Van der Voort explained: "Take a step back and think, put the numbers aside for a moment. Imagine that you are an operator serving the Indian market in the US. A year ago, due to the Red Sea crisis, both the freight rate and the freight volume soared. A year later, the new regulations and import tariffs have led to a slump in the market." "It must be extremely difficult to survive in such an environment, either feast or famine, especially for operators with high fixed costs. You have no control at all. There are gains and losses, and this brings a great deal of instability to this region when serving the US market," he added. Even so, the overall growth rate of the Asia-Europe route in September is still far lower than the 9% growth rate in the same period last year compared with August. Super Typhoon "Yagi" has made things worse. This storm disrupted the East Asian hubs in the last week of September, resulting in a only 3% increase in the freight volume in that month compared with August. At the corridor level, the US tariff has a profound impact on the seasonal air freight volume. In the transpacific and transatlantic markets, the average air freight spot rate in September has declined by 2 - 3% compared with a month ago.

Although the supply chain has shifted to the Southeast Asian market for production to mitigate the impact of tariffs, the spot freight rate from Southeast Asia to the US in September still did not rise. It decreased by 2% month-on-month and 22% year-on-year. Due to the decrease in e-commerce transaction volume caused by the US's implementation of the global minimum ban, a huge gap has been left in the transpacific market, which is characterized by carriers quickly transferring freight capacity out of the region. Due to the fact that the extension of the US tariff deadline has led to early loading, disrupting the traditional seasonal freight volume, the freight volume in the air cargo market from Europe to the US has also declined, reflecting the overall slowdown in growth. On a more positive note, the air cargo spot rates on the westbound and eastbound segments in September are still higher than those in the same period last year. In late October, when the airlines' winter flights begin, the capacity on the transatlantic route will be reduced by about 20%.

After the summer, the passenger belly capacity will be cut, which is expected to reverse the downward trend of freight prices. But Van der Voort said that this is "the result of supply rather than demand". The Asia-Europe route has improved slightly. Driven by the approaching shipping peak season, the spot freight rates from Northeast Asia and Southeast Asia to Europe in September increased by 4% month-on-month. However, compared with the same period last year, these two prices have decreased by 5% and 21% respectively. The large fluctuations in freight rates have filled the contract negotiations between shippers and freight forwarders with a "cautious atmosphere". In the third quarter, the proportion of six-month contracts increased by nearly 10 percentage points year-on-year to 22%. The expiration time of these contracts coincides with the end of the peak season and is about to enter the next annual cycle. In contrast, the proportion of contracts with a term of more than one year has decreased, reflecting people's doubts about the long-term prospects. "Shippers have very limited bandwidth. They hope to obtain stability at a reasonable and competitive price and hope to hold on for a longer time in contract negotiations, because for them, making plans on a quarterly basis is a very painful process," Van der Voort added.