International air cargo is going through a complex transitional phase, in which the seeming steadiness of rates conceals underlying tensions. This is clearly illustrated by Xeneta’s report released on 4 July 2025, which covers data from June and marks a turning point: for the first time in nineteen months, total available capacity offered by airlines has surpassed actual cargo demand. This development, despite the presence of factors that would typically support prices – such as high fuel costs and a weakened US dollar – led to a 4% year-on-year drop in spot rates.
More specifically, global demand rose by 1%, while available capacity increased by 2%. This disconnect immediately translated into a two-percentage-point drop in the dynamic load factor – which considers both volume and weight – bringing it down to 56%. According to Xeneta, airlines were unable to offset downward price pressure, even with rising operating costs linked to fuel or the weakening of the dollar. The market, in short, responded solely to the dynamics of supply and demand, showing little sensitivity to external factors that would normally influence pricing.
Another vulnerability stems from final demand, particularly that linked to consumer goods. Households, hit by months of persistent inflation and a general rise in living costs, are adopting more cautious spending habits. As Niall van de Wouw, chief airfreight officer at Xeneta, aptly put it, “consumers are voting with their wallets”. This cautiousness translates into a reduction in non-essential purchases, which in turn reduces pressure on the global logistics chain.
Adding to this already uncertain context is the political dimension: the suspension of tariffs imposed by the United States, in place since 2022, is nearing its expiry. For most countries, the exemption ends on 9 July, while for China it is scheduled to expire on 13 August. The potential reintroduction of duties could trigger a volatile dynamic, starting with a short-lived surge in orders – already partially visible in flows from Northeast Asia to North America – followed by a sharp decline in volumes.
Regional differences underscore how fragmented the market has become. The weakest corridors remain those from Southeast Asia to Europe and the United States, with freight rates down 18% and 11% year-on-year, respectively. The Northeast Asia–Europe route shows surprising stability, driven by resilient e-commerce traffic, while the Northeast Asia–North America lane records a modest 8% increase, which Xeneta attributes to growing concerns over renewed trade barriers. In contrast, flows in the opposite direction – from Europe and the US back to Asia – continue to experience falling prices, dropping below sustainable levels and reflecting a chronic trade imbalance between the continents. The transatlantic route appears relatively more stable, with rates up about 5% in both directions, suggesting a more balanced dynamic than in other intercontinental trades.
On the contractual strategy front, operators are increasingly favouring mid-range arrangements. Contracts lasting between three and six months saw a marked rise in the second quarter of the year, increasing from 42% to 50% compared to the same period in 2024. However, compared to the first quarter, there has been a decline in three-month contracts, dropping from 38% to 25%, indicating that many early-year agreements were driven more by urgent circumstances than structural choices. Caution continues to dominate the market: annual commitments are shrinking, while reliance on the spot market remains high but not yet predominant.
Looking ahead to the second half of 2025, Xeneta foresees a far from straightforward scenario. The possible return of US tariffs, combined with tighter thresholds for e-commerce customs exemptions and persistently weak consumer confidence, could further dampen international shipments. Adding to this is the risk of carriers cutting back capacity in response to squeezed margins, forcing the sector to negotiate a new balance – one that is more fluid and less predictable.
Air cargo thus enters the second half of the year in a paradoxical state: falling prices, rising operating costs and stagnant demand. In this environment, broad generalisations no longer suffice. Each trade lane requires tailored analysis, and every contract must be calibrated around risk and flexibility. Agility and adaptability are now the key capabilities needed to navigate a market increasingly fragmented and shaped by forces beyond pure logistics.
