In December 2024, global air cargo volumes rose by 11% compared to the same month the previous year, while average rates increased by 15%. This marked the fourteenth consecutive month of traffic growth, ushering in the new year with a wave of optimism. Xeneta predicts air freight demand will grow by an additional 4-6% in 2025. Yet, the company urges caution: Niall van de Wouw, Xeneta’s Chief Airfreight Officer, stated that despite positive signs, the sector remains vulnerable to geopolitical tensions, stagnant manufacturing industries, and political interventions within an increasingly unstable global landscape.
Xeneta highlights that in December 2024, air cargo capacity increased by just 2%, a rate that lagged behind robust demand, pushing Xeneta’s dynamic load factor to 62%, up three percentage points from the previous year. This indicator combines volume and weight of cargo transported with available capacity, providing a realistic measure of utilisation. Simultaneously, the global spot rate rose to $2.99 per kilogram, representing a 15% annual increase. However, this growth rate was the lowest in seven months, reflecting a market rebalance following the extreme fluctuations of 2023.
A key driver for the industry remains the growing reliance on e-commerce, with volumes projected to rise by 14% annually through 2026. Van de Wouw emphasised that while the general cargo market remains weak, e-commerce helps fill the gap. However, political interventions, such as potential restrictions on Chinese e-commerce platforms, could have significant global repercussions.
In December 2024, major trade lanes showed mixed trends: the Europe–North America route saw a 21% increase in spot rates, reaching $3.27 per kilogram, while the Northeast Asia–North America lane grew by 5% to $5.57 per kilogram. Conversely, the China–United States route experienced a 9% decline compared to the peaks of December 2023, reflecting a combination of strategic rebalancing and tighter controls on e-commerce activities.
During the same period, shippers demonstrated a growing preference for long-term air freight contracts, which accounted for 63% of all agreements in Q4, up 16 percentage points from the previous year. However, spot contracts still represented nearly half of the volumes negotiated, a strategy that may have eroded carriers' revenues due to rising rates.
Looking ahead to 2025, Xeneta forecasts that global air freight demand growth may outpace supply, with expected increases of 4-6% and 3-4%, respectively. However, numerous risk factors, including geopolitical tensions, potential new US tariffs, and extreme weather events, could impact the market. While recent negotiations between the International Longshoremen’s Association and the United States Maritime Alliance have averted further strikes at East Coast ports, any disruptions to global maritime transport could push shippers to rely on air freight for urgent shipments, driving rates higher.
Van de Wouw concluded by stating that rising uncertainty will necessitate more flexible rate negotiation methods, such as indexation or transparent pricing, to foster better collaboration between stakeholders: "Without clear visibility, the future of air cargo in 2025 risks remaining a mystery for many less-informed operators."
