Airlines are raising fares and reducing capacity as jet fuel prices more than double year-over-year, increasing operating costs for air freight. Carriers are prioritizing yield over load factor, which tightens available cargo capacity and pushes freight rates higher. Reduced flight schedules and fewer passengers also limit belly-hold cargo space, further constraining supply.
Air freight rates rose sharply year-over-year in August, driven by widespread shipping route disruptions including the U.S.-Iran conflict, Houthi attacks on Red Sea lanes, and port congestion from low water levels. Shipping companies are rerouting vessels away from traditional lanes, creating a severe vessel shortage that is pushing customers to compete for limited capacity at significantly higher rates, with air cargo also commanding premiums as an alternative mode.
Air freight procurement economics through the first half of 2026 reflected a sector transitioning from the record-setting volumes of 2025 toward a more measured growth environment characterised by divergent regional dynamics and persistent cost-side pressures. IATA's monthly cargo performance data revealed that global cargo tonne-kilometres expanded between roughly 4% and 11% year-on-year across individual months of the first half, with February's approximately 11.2% surge representing the strongest monthly reading before growth moderated toward mid-year. However, IATA's June revision of its full-year 2026 cargo growth forecast to a mere 0.2% signalled the organisation's expectation that escalating trade frictions and tariff uncertainties would substantially curtail volume expansion in the second half.
Ongoing disruptions to Red Sea maritime routes continued to reroute time-sensitive ocean freight consignments into air channels, sustaining rate premiums on Asia-to-Europe corridors where transit-time sensitivity rendered modal substitution impractical. E-commerce volumes provided structural support for belly-hold and dedicated freighter demand, particularly on transpacific lanes where cross-border parcel shipments maintained robust growth. Jet-fuel costs, tracking broader crude-oil market movements, remained a significant component of all-in air freight procurement charges throughout the period.
Analyst Insight
According to Procurement Resource, air freight costs are expected to remain elevated in the coming months as geopolitical rerouting and fuel costs constrain effective capacity, although slower global cargo-volume growth may gradually moderate upward pressure.
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In 2025, the air freight market showed a mixed price trend with periods of volatility across major trade routes. At the beginning of the year, freight rates moved unevenly as global trade tensions and tariff concerns created uncertainty in shipping activity. Demand from Asia, especially on routes to the United States and Europe, fluctuated after the Lunar New Year, leading to short-term declines in some lanes while others saw slight gains. Trade policy changes and cautious export activity also affected shipment volumes, keeping the market unstable in the early months.
As the year progressed, demand remained moderate, with some recovery in cargo movement from key hubs in Asia and North America. Weather disruptions and holiday-related slowdowns briefly influenced rates, but overall capacity remained sufficient to handle shipments. In the United States, reduced imports from China due to higher tariffs and cautious inventory planning lowered cargo bookings, which limited strong growth in freight rates. Meanwhile, European routes showed small improvements, while Asian lanes continued to experience mixed performance depending on demand and capacity.
Toward the end of 2025, global air freight rates increased slightly during the peak season, supported by stronger activity on major routes from China and North Asia. However, rates still remained below the previous year’s peak, showing that the market was recovering slowly and remained sensitive to trade conditions and global demand.
Air Freight refers to the shipment of freight or cargo via airfreight carriers or cargo airlines, that are primarily dedicated to the transportation of cargo by air. These cargo airlines may be charter or commercial and some of these are in fact the divisions or subsidiaries of larger passenger airlines. Some examples of these cargo airlines are – FedEx Express, Emirates SkyCargo, etc. The Air Freight is the fastest mode of transporting the goods and is the best available option for shipping perishable items in short time over large distances.
| Report Features | Details |
| Product Name | Air Freight |
| Region/Countries Covered | Asia Pacific: China, India, Indonesia, Pakistan, Bangladesh, Japan, Philippines, Vietnam, Iran, Thailand, South Korea, Iraq, Saudi Arabia, Malaysia, Nepal, Taiwan, Sri Lanka, UAE, Israel, Hongkong, Singapore, Oman, Kuwait, Qatar, Australia, and New Zealand Europe: Germany, France, United Kingdom, Italy, Spain, Russia, Turkey, Netherlands, Poland, Sweden, Belgium, Austria, Ireland Switzerland, Norway, Denmark, Romania, Finland, Czech Republic, Portugal and Greece North America: United States and Canada Latin America: Brazil, Mexico, Argentina, Columbia, Chile, Ecuador, and Peru Africa: South Africa, Nigeria, Egypt, Algeria, Morocco |
| Currency | US$ (Data can also be provided in local currency) |
| Supplier Database Availability | Yes |
| Customization Scope | The report can be customized as per the requirements of the customer |
| Post-Sale Analyst Support | 360-degree analyst support after report delivery |
Note: Our supplier search experts can assist your procurement teams in compiling and validating a list of suppliers indicating they have products, services, and capabilities that meet your company's needs.
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