Global air cargo rates extend decline as demand softens, geopolitical risks linger

The worldwide average air cargo rate declined 1% week-on-week to US$3.13 per kg for the seven days ending July 5, following a 2% fall in the previous week. Average spot rates also slipped 2% to US$3.62 per kg, with declines recorded across all major regions, including Europe, North America, Asia Pacific, and Central and South America.   Despite the weekly decline, the market remained significantly stronger than a year ago. Global spot rates were 37% higher year-on-year, supported by elevated pricing from the Middle East and South Asia, North America, Africa, and Asia Pacific. The Middle East and South Asia, along with North America, recorded the strongest annual increase at 46%, followed by Africa (42%) and Asia Pacific (37%).     Global air cargo volumes also softened during the week, falling 2% after a 1% decline in the previous week. WorldACD attributed the slowdown largely to reduced trading activity around the US Independence Day holiday on July 4. North America recorded the steepest weekly fall in cargo volumes, declining 10%, while Central and South America registered a 7% drop.      On a year-on-year basis, however, global chargeable weight remained 4% higher, driven by an 8% increase in shipments originating from Asia Pacific, highlighting continued resilience in the region’s export markets.

Trade flows between Hong Kong and Europe experienced a notable decline following the European Union’s implementation of new customs regulations on July 1, which removed the de minimis duty exemption for imports valued below EUR150. Cargo volumes on the Hong Kong-Europe route dropped 12% week-on-week, following declines over the previous two weeks, returning to levels last seen at the end of March. Meanwhile, shipments from China to Europe remained relatively stable after a 6% decline the previous week. Overall cargo volumes from Asia Pacific to Europe eased 2%, while spot rates on the lane softened to US$5.09 per kg.

Looking ahead, WorldACD warned that renewed hostilities involving the United States and Iran could increase volatility in global air cargo markets. Although freight rates have recently eased, escalating geopolitical tensions in the Middle East could trigger fresh disruptions to capacity, transit routes, and pricing in the weeks ahead.