Air cargo still flying high as capacity stays tight, but rates are slipping
It may be January, but faith in the air cargo sector continues to be high, with both capacity and rates well above 2024 levels.
Rotate’s capacity database shows air cargo capacity 5% higher last week than a year ago; capacity from Asia Pacific to Europe is up 14%, while on the reverse leg capacity is up 19%; Asia to North America is up 11%, and up 8% in the other direction.
But key cuts in capacity have been made to transatlantic routes, down 3% to 4%, as well as in intra-North America, down 7%, and Latin America to North America, down 2%.
Rotate notes that belly capacity is finally back to pre-Covid levels. It said three of the top 10 airlines which have added capacity were Air China, China Eastern and China Southern, “showing the strong recovery of Chinese carriers back to pre-pandemic levels”. Others in the growth top 10 include Qatar, Cathay and Turkish.
Emirates SkyCargo said this week that it too is growing: it has wet-leased two more 747Fs, giving it 15% more maindeck capacity than this time last year and bringing its total of wet-leased 747Fs to six. Last year it added two 777Fs, which are now on ecommerce duty out of Asia. It said it had also added a freighter route to Copenhagen. This year and next it expects to receive 13 more 777Fs.
“We anticipate that demand will continue to boom,” said Badr Abbas, divisional SVP.
Rates, too, remain heartily above 2024 levels, with spot rates 22% higher than a year ago, according to WorldACD today – although they fell 3% week on week. It added: “Relatively high rates from Asia Pacific and Middle East & South Asia (MESA) origins continued to prop up average prices in the second week of 2025.”
A mix of spot and contract rates fell 4% week on week, but were up 12% over 2024. Spot rates from Asia Pacific to the US fell 5% this week, but remain 27% higher than a year ago. The data company said spot rates had been “surprisingly firm” on the route in the last two weeks of the year. While tonnages fell in week one, they regained 14% in week two, but rates are falling.
Asia-Europe volumes were “extremely buoyant throughout much of 2024, including most of the fourth quarter, [but] dropped sharply from mid-December”. Week one saw chargeable weight down 40% from week 49. It rebounded 26% in week two – mirroring rates, which fell from about $5 per kg in mid-December to $4.30 – but in week two they rose to $4.59.
“Rates from MESA origins, which were highly elevated throughout 2024 due to the disruptions to ocean freight supply chains in that region, have fallen somewhat in the past three months, and have continued to slide in 2025.”
WorldACD added: “Bangladesh to Europe spot rates, which rose above $5 per kg in September, have fallen consistently, week by week, for the past 10 weeks, from $4.92 per kg in week 45, to $3.25 in week two this year.”
Expeditors, in a Q&A published this week, said airfreight was differing significantly on individual lanes, pointing in particular to Vietnam.
“For instance, as more companies look to broaden and diversify their supply chain, demand for air capacity from Vietnam continues to increase at a faster rate than passenger demand for flights to and from that country. Because so much air cargo now moves in the belly of passenger aircraft, capacity has not kept pace with demand for space coming out of Vietnam.
“While the supply and demand imbalance in other lanes may not be as unbalanced, in general we do not see an end to tight air capacity any time soon.”
