Global air cargo rates continued to fall in June as excess capacity, tariff uncertainty, and deteriorating consumer demand weighed heavily on the market. According to the latest market analysis from Xeneta, most major trade lanes recorded year-over-year rate reductions, marking a broad-based cooling in airfreight activity.
Spot Rate Performance: June Snapshot
Xeneta reported that global airfreight spot rates in June declined for the second consecutive month, falling 4% year-over-year (YoY) to an average of $2.50 per kilogram. This marks the first time in 19 months that available capacity outpaced demand—a shift that has eroded pricing power across many lanes.
Key trade lane performance included:
Southeast Asia to North America: Rates fell 11% YoY, averaging $4.79/kg.
Northeast Asia to North America: Rates increased 8% YoY to $4.72/kg, driven by lane-specific dynamics and capacity limitations.
“It’s wrong to assume that declining rates are automatically good news for shippers,” noted Niall van de Wouw, Chief Airfreight Officer at Xeneta. “Lower prices offer little comfort when demand is softening, and consumer confidence is weak.”
By the Numbers – June 2025
📦 +1%: Global air cargo volume growth (YoY)
💰 $2.50/kg: Average global spot rate (–4% YoY)
📉 56%: Global dynamic load factor (–2 percentage points YoY)
(Source: Xeneta)
Market Insight: Tariff Risks and Consumer Headwinds Cloud Outlook
Despite modest gains in demand during the first half of 2025—estimated at +3% YoY—Xeneta warns of a darker outlook for the second half. Key concerns include:
The expiration of the U.S. tariff suspension on August 1, with rates diverging from earlier proposals.
The revision of the U.S. de minimis threshold, removing duty-free treatment for many low-value imports.
“The air cargo market is losing altitude amidst so much uncertainty,” said van de Wouw. “With inflation already impacting household spending, the reintroduction of tariffs may further erode demand for air-transported goods.”
He added that the cumulative effect of policy uncertainty and macroeconomic stress is reshaping industry expectations—and may define the market environment for the foreseeable future.
Procurement Behavior Shifts: Peak Season Tendering Feels the Impact
Procurement strategies are also evolving as shippers adjust to rising volatility. Xeneta reported the following trends:
The share of three-to-six-month mid-term contracts rose by 8 percentage points YoY, largely at the expense of annual or long-term agreements.
However, compared to Q1, the share of three-month contracts fell by 12 percentage points, suggesting earlier tenders were made out of necessity—especially among shippers prioritizing service reliability over cost savings.
Freight Forwarder Sentiment: Favoring Flexibility Over Commitment
In June, 46% of volumes were procured on the spot market, as forwarders remained cautious. Xeneta interpreted this shift as a sign that market participants expect further price declines and are prioritizing tactical flexibility.
“Their wait-and-see approach favors agility over long-term commitments—for now,” the report concluded.
Conclusion: A Market in Transition
The combination of softening demand, excess capacity, and uncertain trade policy is placing the air cargo industry in a delicate position heading into the peak season. While spot pricing offers temporary relief, the structural challenges ahead may redefine contract strategies and margin expectations across the airfreight value chain.
As van de Wouw summarized:
“Much damage has already been done. This might be the new reality the market has to operate within during the second half of the year.”
Source: https://www.supplychaindive.com/news/air-cargo-prices-down-june-xeneta/753589/
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