Global logistics operations have faced unprecedented challenges in recent years, driving rapid innovation to meet shifting market demands. Nowhere is this transformation more evident than in the air cargo sector—once considered a traditional branch of logistics, but today a highly dynamic, technologically advanced industry.
Following a strong post-COVID recovery, the outlook for airfreight remains mixed. In January 2025, the International Air Transport Association (IATA) forecast 3.2% growth for the sector, driven primarily by booming e-commerce. Nearly half of Asia’s air cargo shipments this year were expected to be e-commerce-related, fueled by large online marketplaces adopting direct-to-consumer fulfillment models from China. This shift has displaced traditional freight such as apparel, electronics, and automotive parts, while supporting upward pressure on yields.
However, the forecast has since darkened. By June—just six months later—IATA revised its projection to a 1% contraction, citing escalating trade disputes and tariff adjustments. The impact has been most visible across North America. For instance, while Mexico recorded a 7% increase in international air cargo volumes in 2024, shipments dropped by 6.8% in the first four months of 2025.
The U.S. decision to eliminate the de minimis exemption for China and Hong Kong in May triggered an immediate downturn: within weeks, trans-Pacific e-commerce bookings from China to the U.S. fell by 50%, while overall China–U.S. volumes have plummeted by as much as 60% since reciprocal tariffs were introduced in April.
Air cargo carriers are rapidly reassessing their route networks in response to declining demand on China–U.S. trade lanes. This reconfiguration may release capacity into other global corridors, reshaping trade dynamics worldwide.
At the same time, new compliance requirements are adding complexity. Goods that once benefited from de minimis exemptions now require:
In addition, all de minimis–eligible imports regulated by the FDA now require agency review before entry, further increasing processing times and compliance costs. These measures signal a wider trend of intensifying regulatory oversight in global trade.
Geopolitical instability continues to exacerbate volatility in global cargo flows. Conflicts in Ukraine and the Middle East are forcing airlines to reconsider capacity allocations, while also driving up fuel costs—a critical component of carrier operating expenses.
For example, the Israel–Iran conflict reignited volatility in oil markets. By late August 2025, jet fuel prices averaged USD 3.07 per gallon, representing a 50% increase from USD 2.05 just three months earlier. Such fluctuations place further strain on airline profitability and network planning.
In the face of these challenges, carriers are investing heavily in digital transformation—with Artificial Intelligence (AI), automation, and predictive analytics at the forefront. These tools are redefining efficiency, resilience, and competitiveness in the air cargo market.
Despite tariff headwinds, regulatory tightening, and geopolitical instability, these advancements underscore the resilience and adaptability of the air cargo sector. By embracing AI, automation, and digital transformation, the industry is not only mitigating volatility but also charting a roadmap for other logistics sectors.
Ultimately, this new wave of innovation positions air cargo as a cornerstone of safer, more efficient, and more sustainable global supply chains—demonstrating how growth is possible even in the face of disruption.
Source: https://aircargoweek.com/why-the-air-cargo-market-is-experiencing-growth-amidst-volatility/
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