15 August 2025, Friday
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Global air cargo volumes rose five per cent year on year in July as shippers turned to faster transport modes to avoid US tariffs, reports Singapore's Payload Asia.
The unexpected rise in airfreight demand defied seasonal trends, following a modest one per cent gain in June. Xeneta attributed the surge to tariff-related frontloading and mode shifts, as businesses sought to expedite shipments amid ongoing trade uncertainty.
Cargo capacity increased by 3 per cent year-on-year, but the stronger rise in volumes lifted the dynamic load factor back to 58 per cent, reversing a two-point decline from June. Xeneta defines dynamic load factor as the utilisation of available cargo space based on volume and weight.
Xeneta's Chief Airfreight Officer Niall van de Wouw, said the growth was not driven by increased trade but by companies creatively circumventing higher costs. "If you're trying to avoid tariffs, speed is essential-and a plane is faster than a ship," he said.
Despite stronger fundamentals, global air cargo spot rates fell for a third consecutive month in July, down two per cent year-on-year to US$2.55 per kg. A slight two per cent month-on-month increase offered some relief, though mid-term prospects remain subdued.
The gap between seasonal and spot rates widened from five cents in May to over 20 cents by July's end, reflecting weak mid-term confidence. Seasonal rates are valid for over one month, while spot rates apply for up to one month.
Further disruption is expected as the US prepares to end the de minimis exemption for all countries by late August. The exemption was removed for China and Hong Kong in May, leading to a 50 per cent drop in low-value exports to the US in June, according to China Customs.
Canada, the UK and Mexico are likely to be most affected by the broader rollback. Potential reciprocal action by foreign postal authorities could complicate US postal services, which are governed by international treaties.
Van de Wouw said the lack of clarity around tariffs is causing "a tremendous lot of headaches", but also driving air freight volumes higher. "Circumventing is about responding quicker and being willing to pay a bit more for air freight to avoid higher tariffs," he said.
