According to a newly released report from Xeneta – a leading transportation market analytics firm – the average global air freight rate in May 2025 dropped to USD 2.44/kg, marking a 4% year-on-year decline. While rates are falling, air cargo volumes have risen by 6% compared to last year, indicating a temporary supply-demand imbalance in the market.
Market Sentiment and Policy Uncertainty
Mr. Niall van de Wouw, Xeneta’s Chief Airfreight Officer, noted that the market is under pressure due to defensive behavior from both airlines and customers, as global trade prospects remain unclear.
“As trade activities stabilize and demand for air freight decreases, we could see further downward adjustments in freight rates,” he said.
Van de Wouw emphasized that the impact of tariffs often outweighs transportation costs – a key reason why many companies opt for air freight as a way to avoid import duties.
Given the ongoing market uncertainty, airlines are expected to adopt a more flexible approach in rate negotiations to maintain stable cargo volumes.
Restructuring Supply Sources Due to Tax Policy Shifts
One significant market disruptor is the termination of the U.S. “de minimis” duty exemption as of May 2, which has sharply reduced the volume of low-value imports from China and Hong Kong. This has led to localized overcapacity in air cargo, forcing some airlines to adjust their schedules and restructure their logistics networks.
Xeneta also observed a shift in supply chains, as some manufacturers begin relocating operations away from China to countries with more favorable tariff conditions for exports to the U.S. Although major flight routes remain largely unchanged, the origin points of goods are gradually shifting to adapt to the new tax environment.
Short-Term Outlook: Volume Spike Due to “Frontloading”
Experts forecast a short-term spike in air cargo volumes as companies accelerate shipments ahead of the end of tax exemptions – specifically July 9 for most countries and August 13 for China.
According to Xeneta’s analysis, trends in the container shipping market may serve as early indicators for air freight movements, given the longer lead times in ocean transport. Van de Wouw concluded:
“Even if a trade agreement is reached, we don’t anticipate a surge in air freight demand; in fact, it could decline if tariff issues are fully resolved.”
Source: vnexpress.net