Air Cargo Demand Seeing Robust Demand Which Could Exacerbate Rates and Service in 2025
The air cargo industry expects its strongest ever peak season as booming e-commerce combines with online shopping’s volume and challenges around capacity and reliability for ocean freight.
To compound the situation, the global air cargo market has seen eight straight months of double-digit growth as of August, with a 14 percent increase in demand and only seven percent capacity growth over that period. As we look at 2025, if e-commerce growth continues aggressively and if demand outstrips supply, we are going to be in an unprecedented state that the industry has not seen for at least two decades.
While the demand has enabled freighter operators to benefit from rising rate levels, the robust market growth is being constrained by a lack of capacity. Recent data reported by rate benchmarking platform Xeneta show load factors on Asia-North America flights are at 87 percent, with both Asia-Europe and Asia-Middle East flights at 86 percent, which is effectively full for headhaul routes. Aircraft are also flying at their peak utilisation, with Rotate data for August showing global freighter fleets operating at up to 15 hours a day, just below pandemic flying times.
