31 Mar
Ongoing trade disputes, particularly the Trump administration’s tariff increases, are causing uncertainty in the air cargo sector. According to Xeneta’s March 6 report, freight forwarders are delaying Block Space Agreement negotiations, while shippers prefer short-term contracts instead of long-term commitments. Airlines are reassessing freighter capacities for the summer, potentially shifting routes from China to other Southeast Asian markets or the Transatlantic corridor. Previously, Xeneta predicted a 4-6% growth in global air cargo demand for 2025, but rising trade uncertainties have put this forecast in doubt.
The latest tariff hikes include an additional 10% increase on Chinese goods in March, following a similar rise in February. Trump’s proposed universal reciprocal tariffs, set for April 2, further contribute to market instability. These changes are pushing businesses to rethink supply chain strategies. Xeneta’s Chief Airfreight Officer, Niall van de Wouw, noted that some shippers are seeking ways to reduce tariff impacts, while others anticipate lower airfreight rates if e-commerce volumes continue declining.
E-commerce has been a key driver of air cargo, but recent shifts are causing concern. The suspension of the U.S. de minimis exemption for Chinese shipments, combined with seasonal slowdowns, is affecting demand. February’s spot rates from Shanghai to the U.S. fell 29% month-over-month, while rates to Europe dropped only 2%. Shanghai, once a costly alternative, might now face reduced demand as volumes shift back to Hong Kong and southern China. Additionally, the Trump administration’s proposed port call fees on Chinese-built ships could lead to short-term increases in ocean freight rates, pushing some cargo from sea to air.
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source: Supply Chain Dive
