Expert Column Global Air Cargo Market: 2025 Summer Performance and 2H Outlook

Global Air Cargo Market: 2025 Summer Performance and 2H Outlook

In 2025, the global air cargo market from May to August exhibited significant volatility due to a combination of factors, including changes in U.S. tariff policies, global economic slowdown, and ongoing geopolitical instability caused by unresolved wars. Notably, the shift in U.S. tariff policies had a substantial impact on the air cargo market. During this period, many global companies reacted sensitively to these changes, opting to abandon cost-cutting measures in favor of strategic shifts in cargo transportation methods. To reduce the uncertainty of tariff policies and shorten lead times, there was a noticeable increase in the transition from maritime to air transport. As a result, air cargo volumes, which had been stagnant between May and June, began to surge sharply in July.

However, fundamentally, air cargo is centered around high-freight-rate urgent cargo, perishable cargo, and high-value goods. Therefore, depending on changes in customs policies and trade policies, this phenomenon of mode of transportation switching may expand or contract in the short term.

However, as the demand for air cargo transportation (CTK, Cargo-Tonne-Kilometer) increases, the supply of air cargo transportation (ACTK, Available Cargo-Tonne-Kilometer) also rises, leading to a downward trend in air cargo freight rates (spot rate). This increase in ACTK is primarily driven by the expansion of cargo supply utilizing the lower deck space of passenger aircraft (Belly Cargo Capacity).

The expansion of passenger airline routes and the increase in the number of flights have led to an increase in belly cargo capacity as well.

In this column, we will examine the current status of the global air cargo market from May to August and the outlook for the second half of the year, based on the July performance report from the International Air Transport Association (IATA) and various related materials, as the official August performance data has not yet been released.

1. Monthly Trends in the Global Air Freight Market (From May To August)

1-1. Demand (CTK) and Supply (ACTK)

From May to August 2025, the global air cargo market has shown a trend where both air cargo demand (CTK) and supply (ACTK) remain relatively stable from May to June, but experience a surge starting in July. This phenomenon appears to be driven by a combination of factors, including the frontloading to avoid regulatory changes resulting from shifts in U.S. tariff policies, chronic port congestion in maritime shipping, and delays in maritime schedules, all of which contribute to heightened uncertainty.

Global air cargo transportation performance (CTK) from May to August is shown in [Table 1]. From May to June, it showed an increase of 0.8% to 2.2% compared to the previous year, but in July, it suddenly increased by 5.5%. This is believed to be due to the resolution of uncertainty in international customs policies, leading to an increase in cargo transportation volume in line with the new policies.

Regionally, the international cargo transport performance (CTK) by route shows that the Asia-North America route has been affected by changes in U.S. customs policies, resulting in a continuous decline in transport performance for three consecutive months from May to July. However, in July, the rate of demand decline slowed, indicating a recovery trend. The Asia-Europe (Europe-Asia) route recorded a 3.5% increase in July compared to the previous month, showing a growth rate of 13.5%. This appears to be part of a diversion strategy in response to U.S. customs policies, with some goods transiting through Europe or using Europe as a platform for market expansion and adopting export expansion strategies accordingly. Chinese online shopping mall products are being directly shipped to Europe, and demand for high-value-added items in Europe is increasing. Additionally, due to ongoing geopolitical uncertainties, there is a shift from sea to air transport, contributing to the gradual increase in air cargo demand between Asia and Europe.

Dubai, Doha, and other airports in the Middle East are increasingly serving as major hubs for air cargo on the Asia-Europe and Asia-Africa routes, with the rise in volume.

[Table 2] Changes in Global Cargo Demand by Region/Route (YoY, %) Source: International Air Transport Association (IATA) Air Cargo Market Analysis - July 2025

Air cargo capacity (ACTK) also increased by 3.9% compared to the same month last year in July. This increase in capacity is analyzed to be mainly influenced by the growth in belly cargo volume, utilizing the space below passenger aircraft, rather than dedicated freighters.

As shown in the graph [Table 2] in the IATA July report, the supply of all-cargo aircraft (blue portion, ACTK) remains relatively constant in terms of its share of total supply, while the belly cargo capacity of passenger aircraft (yellow portion) is gradually increasing its share of the total supply.

This passenger aircraft belly cargo capacity accounts for approximately 56% of the total cargo capacity (ACTK). The blue section represents the cargo-only aircraft (freighter) cargo loading capacity, equivalent to cargo space capacity, which accounts for about 44% of the total cargo capacity.

According to the report, belly cargo volume has reached its highest level since 2019, showing an increase of 7.3% year-on-year and 5.2% month-on-month. Additionally, this upward trend has been observed for five consecutive months.

For reference, the red color on the graph represents the Preighter (Passenger + Freighter), which temporarily converted passenger aircraft cabins into cargo spaces during the COVID-19 pandemic. This form ceased to exist after 2023.

The yellow section represents the belly cargo capacity of passenger aircraft (passenger planes), while the blue section indicates the cargo capacity of all-cargo aircraft (freighters).

[Table 3] Monthly Changes in Air Cargo Supply (From Jan 2019 To Jul 2025) Source: International Air Transport Association (IATA): Air Cargo Market Analysis – July 2025

1-2. Cargo Load Factor (CLF) and Spot Rate

Global demand for air cargo (CTK) has increased, and as the supply (ACTK) has also risen, the overall load factor (CLF) has remained stable without significant fluctuations. From May to July, the global average load factor (CLF) was approximately 45%, which is slightly lower than last year's performance. This appears to be influenced by the increased supply compared to demand, particularly the growth in belly cargo.

According to the TCI (The Cargo Index) and BAI (Baltic Air Freight Index), which announce indices reflecting the fluctuations of real-time spot rates for air cargo, the overall global average freight rates remain steady/weak compared to last year. This is partly due to the influence of the summer off-peak season, but it is largely attributed to the recovery of supply in the air cargo market and intensified competition.

[Table 4] Airfreight Spot Rates Source: Aircargo News: Data Hub, Airfreight Rates (Aug, 2025)

As a major route in the air cargo market, the freight rates for the Hong Kong-to-North America route have shown a general decline since 2025. This is attributed to the abolition of the duty-free exemption for small parcels in the United States (De minimis Duty, below $800) for cargo originating from China, which took effect on May 2nd, and the subsequent abolition of duty-free benefits for all countries worldwide starting August 29th. This led to a decrease in e-commerce-related cargo transportation. In response to the abolition of the small parcel duty-free policy, demand temporarily increased through measures such as early shipments. However, in May and June, there was a significant reduction in demand for goods transported through Chinese e-commerce, resulting in a decline in freight rates. Additionally, phenomena such as the relocation of export hubs and the termination of Block Space Agreements (BSAs) for cargo transportation were observed.

However, whether such policy changes will be a factor in immediate and large-scale freight rate fluctuations depends on a comprehensive consideration of route characteristics, types of goods, and customs clearance efficiency. (Supply Chain Dive, June 2025)

2. Outlook for the Global Aviation Market Since September 2025

Despite the rebound effect of early shipments and detour transportation for tariff policy avoidance shown in July, the Asia-Europe route is expected to remain strong due to demand for electronics, high-value products, and pharmaceuticals. However, the Asia-North America route is likely to face some delay in recovery due to the uncertainty of tariff policies in the near future.

Especially, from September to December, air cargo demand (CTK) and freight rates on European and North American routes are expected to rise due to the year-end season, Thanksgiving, the launch of new electronic product models, and the year-end shopping season.

In conclusion, when viewed comprehensively, the global air cargo market in the second half of 2025 is being restructured in the direction of changing cargo transportation modes (from ocean to air) due to changes in customs/trade policies, as well as detour transportation for risk avoidance, which requires “speed and flexibility.”

Companies around the world adopt strategies that consider not only transportation costs but also uncertainties in customs/tariff policies, lead times of goods, and risks associated with customs clearance when selecting cargo transportation modes. In this process, air freight transportation, despite its relatively high cost, is emerging as a "strategic alternative" with its ability to respond quickly and swiftly compared to ocean freight, which is a key advantage in situations where risk avoidance is desired. Of course, from a long-term perspective, air freight transportation cannot replace ocean transportation, but it is expected that demand for air will continue for the time being.

Investors and industry stakeholders must closely monitor changes in tariff policies and global supply chain risks in the short term, while also paying attention to the balance between air and sea transportation and the enhancement of speed as an alternative. In this way, the air cargo market in 2025 can be assessed as a dynamic structure where policy, economic, and supply factors interact, entering a long-term period of change where uncertainty and opportunities coexist.

The global air market performance and regional performance of the International Air Transport Association (IATA) July 2025 Air Cargo Market Analysis Report, officially announced most recently, are summarized in the table below.

[Table 5] Air Cargo Market Performance – July 2025 Source: Air Cargo Market Analysis, July 2025, IATA

- International Air Transport Association (IATA) Air Cargo Market Analysis (July 2025): July delivers a boost to Air Freight demand
- The STAT Trade Times (9 Sep. 2025) Air cargo demand rises 5% in August, but rates continue to fall
- Supply Chain Dive (4 June 2025): Supply Chain Dive
- DHL (August 2025) Air Freight Market Update
- Air Cargo News (4 Sep. 2025) Air cargo grows again in August but outlook remains uncertain

Prof.

Baik Namjin

(Current) Professor at Duksung Women's University
Main Research Areas:

• - Empirical Study on Establishment of
  Air Cargo Logistics System utilizing Drones
• - Impact Analysis of Transportation Service
  Factors on Satisfaction in Drone Delivery
• - A study of Location based Air Logistics Systems
  with Light-ID and RFID on Drone
  System for Air Cargo Warehouse Case
• Writing : Theory of Air Cargo
  Transportation Business
  (Air Transport
  Logistics Service Industry)

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