Airfreight rates continue to decline despite the renewed conflict in the Middle East. The market is being influenced by weakening demand on certain routes, rising fuel prices, and changes in carrier networks.

Rate and Capacity Trends

According to the Freightos Air Index, the average global rate has dropped to around $2.82 per kilogram, down from the May peak of $3.35 per kilogram, though this figure remains above levels seen at the start of the year. Airlines are continuing to expand their route networks, increase flight frequencies, and invest in cargo aircraft. For example, DHL Express has increased its order for converted Mammoth Freighters 777-200LRF aircraft from nine to thirteen, Qatar Airways Cargo has launched seasonal flights to London and expanded capacity on routes to Dallas, Brussels, Tokyo, Dhaka, and Entebbe. Saudia Cargo has opened a new route to Melbourne and signed an agreement with Riyadh Cargo, while Royal Air Maroc has added four new European destinations and increased cargo hold capacity at its Casablanca hub.

Data from Rotate shows that overall cargo capacity remained stable for the week ending July 30, but there has been a shift toward more profitable routes. Significant growth has been recorded on the Leipzig–Dubai, Hong Kong–Dubai, and Muscat–Dubai routes, as well as on transpacific routes such as Shanghai–Los Angeles and Los Angeles–Incheon. Meanwhile, after the introduction of duties on parcels to the EU, some European and traditional e-commerce corridors have weakened.

Changes in Demand and Market Structure

The latest WorldACD analysis shows a 24% year-on-year drop in volumes on the Hong Kong–Europe route and a 10% decrease on China–Europe. At the same time, volumes between China and the US have grown by 19% compared to last year, and spot rates for Asia–US remain 36% higher than last year’s levels.

Cargo capacity from the Asia-Pacific region and the Middle East to Europe fell by 14% this month compared to June, equivalent to 18 fewer daily widebody freighter flights. Airports with a high share of e-commerce, such as Budapest, Madrid, and Luxembourg, experienced the largest reductions.

Operators are not retiring aircraft but are reallocating them to more profitable markets. There are signs that rising fuel prices may start to impact pricing. For the first time in several months, Cathay Cargo has increased fuel surcharges on exports from Hong Kong for the first half of August following another rise in aviation fuel prices. Some container shipping lines have taken similar measures.

Outlook and Challenges

The airfreight market is showing resilience: rates have fallen from the May highs but have not collapsed, and capacity has decreased by just 1% from June to July. In Europe, there is a noted decline in inbound e-commerce demand. Carriers are facing a more complex market environment amid falling spot rates.

The growth of the technology sector in Vietnam is driving an increase in logistics operator capacity in the country. Challenge Group is expanding its presence in India and China with new cargo flights. Shippers are increasingly postponing tender decisions and extending existing contracts, avoiding long-term commitments.

Airfreight rates remain high despite the gradual recovery of capacity. Microchip manufacturers are booked through 2028, investments in data centers are rising, and the volume of cargo related to artificial intelligence is increasing.

Overall, airfreight markets are stabilizing, capacity has largely returned to the Persian Gulf, and operators are having to carefully balance their global resources amid a series of market disruptions.