The global air freight market is set for another busy year in 2025. As logistics professionals negotiate an increasingly complicated economic and political environment, understanding factors influencing air cargo is vital.
Demand for air cargo now sits at roughly $23bn (£18bn) a month, according to IATA data. That exceeds pre-pandemic levels.
But that growth trajectory is anything but straightforward. Many factors are influencing the market, which can result in significant changes to demand in the short term. Conversely there are many potential factors which could drive demand downwards.
Ahead of 2025, this article will highlight the key factors which are likely to influence the market, and provide advice for mitigating them.
Factor 1: Red Sea diversion expected to continue
The ongoing 3000 nautical mile Red Sea diversion for sea freight is continuing for force some shippers onto the air freight market. Key sea-air hubs on export routes from Asia, such as Jebel Ali port in Dubai, are operating at capacity.
Shippers who cannot tolerate the increased transit times are using the air freight market, which historically is more reliable, and with a much shorter lead time. This is creating a scenario of increased demand for air freight, which continues to impact the sector.
Factor 2: E-commerce growth
In recent years there has been a surge in ecommerce traffic using the air freight market, driving up demand. It’s now estimated 50% of the air freight market is covered by ecommerce. This is a huge shift in a sector which has typically only been used by shippers of high-value or perishable items.
With global ecommerce sales set to hit $6.56trn (£5.14bn) in 2025, capacity utilisation of air freight by ecommerce is expected to amplify further.
Regular shippers need to prepare and take mitigating action. We have a full article on how regular air freight shippers can deal with the rise of ecommerce here.
Furthermore, ecommerce growth is expected to soar in emerging markets such as the Middle East or Latin America. Double digit ecommerce sales growth into Latin America is expected through to 2026, with the Middle East boasting similar numbers.
Factor 3: New aircraft supply constraints
Both Boeing and Airbus is reporting problems with production delays. Aircraft are seemingly easier to sell than they are to build. The waiting list for new deliveries is only getting longer.
Airbus have delivered 643 aircraft in 2024 up to the end of November, against orders of 779 and a waiting list of over 8500.
Growth of the fleet isn’t keeping pace with demand for new planes. Meaning total available cargo capacity is increasingly falling behind industry’s demand for aviation transportation.
Factor 4: New US Tariffs, particularly targeting China
The prospect of new, aggressive, US tariffs on imports would be heavily disruptive for the air freight sector. In the election campaign, Donald Trump spoke of up to 20% tariffs on all goods and 60% on Chinese imports.
Then in a series of social media posts after the election victory, promised tariffs of 25% on Canadian and Mexican goods, then a further 10% on Chinese goods, on day 1 of his presidency. It’s clear a protectionist mood is resonating with the US population.
Whatever form the tariffs take, they are sure to disrupt the air freight sector. Potentially in the form of lowering demand, but also increased administrative and compliance costs.
Factor 5: De-minimis threshold changes
Currently, the de-minimis threshold, the value at which goods imported become liable for duty payments and more thorough documentation, is $800 in the US. This compares with £135 for the UK and €150 for the EU.
Back in September 2024, the White House unveiled a plan to tackle the high volume of de-minimis shipments, as there are fears it’s being abused by big companies in the ecommerce space. However, it’s unclear how the changing administration will impact the plans for change.
But generally the incoming administration have had tougher rhetoric on tariffs and imports. Meaning we will likely see changes to the threshold in some form during 2025.
Factor 6: High probability of strikes at US East and Gulf coast ports
With no negotiations currently taking place between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX), there is a high probability of US port strikes from mid-January.
At present there is no contract agreement for dockworkers beyond January 15th, meaning ports on the East and Gulf coast will grind to a halt.
The result could be a surge in demand for air freight imports, particularly for those exporting from Europe to the USA. Again, impacting rates in the short term, and potentially medium or long-term depending on how long strike action persists and what backlog builds up at the sea ports.
It’s estimated every day of strike action will cause a week of backlog. However, the ports were very effective at dealing with the congestion built-up during the nearly 3-day strike back in October.
Recommendations for air freight shippers in 2025
Plan ahead
Book space as far ahead as reasonably possible. Organisation with your logistics is going to be crucial for success in 2025.
Proactive planning will be your best defence against unpredictability. With contracts signed, you’re locked in at more favourable rates, should disruption occur.
Conduct scenario planning
Take the time to construct multiple operational scenarios in the event of certain geopolitical, economic, and logistical disruptions.
Whilst some cannot be predicted, such as the Red Sea diversion, others can be forecasted with more accuracy. Planning for these eventualities in advance transforms your response capabilities.
Maintain flexibility in order sizes
Smaller air freight shipments as less likely to be divided up between aircraft or carriers. Meaning it all arrives at the same time. To mitigate some risk, ship more regularly but in smaller quantities.
Obviously, this is likely to have price implications. However, is an option worth considering if you are shipping significant quantities at the same time.
Supply chain visibility
Often overlooked by the air freight sector, but a visibility platform operating across your supply chain can be vital for finding optimisations, building resilience and cutting cost. With full transparency on timing, cost and emissions data, you can see exactly where there are bloated or delays in your supply chain and make amendments.
Our supply chain is the WTA Platform, accessible to all our customers with a simple login. Find out more here.
Subscribe to WTA’s Market Update
Our weekly logistics Market Update email provides up-to-date information on everything related to the logistics industry and forms a vital part of many customers’ planning.
Its insights can help guide decision making across air, sea and road freight. Whilst also providing vital information related to sustainability legislation and customs.
Logistics is always vulnerable to unexpected changes and the 2025 air freight landscape is no different. Success will be defined by the organisations that have effectively planned for disruption and remain adaptable as a result.
