CARGOCONNECT-APRIL2025 - Flipbook - Page 86
REPORT
AIR CARGO IN FLUX:
SHANGHAI RATE DROP HINTS
AT E-COMMERCE SLOWDOWN
The global air cargo market is
navigating a period of uncertainty
as shifting trade dynamics and
regulatory changes begin to
impact e-commerce volumes.
Recent data reveals a significant -29% Month-on-Month
(MoM) drop in spot rates from
Shanghai to the US, falling to
US$3.23 per kg in February. This
decline, attributed to the US’s
temporary removal of the de
minimis exemption on Chinese
shipments, may signal the early
e昀昀ects of geopolitical tensions on
air cargo demand.
Key Highlights: E-Commerce
and Air Cargo Dynamics
n Shanghai Spot Rates Plummet: Spot rates from Shanghai
to the US dropped -29% MoM
to US$3.23 per kg, reflecting
potential early impacts of USChina trade tensions.
n E-Commerce Shifts: The
e-commerce boom initially
overwhelmed Hong Kong and
southern China, pushing demand
eastward to Shanghai. With volumes now declining, Shanghai
is the first to feel the impact
as capacity shifts back to coste昀昀ective hubs like Hong Kong.
n Uneven
Impact: While
Shanghai-US rates fell sharply,
Shanghai-to-Europe spot rates
saw only a modest -2% decline
to US$3.86 per kg, highlighting
regional disparities.
Global Air Cargo Performance:
February Insights
n Demand Growth Slows: Global
air cargo demand grew by +4%
Year-on-Year (YoY) in February, a
slowdown from the double-digit
growth seen in 2024. Adjusted
for the earlier Lunar New Year,
combined January-February
demand rose by +3%.
n Capacity Stagnation: Global air
cargo capacity remained 昀氀at YoY
in February, with a +1% increase
for the 昀椀rst two months of 2025.
Dynamic Load Factor: Held steady
at 59%, indicating balanced but
cautious market conditions.
Spot Rates and Market
Trends: A Mixed Picture
n Global Spot Rates: Increased
by +10% YoY to US$2.53 per kg,
the slowest growth pace since
June 2024. MoM rates declined
by -5%.
n Seasonal Rates: Dropped -1%
YoY to US$2.21 per kg, re昀氀ecting changing supply-demand
dynamics.
Trade Corridor Performance:
n Northeast Asia to Europe: Rates
rose +10% YoY to US$4.32 per
kg but fell -2% MoM.
n Northeast Asia to North
America: Rates saw the steepest
MoM decline, dropping -17% to
US$3.79 per kg.
n Transatlantic Market: Europe
to Latin America and North
America recorded high singledigit MoM growth, with rates
remaining over +20% higher
than a year ago.
creating uncertainty, potentially
impacting e-commerce volumes.
n Proposed Port Call Fees:
US port call fees on Chinesebuilt ships could disrupt ocean
shipping schedules, driving
up container freight rates and
prompting a shift from sea to air.
Stakeholder Adjustments:
n Airlines: Reassessing freighter
capacity and considering route
shifts toward Southeast Asia or
the Transatlantic market.
n Freight Forwarders: Delaying
Block Space Agreement (BSA)
negotiations amid market uncertainty.
n Shippers: Postponing annual
contract negotiations and opting
for shorter-term agreements to
mitigate risks.
Trade Tensions and Their
Ripple Effects
n US-China Tariffs: The US’s
removal of the de minimis exemption on Chinese shipments is
The Road Ahead: Uncertainty
and Adaptation
n E-Commerce Uncertainty: The
air cargo market’s recent saviour,
e-commerce, faces potential
headwinds due to regulatory
changes and trade tensions.
n Regulatory Impact: The outcome of US-China trade tensions
and proposed tariffs remains
unclear, adding to stakeholder
anxiety.
n Market Outlook: Xeneta forecasts +4-6% growth for 2025, but
trade tensions and e-commerce
volatility could alter this trajectory.
Conclusion: A Market in Flux
The air cargo industry is at a
crossroads, with the slump in
Shanghai spot rates potentially
signalling broader challenges
ahead. As trade tensions persist
and regulatory uncertainties
loom, stakeholders are cautiously
adapting their strategies. The
coming months will be critical
in determining whether this is
a temporary blip or a harbinger
of more signi昀椀cant disruptions
for the global air cargo market.
Courtesy: Xeneta
86 | CARGOCONNECT APRIL 2025
