Growing air cargo demand driven by e-commerce and semiconductor volumes is expected to result in another tight air cargo market in 2025 with shippers facing the prospect of their transport spend rising further.
In an air cargo market outlook report, Xeneta chief airfreight officers Niall van de Vouw and airfreight analyst Wenwen Zhang predict that air cargo demand will rise by 4-6% next year while capacity will increase by 3-4%.
The rise in airfreight demand will be driven by e-commerce demand, which is expected to rise by 14% annually until 2026.
However, the authors warned that increased regulatory scrutiny on e-commerce from the US, European Union and Indonesia could dampen demand levels.
Meanwhile, the traditional air cargo market will see a return to growth on trade lanes out of Asia.
“A rebound of the traditional airfreight market will be supported by demand for semiconductors related to generative AI and advanced computer processing,” the authors said.
They pointed out that global shipments of silicon wafers – a fundamental material in the manufacture of most semiconductors and associated electronic devices – is estimated to grow around 10% in 2025, following an estimated 2% decline in 2024.
Zhang warned that while these trends will largely be felt on lanes out of Asia, carriers could move capacity out of other regions to capitalise on the market conditions, which in turn could put pressure on these markets.
On the other hand, it is thought the rise in air cargo volumes related to the Red Sea crisis has now plateaued and may even recede slightly next year – although this comes with the caveat that there could be further disruption given the current geo-political environment.
The threat of further strikes at container ports on the US east coast and Gulf Coast in January could also cause congestion and deteriorating schedule reliability for box lines and result in modal shift to air.
The report said that while volume growth will slow from around 11% this year, demand will still grow ahead of supply.
Zhang said: “It is unlikely that the tight airfreight market of 2024 will ease in 2025. It would be wise to manage the expectations of your internal stakeholders that your transportation spend might be higher next year.”
The report added: “We are entering an area with unpredictable turbulence. The best approach to a period of high uncertainty is to be alert to quantitative signals from the marketplace as it could avoid shippers over-reacting and creating a vicious circle of escalating rates.”
As a result of demand growing faster than supply, airfreight rates are likely to remain elevated in 2025, although this will vary from trade lane to trade lane.
“Demand and supply growth will not be spread evenly across the world’s air cargo corridors – quite the opposite.
“If you are a shipper using an ex-Asia corridor you will have to consider very different supply/demand balance shifts compared to a business shipping goods out of South America.”
Last week, IATA predicted that air cargo volumes would increase by 5.8% next year.
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