Dive Brief:
- Close to half of air cargo forwarder volumes were purchased on the spot market in Q4 as shippers focused on short-term tactics, shifting contracting behavior in the market, according to a Jan. 7 Xeneta report.
- Meanwhile, one-year contracts accounted for only 24% of new deals during the quarter, down 20 percentage points from the prior quarter as buyers opted not to lock in rates during peak season.
- However, the number of one-year contracts was still eight percentage points higher year over year. Looking ahead, the question remains whether longer-term contracts will regain ground if supply continues to outweigh demand in 2026, per Xeneta.
Dive Insight:
Spot rates continued to follow a downward trend in December, with the average rate falling 4% year over year to $2.83 per kilogram, Xeneta reported. At just one percentage point lower than November’s 5% YoY decline, the report said last month’s results might indicate a slowdown in rate erosion, although not a reversal of the trend.
Rates from Southeast Asia to North America were down 6% year over year to $5.87 per kilogram in December due to greater available capacity, Xeneta reported. Rates from Northeast Asia to North America stood at $5.15 per kilogram, down 6% YoY.
Meanwhile, a 6% YoY boost in December air cargo volumes pushed overall 2025 air cargo demand up 4% in chargeable weight YoY. The increase reflects shipper willingness to shift away from other modes in favor of air freight, which is faster and more reliable, according to Xeneta Chief Airfreight Officer Niall van de Wouw.
As the air cargo market battled volatility in 2025 spurred by the Trump administration's efforts to transform U.S. trade policies, the resultant uncertainty ended up helping the industry, per Xeneta. The market held up better than expected, staying relatively steady despite shifting trade patterns, the end of the de minimis exemption for e-commerce shipments into the U.S. and changes in ocean freight patterns.
Despite numerous challenges, air cargo demand growth experienced tailwinds from investments in the development of artificial intelligence tools, according to van de Wouw.
“This supported flows of high-value goods and is expected to continue. In contrast, the less buoyant forward-looking signals for e-commerce, particularly Chinese cross-border e-commerce exports, are worrying,” he added.
Looking ahead, Xeneta predicts a 2% to 3% increase in cargo volumes in 2026 — a more cautious outlook compared to 2025.
However, as van de Wouw mentioned, an overall flatlining of e-commerce shipments out of China will dampen the outlook for certain carriers and forwarders, per the Xeneta report. E-commerce is likely to grow at a slower pace in 2026 due to policy changes toward a “more regulated landscape.”
“China’s cross-border e-commerce volumes were flat in October and November,” van de Wouw said. “If we see a third consecutive month of lower e-commerce growth out of China, that is a big signal — while duties imposed by other countries may present more unwelcome news for the air cargo market going forward.”
Air cargo e-commerce volumes are also likely to be further impacted by falling consumer purchasing power due to higher costs for essential items, he added.
“But with many questions remaining over trade, and geopolitical tension adding a further layer of uncertainty, I personally think something has to give in 2026 from a volume perspective — and that means there’s going to be more in it for shippers in terms of lower rates,” van de Wouw said.
Overall, van de Wouw foresees a downward trend for market fundamentals in 2026, although volatility and the possibility of any crisis may — once again — prove to be favorable to the industry.
“When I look at the biggest risks this year, right now I would say it’s more likely we will see something that will put a stopper on the level of airfreight growth we have seen in the last two years,” van de Wouw said. “Overall, the market has been relatively stable, but we are entering a phase when shippers will be looking for better rates and demand may deteriorate in the first quarter of the year.”
