The air cargo market is continuing to cool and there is little evidence that airlines will this year gain a peak season boost, according to data provider Xeneta.
The data provider today released its market update for July, showing a demand increase of 4% year on year, while capacity was up 1% and the cargo load factor reached 61%.
However, average airfreight spot rates fell to $3.12 per kg from $3.40 per kg in July – although they remain up 28% year on year as a result of higher fuel surcharges and the Middle East conflict.
Xeneta said that this month-on-month decline in spot rates, and a slowdown in the pace of year-on-year rate growth from 38% in June and 41% in May, was a sign of a weakening market.
Demand growth in July also narrowed from the 8% improvement registered in June.
“The rate premiums airfreight buyers have paid since the escalation of the Middle East conflict in late February are continuing to unwind, with little evidence of a peak season boost for airlines and forwarders to look forward to, as the global air cargo market faces a slower second half of 2026,” said Xeneta.
Xeneta chief airfreight officer, Niall van de Wouw added that there were minimal conversations regarding charter capacity for the peak season.
“Very few people are talking about peak season,” said van de Wouw. “In all the conversations we’ve had with our shipper community, in only one was there talk of peak season charters.
“This is another signal of the lower expectation for the coming months,” he added.
The company recently upgraded its demand outlook for the year, but this was largely based on performance in the first half as opposed to expectations for the end of the year.
As a result of the weaker market conditions, Xeneta is expecting rates to continue to ease as the year progresses.
“Airlines will be fighting tooth and nail to avoid reducing rates as quickly as they went up. It’s not in their interests to lower rates quickly, but there is some relief for shippers with the market on a downward trajectory year-on-year,” explained van de Wouw.
“Rates are swinging backwards, and we expect that to continue, despite the situation in the Middle East still being unclear.”
Another development that has affected the air cargo market in July was the European Union’s implementation of a €3 customs duty on low-value parcels imported from outside the bloc.
Xeneta said that this development contributed to spot rates from Northeast Asia to Europe falling 13% month on month, with Southeast Asia to Europe down 9%.
“Most striking was China to Western Europe, where spot rates fell 22% month on month to $4.15 per kg – a far steeper July decline than the low single-digit falls seen in the same period in the last two years,” the analyst said, adding: “Market reports already point to freighter capacity being withdrawn from China–Europe e-commerce services.”
The other hot topic of the year has been the rise in AI shipments on the transpacific trade, with rates again up to North America.
Xeneta figures show that spot rates from Northeast Asia and Southeast Asia to North America were both 33% above late-February levels – although this too has eased from the 41% and 42% levels recorded at the end of June.
