Airfreight rates are expected to rise 5% to 15% this year rather than fall, while air cargo demand expectations have also shifted upwards to the impact of the Middle East conflict, said Xeneta in its Air Freight Outlook 2026 Mid-Year Update.
The analyst pointed out that these market predictions have changed markedly from its full-year 2026 forecast issued in December.
“Shipper long-term rates were set to fall 5% to 10% in full-year 2026. However, those rates are now expected to rise 5% to 15%, driven primarily by the supply chain shock caused by the escalation of conflict in the Middle East in February,” said Xeneta.
Xeneta also now forecasts full-year demand growth toward the higher end of the 2% to 3% range published in December.
Further, capacity growth is expected toward the lower end of a revised 2% to 3% range – down from the 3% to 4% published in December.
Explaining the increase in rate outlook, escalation of the Middle East conflict on 28 February removed 12% of global air cargo capacity overnight. This contributed to global air cargo supply growth of just 1% in the first half of 2026.
Demand grew 4% over the same period, ahead of the original 2% to 3% forecast for the full year 2026.
The supply-demand imbalance pushed rates higher across the board. Global air cargo rates, combining spot and long-term contracts, rose 17% year-on-year in the first half of 2026.
Niall van de Wouw, Xeneta chief airfreight officer, said: “On 27 February I would have bet on the Netherlands winning the World Cup before I put money on air rates jumping 40%. Yet that is what happened, with global spot rates up around 40% year-on-year in May. Spot rates are now plateauing, but they are not falling.
“Demand keeps defying gravity. Despite everything thrown at it, the market has still moved more volume than last year – the engine just keeps running and it is quite remarkable.
“Shippers should expect demand growth to ease through H2, while supply continues its recovery from the Middle East disruption. As the two converge, the market fundamentals look set to tilt back in the shipper’s favour – but we have been here before, so take nothing for granted.”
AI demand accelerates
AI-related business is aiding robust air cargo demand, driven by semiconductor and hardware shipments, said Xeneta.
Global semiconductor sales more than doubled year-on-year in April 2026, up 106%, the strongest growth since records began in 1986.
Though AI-related goods still account for less than 10% of total air cargo volumes, they are concentrated on the Transpacific, the year’s strongest trade corridor.
Meanwhile, e-commerce demand has stalled and it’s unlikely it will recover to its previous level, observed van de Wouw.
China’s low-value and e-commerce exports fell 7% year-on-year in May 2026, a sixth consecutive monthly decline, according to Xeneta’s data.
The European Union removed its €150 duty-free threshold for low-value imports on 1 July 2026, replacing it with a €3 duty per item and a further €2 handling fee expected in November.
“While e-commerce demand is cooling, AI-driven freight is booming, particularly on the Transpacific,” van de Wouw said.
“I cannot see the e-commerce growth engine being revived. There will always be a consumer demand for cheap goods manufactured in Asia, but the extraordinary demand growth of recent years will not be sustained. E-commerce was air freight’s single biggest growth pillar, but that is no longer the case.
He further stated that due to the geopolitical climate, industry stakeholders should be prepared for potential further shocks in the second half of 2026.
“On 27 February nobody would have envisioned what came the next day. Dubai Airport under missile attack was unimaginable, but it happened. If Dubai can be closed by rockets, what else is possible? There will be another wildcard and, just like the Middle East conflict, it will come at a cost for shippers. Those with live data and intelligence will navigate the next shock most effectively,” van de Wouw said.
