While it’s uncertain what effect geopolitical events and President Trump’s tariff scheme will have on the air cargo this year, 2024 saw the industry flying high with air cargo demand outpacing capacity worldwide.

Willie Walsh, director general of the International Air Transport Association (IATA):

“It was a year of profitable growth. Air cargo was the standout performer in 2024, with airlines moving more air cargo than ever before.”

According to IATA, 2024 cargo demand, measured in cargo tonne- kilometers (CTK), increased 11.3% (12.2% for international operations), compared to 2023. This exceeded record volumes set in 2021. Full-year capacity in 2024, measured in available cargo tonne-kilometers (ACTK), increased by 7.4% compared to 2023 (9.6% for international operations).

While IATA finds that full-year yields averaged 1.6% lower than those in 2023, these yields were 39% higher than 2019.

Walsh adds:

“Demand was boosted particularly by strong e-commerce and various ocean shipping restrictions. This, combined with airspace restrictions, which limited capacity on some key long-haul routes to Asia, helped to keep yields at an exceptionally high level. While average yields continued to soften from peaks in 2021-2022, they averaged 39% higher than 2019.”

Other IATA findings show that air cargo now comprises 15.6% of industry revenues compared to 12% in 2019, with the air cargo market growing across all regions and major routes. Moreover, yields remain about a third above 2019 levels—with no sign of reverting.

“There does appear there that there’s been a structural change for the better since the pandemic,” adds Brendan Sullivan, IATA’s head of cargo.
2025 estimates IATA estimates that growth in 2025 will be a moderate 5.8%, which, it says, is in alignment with historical performance. “Economic fundamentals point to another good year for air cargo—with oil prices on a downward trajectory and trade continuing to grow,” says Walsh says.

However, 2025 began with lower-than-expected growth in global air cargo demand, reports industry analysts. Xeneta’s data showed global air cargo demand in January at +2% year-on-year compared to the double-digit monthly increases throughout last year.

According to Xeneta’s chief airfreight officer Niall van de Wouw, January’s data was impacted by the Lunar New Year, which came earlier this year than last year and, therefore, reduced volumes out of China.

“But the big drop in demand was still a surprise,” says van de Wouw. “Nonetheless, the air cargo market is entering a period of uncertainty, which makes planning extremely challenging.”

A report from WorldACD Market data confirms that this year’s dip in air cargo tonnages during the Lunar New Year period was relatively shallow compared with last year.

WorldACD reports:

“The overall increasing trend of e-commerce demand since last year might have contributed to this dynamic. But the trends and underlying factors for air cargo tonnages from China and Hong Kong are rather complex this year and remain difficult to interpret, especially until we’re well clear of the effects of the Lunar New Year and recent U.S. de minimis rule changes, and reversals.”

Further analysis indicates that there was no significant difference in the performance this Lunar New Year of China and Hong Kong origin cargo to Europe or to North America—or, indeed, to the U.S.

WorldACD:

“So, there’s no real evidence, in data terms, of a significant level of ‘front-loading’ activity in anticipation of the expected tariffs in the U.S. on China-origin air cargo—nor of the confusion caused by U.S. de minimis rules for China leading to unexpectedly low volumes of China/HKG origin cargo to the U.S.. But it’s also possible that those factors may have cancelled each other out, to some extent.”

Possible double whammy

Many see Trump’s strong interest in using tariffs as a policy tool as possibly bringing a double whammy for air cargo, thereby boosting inflation and deflating trade.

“It’s going to take a sledgehammer to crack that level of consumer demand,” says Xeneta’s van de Wouw. “I’m not sure blocking de minimis alone is enough. China’s e-commerce was not set up to take advantage of de minimis loopholes. It has taken advantage of consumer demand for cheap, fast goods.”

Of note, a recent study by Public Desire ranked the most “online shopping addicted” country to be China, followed by South Korea and Taiwan. The U.S. ranked 6th behind the U.K. (4th) and Mexico (5th).

Xeneta reports that in 2024, China cross-border e-commerce shipments to the U.S. accounted for 25% of its total global sales and filled over 50% of cargo capacity from China to the U.S..

However, Trump’s suspension of Section 321 of the de minimis entry that impacts the $800 duty-free threshold for low-value imports entering the U.S. could have a profound impact on airfreight capacity between China and the U.S. and beyond.

This would prohibit these import shipments from de minimis entry, thereby increasing costs and adding time-consuming entry filing requirements and potential customs delays.

Xeneta’s van de Wouw:

“We don’t know what will happen, but we do understand that uncertainly is not good for trade confidence. If I were a shipper, I would not be rushing to make too many plans to take any drastic measures. I’d have my team ready to do things differently; but I’d wait to see what happens. Because, right now, there’s a lot of rattling and noise, but little clarity.”

E-comm bump

Nevertheless, e-commerce and express networks have the biggest impact on boosting air cargo demand. Boeing’s “World Air Cargo Forecast 2024-2043” finds that the entry of new e-commerce market players significantly accelerated air cargo growth in the latter half of 2023 and into 2024.

Boeing maintains that global e-commerce revenues are forecast to rise around 9% per year through 2029, with the fastest growth in the emerging markets of South Asia and Southeast Asia. “Air cargo networks will play an essential role in this expansion,” states Boeing in the forecast.

IATA finds that while currently e-commerce averages 20% of cargo business industry-wide, it expects e-commerce to grow to at least a third of all cargo shipments. In fact, industry experts expect that by 2027, e-commerce could become a $8 trillion market segment with air cargo reaping a significant portion of the business.

“However, the industry needs to keep working on issues surrounding speed and transparency, says IATA’s Sullivan. “Shippers and their customers need the goods to travel quickly and safely—and they need to know where those goods are every step of the way.”

Xeneta’s van de Wouw adds: 

“Even if de minimis is being blocked, the e-commerce retailers will still keep selling and shipping the goods. There may not be a significant impact on air freight rates in the short term in this scenario, even if it causes chaos at the receiving airport in the U.S.”

Consequently, van de Wouw sees the winners being general freight shippers globally as capacity is deployed elsewhere, thereby placing a downward pressure on rates in these markets.