Air cargo demand worldwide saw a significant rebound in July in the middle of the U.S.-China trade war despite the closure of the de minimis provision in early May. According to the International Air Transport Association (IATA), total cargo tonne-kilometers (CTKs) rising 5.5 percent in the year prior—well ahead of 0.6 percent annual CTK growth seen in June.
Seasonally adjusted CTKs registered the second largest increase in the year, growing by 5.1 percent and only staying behind April’s performance.
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The IATA called the figures a consequence of shippers front-loading their goods into the U.S. ahead of both the Aug. 1 tariff negotiation deadline for most countries, and the separate Aug. 12 deadline for Chinese goods, which got extended another 90 days.
In some cases, shippers opted for air cargo instead of other slower modes of transport, said the association.
Willie Walsh, IATA’s director general, said the front-loading likely offset “a sharp decline in e-commerce, as the U.S. de minimis exemptions on small shipments expired.”
The Asia-to-North America trade lane was the lone exception to the growth experienced throughout the air freight industry, with year-over-year demand declining 1 percent. This marked the third consecutive month of declines after dips of 10.7 percent and 4.7 percent, making it the worst-performing of the trade lanes but still a sequential improvement.
However, the demand for air carriers out of both markets remains vastly different. While North American carriers saw a 0.7 percent year-over-year jump in air cargo demand in July, airlines out of the Asia-Pacific region had demand growth of 11.1 percent—the highest of all markets.
“Chinese exporters, for example, are refocusing a lot of their trade toward partners that are mor reliable than the U.S., particularly in Europe, and intra-Far East,” said Tom Crabtree, air freight analyst at Drewry Supply Chain Advisors, in a Wednesday market update.
The Europe-to-Asia trade lane saw the strongest overall air cargo demand upturn at 13.5 percent.
“While much attention is rightly being focused on developments in markets connected to the U.S., it is important to keep a broad perspective on the global network,” Walsh said. “A fifth of air cargo travels on the Europe-Asia trade lane, which marked 29 months of consecutive expansion.”
Air cargo demand for European carriers ticked up 4.1 percent in July.
The traditional peak season for air freight begins in September, with stronger export flows into the U.S. anticipated from Southeast Asia—particularly Vietnam, Thailand and Malaysia—surpassing volumes from China, according to a monthly September freight report from Dimerco Express Group.
According to that report, airlines are already preparing additional capacity to meet this growth, driven largely by AI servers, consumer electronics and other high-tech products on trans-Pacific eastbound routes.
Demand across trade lanes is still surpassing total capacity growth, which came in at a 3.9 percent jump in available cargo tonne-kilometers (ACTKs).
Asia-Pacific-based carriers saw capacity increase by 7.3 percent year-on-year, and carriers embedded in the markets appear to be reacting in kind after the July IATA data was calculated.
Data from air cargo analyst Rotate says capacity deployed on Vietnam-U.S. routes increased by 95 percent year over year in August to 2,400 metric tons.
The country’s state-owned air carrier, Vietnam Airlines, is launching a dedicated international cargo airline following the increase in demand. To support the move, the airline says it will convert several A321 passenger aircraft for freight use by late 2025. The first cargo aircraft is expected to enter service on regional routes in the fourth quarter.
According to the company, air cargo made up 65 percent of the carrier’s revenue in the second quarter, when tariffs most heavily impacted Chinese goods and Vietnamese exports began to soar as more cargo flowed through the country via transshipment.
Bangladesh is also benefiting from the recent shift, with Hong Kong Air Cargo has expanding its scheduled services between Hong Kong and Dhaka airports to twice weekly effective Tuesday.
Last month, Lufthansa Cargo and Indian air freight carrier IndiGo partnered up to offer freighter capacity form Dhaka to Los Angeles, with a transshipment stop in Vietnam’s Ho Chi Mihn City.
Global air cargo rates continue to largely ease lower, having dipped 1.7 percent in the week ahead of Aug. 25, according to air freight rate market data provider TAC Index.
