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Thursday, 21/08/2025, 11:36 (GMT +7)
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Air Cargo Market Faces Capacity Cuts After Tariff Front-Loading Wave
C.H. Robinson warns that airlines are cutting and adjusting capacity on U.S. routes after the July pre-tariff front-loading wave has ended, leading to excess capacity and the risk of rate volatility..webp)
Leading freight forwarder C.H. Robinson has issued a warning that airlines are now undertaking capacity rationalization on tariff-affected routes to the U.S. following the massive front-loading of shipments that occurred in July.
According to C.H. Robinson, the air cargo market is undergoing a widespread capacity adjustment. The reason is that during July, airlines proactively increased capacity on U.S.-bound lanes to meet the surge in demand from businesses looking to import goods before new tariffs took effect in August.
"With most importers having completed inventory buildup in July, carriers now face the challenge of right-sizing capacity to match new demand levels," C.H. Robinson stated.
Routes between Asia and the U.S. have been particularly hard-hit by a sharp drop in demand following the July rush, as companies filled their warehouses faster than expected.
"Asian carriers are particularly affected as the traditional peak season for electronics and consumer goods shipments to US and European markets has been disrupted by the frontloading cycle, forcing airlines to reassess capacity allocation across their networks," the company explained.
In addition, routes from China and Hong Kong have also seen a decline in e-commerce demand after the U.S. terminated its de minimis exemption policy.
However, there are a few bright spots on this trade lane. "Premium air shipments remain strong, including artificial intelligence servers and cryptocurrency mining equipment," C.H. Robinson noted. "However, this specialised cargo represents a relatively small portion of total market volume, and overall market conditions suggest rates will stabilise or decline as carriers compete for volumes in more price-sensitive segments."
On the policy front, the tariff truce between the U.S. and China, which was set to expire on August 12, was extended for another 90 days at the last minute. This extension means the U.S. will apply a 30% tariff instead of the previously threatened 145%.
Another market impacted by the August U.S. tariffs is Brazil, which has been hit with a 50% tariff since August 7. This tariff is causing "immediate disruptions" across key economic sectors.
"The agri-food, steel, coffee, citrus, and aerospace industries are seeing U.S. importers cancel or postpone air shipments, creating a sudden capacity surplus on Brazil-U.S. routes," C.H. Robinson said, concluding: "While US trade disruptions may temporarily improve space availability, rate volatility is expected as carriers adjust to reduced demand patterns."
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Source: Phaata.com (According to AirCargoNews)
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