Global air freight rates continue to plunge in June

The outlook for the air freight industry in the second half of 2025 has become less positive as tariff uncertainty weighs on rates and reshapes shippers’ procurement strategies.

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Air Freight

Spot air freight rates fell in June as capacity exceeded demand for the first time in 19 months amid concerns over tariffs, according to a July 4 report from Xeneta.

Global air freight spot rates fell for the second month in a row in June, falling 4% year-on-year to $2.50/kg. Rates from Southeast Asia to North America fell 11% year-on-year to $4.79/kg, while rates from Northeast Asia to North America rose 8% year-on-year to $4.72/kg.

“It’s wrong to think falling air cargo rates on key trade corridors automatically represent a boon for shippers,” said Niall van de Wouw, Xeneta’s director of air freight. “With weaker consumer confidence, low rates are little comfort when underlying demand is deteriorating.”

The Xeneta report said that despite a 3% year-on-year increase in air freight demand in the first half of 2025, the industry is expected to face a “less rosy outlook for the remainder of the year” due to looming country-specific tariffs and changes to the US de minimis duty exemption. This uncertainty is not only impacting air freight rates but also clouding future demand.

“The air cargo market is losing altitude amidst so much uncertainty,” said van de Wouw. “For consumers who were already under severe financial pressure from the rise in the everyday cost-of-living, the added cost of tariffs means they are more likely to think twice about buying many of the types of goods which are exported and imported by air.”

The Trump administration’s temporary suspension of country-specific tariffs is scheduled to be lifted on August 1, with some tariffs differing from the initial tariffs that President Donald Trump first announced in April.

“We are starting to see the longer-term effects of all this uncertainty because a lot of damage has been done,” said van de Wouw. “This might be the new reality for the foreseeable future as the industry is facing a much more challenging second half of the year.”

The industry’s uncertainty has also spilled over into peak season bidding as shippers adjust their freight procurement strategies, according to Xeneta. For example, the share of medium-term contracts of three to six months increased by 8 percentage points year-on-year, largely at the expense of annual or longer-term agreements.

However, compared to Q1, the share of three-month contracts decreased by 12 percentage points, meaning that “some tenders earlier in the year proceeded out of necessity, particularly for shippers who place a premium on service reliability,” Xeneta said.

Freight forwarders also took a cautious stance in June, with 46% of their freight volumes purchased in the spot market. Xeneta said this decision could mean that forwarders expect further price declines.

“Their wait-and-see approach favours flexibility over long-term commitments - for now,” Xeneta said.

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