As demand slows and the ability to add fuel surcharges goes away, airlines are expected to see cargo revenues contract 4.7% this year.
This was part of the latest announcement by IATA, which makes interesting reading for the U-Freight Group, with our strong presence in the expedited international airfreight business.
IATA downgraded its guidance for air cargo volumes and airline revenue from cargo as global tariffs unleashed by the new Trump administration roil freight markets.
The trade association said air cargo demand is now expected to grow 0.7% year over year, with member airlines hauling 69 million tonnes, but below the previously projected 72.5 million tonnes. In 2024, air cargo volume grew 12%, an all-time high, based on an average of data sources. Six months ago, IATA predicted cargo volume for passenger and all-cargo airlines would grow 5.8% this year.
The US cancellation of the de minimis exemption, which allowed parcels valued below USD800 to enter the country without duty or complex customs procedures, for China and Hong Kong is also weighing down cargo volumes as e-commerce retailers shift from direct-to-consumer shipping to fulfilling orders from US warehouses stocked through less expensive ocean shipments.
The new estimates suggest the air cargo market could see a big slump in the second half of the year that cancels the normal peak season. IATA recently reported that cargo demand remained strong, growing 5.8% in April from the same month last year. Cargo traffic, which includes a distance component on top of tonnage, increased 2.4% year over year during the first quarter, according to IATA data.
Analysts attribute growth so far to businesses front-loading orders from overseas suppliers to import merchandise before announced tariffs kick in. That’s what happened as shippers anticipated sweeping tariffs from the Trump administration before they landed in early April. After the White House paused tariffs for 90 days to foster negotiations and lowered tariffs on Chinese goods to 30%, ocean and air volumes to the US have increased again as importers load up on goods before tariffs swing up again.
Many countries have retaliated against the US tariffs or plan to do so again when the US tariffs resume next month.
For more information about the U-Freight Group’s global air freight forwarding and logistics services, or our e-commerce logistics operations, please visit the relevant pages of this website or contact your local office, details of which can be seen here: https://www.ufreight.com/en/location
