The air cargo industry is capitalizing on an extended peak season as e-commerce demand intensifies competition for aircraft space, setting the stage for a robust finish. According to logistics experts, this surge in activity, which began nine months ago, is likely to extend well into the first quarter of 2025—a period typically marked by a slowdown post-holiday rush.
To date, air cargo volumes are up by approximately 12% compared to the same period last year, based on a composite of industry data. This growth is driven by a potent mix of factors, including an influx of e-commerce parcels from Asia-Pacific, diversions due to delays in Red Sea shipping, and a marked scarcity in capacity. Notably, a recent dockworker strike in the U.S. prompted some companies to switch from sea to air freight, further tightening available space. Moreover, the push by Chinese factories to ramp up shipments after the Golden Week holiday has also bolstered air freight volumes.
Tim Robertson, CEO Americas of DHL Global Forwarding, highlighted in a virtual media briefing, “We expect to see a significant increase in volumes, and the current conditions suggest this trend will continue.” He emphasized the expected strength in air exports from Asia, including regions like Thailand and Vietnam, which have increasingly taken on manufacturing roles traditionally held by China.
Despite a slight dip in September, where growth decelerated to 9%, the year has seen substantial gains. July and August, typically slower months, recorded increases of 14% and 11% in shipments, respectively. This shift in dynamics is partly due to a stronger baseline established in September 2023 when the market began to recover.
The air cargo sector not only saw a 10% year-over-year increase in tonnage in early October but also reported a higher fill rate of cargo space. According to Xeneta, cargo space utilization rose to 62%, up from 60% in September.
Airline earnings reflect these robust market conditions. United Airlines reported a 25% increase in cargo revenue for the third quarter, reaching $417 million, while Delta Air Lines saw a 27% rise, earning $196 million from cargo operations.
The persistent demand for air freight, especially from China, has kept rates high throughout the year. The industry has adapted to not just one, but multiple peak seasons, blurring the traditional off-season lines as e-commerce continues to drive shipping strategies.
E-commerce’s dominance is evident, accounting for over 20% of global air cargo volume and approximately 65% of the trans-Pacific trade. This has been further amplified by major retailers like Shein, Temu, and Alibaba, who have leveraged their market power to secure significant capacity ahead of the fourth-quarter rush, often through chartered freight services.
The result is a market where many companies are left scrambling for available space on scheduled flights, particularly on routes from China to the U.S. Sean Francisco, COO for the Americas at Apex Logistics, noted on a recent podcast, “They bought early and they bought big, making it difficult for many businesses to strategize their air freight due to the reduced available capacity.”
With aircraft utilization rates in Asia nearing 90% over the summer, and with ongoing disruptions like the Red Sea shipping delays and regional conflicts in the Middle East affecting flight routes, the balance of air cargo capacity and demand continues to be a critical issue.
As we move forward, the air cargo industry remains a vital component of global trade, navigating through peak surcharges, capacity crunches, and shifting manufacturing hubs, all while keeping the global supply chains moving.
