What do surging e-commerce, reshuffled trade routes, and evolving regulations have in common? They’re all shaping what could be a transformative year for air cargo in 2025. It’s a market built on agility and resilience, and the coming months could test both like never before. Judah Levine, Head of Research at Freightos, explored the trends and data shaping the year ahead in the recent Freight Market Outlook for 2025 webinar, breaking down both the opportunities and the pitfalls air cargo professionals need to watch out for in 2025.
E-commerce: The Driver That Won’t Quit
If 2025 had a buzzword for air cargo, it would be e-commerce. Platforms like Temu and Shein aren’t just thriving – they’re reshaping logistics with their ability to send inexpensive goods through premium air freight. Why? The U.S. de minimis exemption, which waives tariffs and customs paperwork for goods under $800. As Judah puts it:
The unusual use of expensive air cargo for inexpensive goods shows how e-commerce is rewriting traditional logistics rules.
But the skies may not stay as friendly.
Regulatory threats: The U.S. and EU are increasingly scrutinizing de minimis practices, with potential legislation that could alter the cost-benefit equation for air freight.
Strategic pivots: Chinese exporters are already exploring alternatives, like ocean freight to Mexico and regional warehousing, to offset air cargo costs and risks tied to possible de minimis restrictions.
What’s at stake in 2025? If new regulations are implemented, it could significantly impact the reliance on air freight for low-cost e-commerce goods, and force an e-commerce pivot toward ocean shipping, and impact volume and rate levels for the air cargo market.
Capacity: More Seats, Same Struggles
While air cargo capacity has rebounded to record levels thanks to increases in passenger flights and freighters, it’s far from smooth sailing. Russia’s airspace restrictions have forced carriers into less efficient routes, adding costs and reducing capacity on some lanes. Judah remarks:
Some carriers are rerouting flights, and that inefficiency is also helping rates stay elevated.
Here’s how capacity and rates are shaping up for 2025:
Capacity is back: Record-high capacity was maintained for much of 2024 and should continue into next year, but demand has been strong enough to keep rates elevated.
Rate resilience: Transpacific rates hovered at $5–6 per kilo in 2024, levels that were once peak-season highs but are now the new normal. If e-commerce demand remains a major factor, we can expect rates to behave similarly this year or even face additional pressure.
Unpredictable spikes: Preemptive planning by shippers and capacity additions out of China prevented chaos during the 2024 peak season, but any unexpected disruptions – like port strikes and, to some extent, tariffs – could still send rates climbing from an already elevated baseline.
The big question for 2025: Will capacity gains outpace demand? If e-commerce volumes hold steady or grow, rates are unlikely to plummet even as capacity grows. However, any major shifts – like tightened de minimis regulations (more on that below!) – could significantly alter the supply-demand balance.
2025: The Year of Strategic Planning
Why didn’t we see the chaos of past peak seasons in 2024? It boils down to smarter planning, better tools, and a more data-driven approach to managing volatility. Judah explains:
Advanced planning has led to high rates, but not the extreme spikes we’ve seen in previous years. By anticipating disruptions and leveraging technology, the industry is finally moving from reacting to proactively managing volatility.
Carriers shifted capacity to high-demand lanes, and forwarders secured space early, reducing spot market volatility.
In 2025, this trend will likely continue with the deepening use of:
Dynamic pricing tools and predictive analytics: Forwarders are embracing tech that analyzes real-time demand patterns and market conditions, enabling them to allocate resources more effectively and avoid costly bottlenecks.
Proactive capacity bookings: Shippers aren’t leaving anything to chance. They’re increasingly hedging against unexpected disruptions by committing to capacity months in advance, a strategy that balances cost management with operational certainty.
De Minimis, Tariffs, and Trade Wars: A Volatile Trio
The U.S. tariff landscape will play a pivotal role in shaping ocean freight demand and timing. With new tariffs on Chinese imports likely under the incoming administration, shippers are expected to front-load inventory mostly by ocean freight early in the year. However, the impact on air freight will depend on how the de minimis exemption is handled. Judah notes:
If de minimis is left untouched, we might see a continued surge in e-commerce shipments via air. But if it’s targeted, the calculus could change entirely. E-commerce thrives on speed, but without access to de minimis both the current speed and cost savings realized by sending these goods by air will be greatly reduced. Many low-value goods may shift to ocean and domestic warehousing strategies.
Another factor to watch is the diversification of sourcing away from China. Vietnam, Mexico, and other countries have gained prominence as alternative manufacturing hubs, a trend that could affect trade lanes and capacity allocations in 2025.
The Road Ahead: Resilience Through Innovation
Judah sums it up,
We’ve moved from black swans to a world where volatility is the new normal.
For air cargo professionals, 2025 will be about navigating this volatility with resilience. From embracing technology to leveraging predictive analytics, the industry is poised to evolve in response to both opportunities and challenges.
The key takeaway? Keep your eyes on the data, stay agile, and be ready to adapt. With the right strategies, 2025 could by WebCargo!
