Spotlight
Trans-Pacific air rates tumble
Air freight rates from China to the US fell sharply after the Lunar New Year, as the traditional post-holiday slump combined with mounting uncertainty over the impact of a US clampdown on low-value products under the“ de minimis” threshold. While the steep decline in spot prices has moderated into March, average rates from Shanghai to the US were down 29 % in February compared with the previous month in response to the regulatory and political messages emanating from the White House, according to Niall van de Wouw, chief air freight officer at rate benchmarking platform Xeneta.“ From the conversations we are hearing, some shippers are clearly looking for ways to minimize the impact of US tariffs, while others will be anticipating lower air freight rates if e-commerce volumes show a sustained dip,” van de Wouw noted in Xeneta’ s latest market update. Strong e-commerce demand last year filled all available air freight capacity out of China and kept the industry in peak season mode. However, de minimis regulations in the US allow one shipment of less than $ 800 in value to move between a single shipper and single consignee per day, duty free, clamping down on low-value Chinese imports. China accounted for twothirds of the 1.36 billion de minimis imports last year. Xeneta forecasts air freight growth of 4 % to 6 % in 2025 following the strong performance in 2024 when volume grew 12 %. But the growing trade tensions have placed“ a big question mark” over the outlook, van de Wouw noted.
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EU air freight surges ahead of tariffs
Forwarders are scrambling to support an unseasonal surge in air freight frontloading on westbound trans-Atlantic routes ahead of new US tariffs on imports from the European Union. The rising demand is starting to push up air cargo rates that jumped 8 % to almost $ 5 per kilogram in mid-March— repeating price levels from the peak shipping period ahead of Lunar New Year in late January. Niall van de Wouw, chief air freight officer at rate benchmarking platform Xeneta, said volume from Western Europe to the US rose 11 % year over year in the first week of March, significantly higher than the current global average demand. Martin Habisreitinger, COO for air freight at Hellmann Worldwide Logistics, said the surge in air cargo volume from Europe to the US was being driven primarily by the automotive sector. According to Loic Gay, global air freight leader at CEVA Logistics, demand on the trans-Atlantic has been elevated due to restocking efforts in the US.“ Flights are expected to operate at full capacity, and air freight rates will likely remain elevated, especially for main deck cargo space,” Gay told the Journal of Commerce.“ The main challenge currently facing the trans-Atlantic air freight lane is the significant reduction in freighter capacity compared to last year, with an estimated drop of 2,000 tons per week.”
Heathrow shutdown causes cargo chaos
Air freight forwarders were forced to recover cargo stranded at airports across Europe and the UK with inbound planes forced to divert following the complete shutdown of London’ s Heathrow Airport. Europe’ s busiest airport remained shut for a day after a fire at an electrical substation cut power to most of west London, including the airport, and led to the cancellation or diversion of more than 1,300 flights. IAG Cargo, the holding company for British Airways and Iberia, said in a customer advisory that it would be unable to accept any freight at the airport. The scale of the disruption to cargo is immense. In February, Heathrow handled
120,000 tons of air cargo, according to the airport authority, with record volume in 2024 that increased 10.4 % year over year to 1.5 million tons. Inbound aircraft were rerouted to Barcelona, Lyon and Glasgow, stranding passengers and severely disrupting air freight flows.“ Today’ s closure of Heathrow is going to have a profound impact on supply chains for days, and potentially weeks,” was the grim assessment of Angus Hind, director of UK-based forwarder Europa Air and Sea.“ Airline handling facilities are operating as normal, so airline transfers from European hubs and UK airports will continue to arrive on the ground and be processed as normal.” But the terminals will need to work through the backlog of freight when flights resume, Hind added.
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6 Journal of Commerce | April 7, 2025 www. joc. com