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Air Freight Demand Surges on Tariff Pressures but Challenges Persists

Aug 19, 2025 | , , , , , , , , ,

Global air cargo markets have entered an unusual mid-summer upswing as US importers accelerated shipments to avoid rising tariffs. July volumes rose strongly against seasonal norms, fuelled by front-loading, modal shift from ocean to air, and persistent trade uncertainty.

The sharp increase in shipments came as US tariff deadlines prompted companies to expedite goods by air rather than risk higher costs or long delays at sea. Businesses turned to aircraft to move time-sensitive cargo more quickly, driving a five per cent uplift in volumes compared with the previous year. The rise followed only modest growth in June and has temporarily restored load factors to levels last seen a year ago.

However, carriers now face the challenge of adjusting capacity after rapidly adding flights in anticipation of prolonged demand. With inventory-building cycles completed earlier than expected, airlines are rationalising schedules and redeploying aircraft across trade lanes to protect yields. Asian carriers, in particular, are having to reassess networks as the traditional electronics and consumer goods peak season has been disrupted.

Despite the boost in cargo volumes, global average spot rates continued to soften, recording a third consecutive monthly decline. The imbalance between seasonal contract rates and shorter-term spot prices has widened, signalling subdued confidence. Rates on major corridors show mixed trends: transpacific lanes weakened sharply from Southeast Asia and mainland China, while Northeast Asia held firmer thanks to strong demand for high-tech shipments. The transatlantic market was the rare exception, where reduced belly-hold capacity combined with tariff-related front-loading to push prices higher in both directions.

Additional headwinds loom. The imminent removal of the US de minimis exemption for low-value shipments will particularly impact eCommerce exports from Asia, the UK, Canada, and Mexico, further distorting flows. Earlier curbs on Chinese parcels already triggered a dramatic fall in volumes.

Looking ahead, uncertainty over tariff outcomes remains the single largest influence on airfreight demand. While disruption may continue to support short-term cargo volumes, analysts warn that once the “piggybacking” effect of front-loading subsides, demand could retreat quickly, leaving airlines exposed to excess capacity and weaker yields.

With demand surging, tariffs shifting, and carrier schedules in flux, securing space and certainty has never been more critical. Metro is actively monitoring capacity, adjusting routings, and working with trusted carrier partners to protect our clients’ cargo.

Our latest innovation takes visibility even further. Real-time flight telemetry tracking on Metro’s platform provides shippers with:

– Live aircraft position and route mapping
– Accurate departure and arrival confirmation
– Time-stamped milestone events, updated in real time

This level of transparency means you can plan confidently, optimise inventory, and protect service levels even in unpredictable conditions.

Partner with Metro for smarter, faster, and more resilient air freight solutions, powered by live data and long-standing carrier relationships.

EMAIL Andrew Smith, Managing Director, today to explore how we can support your success.

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H1 2025: Six Developments Reshaping Global Trade

Aug 19, 2025 | , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

The first half of 2025 has been one of the most turbulent periods for supply chains in recent memory. From renewed tariff wars to fresh geopolitical flashpoints, logistics professionals have had to contend with a constantly shifting landscape.

At the same time, structural challenges around skills, safety, and sustainability have continued to grow. Here we review six developments that defined H1 2025.

1. Tariffs return to the fore
The pause in US tariff escalation ended in August, with the White House reintroducing “reciprocal” tariffs that apply baseline duties of 10% to all countries and higher rates of 10–41% depending on origin. The UK sit at the low end, while Syria faces the steepest levels. Brazil has been singled out further, hit by an additional 40% levy. Canada also saw tariffs raised from 25% to 35% on certain goods, justified by Washington’s claim that Ottawa has not done enough to curb fentanyl flows.

The executive order applies from 7 August 2025, with a grace period allowing cargo already loaded onto vessels before that date to arrive until 5 October 2025. To add complexity, US Customs will also impose new fees on Chinese-built or operated vessels from 14 October, potentially forcing alliances such as the Ocean Alliance into costly fleet reshuffles. Carriers are already working through how to redeploy capacity to avoid penalties, with COSCO and OOCL particularly exposed.

2. New shipping alliances reshape networks
The recomposition of global shipping alliances in Q1 has reshaped carrier strategies. The launch of the Gemini Cooperation between Maersk and Hapag-Lloyd marked one of the most significant realignments in recent years, focused on achieving 90%+ schedule reliability. Shippers are already seeing more dependable services, but questions remain about whether premium pricing will follow.

Other alliances, particularly Ocean and THE Alliance (now Premier Alliance), are recalibrating networks, with competition sharpening across Asia–Europe and transpacific trades. For shippers, the alliance changes mean rethinking service contracts and adapting to new network structures that could endure for much of the decade.

3. Houthi attacks deepen Red Sea crisis
The Red Sea crisis, triggered by Houthi rebel attacks, has now stretched on for nearly two years. In July 2025 the threat escalated further with the sinking of the Magic Seas, a Greek-operated vessel targeted for its links to companies calling at Israeli ports. Analysis suggests that one in six vessels globally could now be considered threatened under the Houthis’ broad definition of violators.

For container lines, this effectively rules out a return to Suez Canal routings before 2026 — and possibly not until 2027. Rerouting around the Cape of Good Hope adds up to two weeks to Asia–Europe journeys, pushing up costs and insurance premiums, and putting additional strain on fleet capacity. The Red Sea instability has been a reminder of how localised conflicts can have global consequences for supply chains.

4. Logistics skills shortages persist
The UK continues to face a significant shortfall in logistics skills, with the Road Haulage Association estimating a deficit of around 50,000 HGV drivers. The ONS also reports 6,000 fewer courier and delivery drivers than the previous year. With 55% of HGV drivers aged between 50 and 65, the demographic imbalance remains a long-term concern.

Factors include reduced access to EU workers post-Brexit, poor industry perception, and limited uptake of government training schemes. Although the crisis is not as acute as during the height of the pandemic, the ageing workforce and lack of young entrants mean structural shortages will continue. Rising wage costs, recruitment struggles, and bottlenecks in road transport all add to the burden on UK supply chains.

5. EV shipping challenges raise alarm
The growth of electric vehicle (EV) trade has created new safety risks at sea. Several high-profile fires on car carriers have been linked to lithium-ion batteries, sparking concern among insurers, regulators, and shipowners. Insurers are pushing for tougher loading protocols, enhanced crew training, and more advanced fire suppression systems.

For supply chains, this adds cost and complexity to automotive logistics, with carriers facing higher insurance premiums and the need to retrofit vessels. It is also slowing the momentum of EV exports, just as demand for cleaner vehicles accelerates globally.

6. Sustainability regulations tighten
Sustainability regulation is reshaping procurement strategies. The EU’s Carbon Border Adjustment Mechanism (CBAM) is beginning to impact trade in carbon-intensive products such as steel, aluminium, and cement, with importers required to report embedded emissions.

At the same time, sustainable aviation fuel (SAF) is moving toward a tipping point. UK and EU mandates are pushing airlines to integrate SAF into their fuel mix, with new investments underway to scale production.

While tariffs and geopolitics grab headlines, sustainability is quietly becoming a decisive factor in supplier choice, cost structures, and long-term resilience planning. For many organisations, compliance with emissions and ESG frameworks is no longer optional but critical.

Outlook
H1 2025 has exposed the vulnerability of supply chains to political shocks, armed conflict, safety risks, and structural labour shortages. Tariffs, alliances, and attacks have disrupted networks, while long-term challenges around sustainability and skills remain unresolved.

The message for supply chain leaders is clear: resilience, agility, and visibility will be critical in the second half of 2025, as disruption becomes the new normal.

H1 2025 has underlined how vulnerable global supply chains have become and staying ahead demands visibility, expertise, and a trusted partner by your side.

Metro’s account management team works proactively with customers to anticipate risks, share insights, and design solutions that are resilient and adaptable to change.

Our expertise encompasses dangerous goods and lithium battery shipping, customs, and multimodal freight, backed by a strong people strategy that includes apprenticeships, engagement programmes, and our Great Place to Work certification.

We are also leading the way on sustainability. Metro has been carbon neutral for five years, pioneering the use of Sustainable Aviation Fuel (SAF), while our MVT ECO platform helps businesses forecast, measure, and offset emissions across their global supply chains.

EMAIL Andrew Smith, Managing Director, to learn how Metro can build resilience into your supply chain.

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Front‑Loading and Hidden Inventory Disrupt Traditional Peak Season

Aug 5, 2025 | ,

The traditional second‑half transpacific cargo peak is unlikely to materialise this year as a wave of accelerated shipments in the first half of 2025 has drained demand from the later months, while significant volumes of hidden inventory remain stalled in supply chains.

In the first half of 2025, shippers brought forward large volumes of cargo in anticipation of increasing tariffs later in the year. This front‑loading intensified in May and June, particularly on Asia–US West Coast and East Coast routes. By July and August, the usual third‑quarter build‑up failed to materialise, with demand easing as warehouses filled with earlier‑delivered stock. Through August and September, significant volumes remained stored in bonded facilities and regional hubs across the US, delaying their movement into end‑markets.

US importers are taking a cautious stance, with many shifting to calling-off or ordering only what is immediately required, adopting a “wait‑and‑see” approach in response to ongoing uncertainty over the US economic outlook and potential trade policy shifts.

Hidden Inventory Dampens Air Cargo Flow
The holding back of cargo is affecting airfreight patterns. Instead of moving directly to consignees, goods are being held at warehouses, hubs and terminals throughout the supply chain, often without showing on anyone’s dashboard. This “hidden inventory” keeps spot demand artificially subdued while preventing a normal seasonal rate drop.

As a result, air cargo rates may remain supported and despite signs of a cooling demand environment. Market turnover is slowed, with more tariff turmoil pushing the impact of inventory release further into the year.

With peak volumes shifted earlier in the year, the traditional seasonal curve has flattened, making weaker‑than‑usual cargo surges likely in the third and fourth quarters. This shift creates capacity planning challenges for carriers that had anticipated a late‑summer rush, potentially leading to under‑utilised sailings or the need to adjust service rotations. At the same time, US importers are taking a cautious approach, placing smaller and more frequent orders while deferring larger commitments until there is greater certainty over the economic outlook and future trade policy.

Until the hidden stock is released and importers regain confidence, the transpacific market is unlikely to see the kind of seasonal uplift typical in past years. Both ocean and air freight providers may need to adapt to a longer‑than‑expected period of muted demand through the remainder of 2025.

Metro’s dedicated air freight team and expanding U.S. presence help shippers navigate shifting transpacific flows with confidence. From capacity management and efficient routing to agile supply chain control and inventory visibility, we keep your air cargo moving smoothly across the Pacific.

Email Managing Director, Andy Smith, to learn more.

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Transatlantic Air Cargo: Calm Surface, Hidden Currents

Jul 22, 2025 | , , , , , , , , , , , , ,

The transatlantic air cargo market may appear steady, with stable capacity and rates, but beneath this surface calm, subtle shifts are reshaping flows, costs, and opportunities, especially on niche routes like Canada–Europe and Mexico–Europe.

While wide-body and freighter capacity from Europe to North America has edged up around 2% so far this year, the opposite direction has slipped by about 1%. Recent months, however, reveal sharp month-on-month jumps, with capacity from Canada to Europe up 14%, and Europe to Canada up 16%. Airlines like Air Canada and Air France-KLM have expanded significantly, while others have held or slightly reduced services.

The capacity surge on Canada–Europe routes coincides with the summer holiday season, boosting passenger belly-hold space. But freight data points to something more: flown tonnages from Europe to Canada jumped around 10% in early July compared with the previous three weeks, though without a corresponding rise in average rates…yet.

On the pricing front, the top end of spot rates between Canada and the UK nearly doubled at the end of June, while France–Canada rates also climbed sharply. Strengthening UK–Canada trade ties, including the UK’s accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), are likely adding further momentum, potentially lifting logistics demand across both ocean and air freight.

Elsewhere, European exporters have seen steady or rising air cargo flows to North America:

– Italy has boosted air exports to the US by over one-third, focusing on fashion goods.
– France has lifted exports by nearly half, driven by luxury and pharmaceuticals.
– Norway fish exports to the US have surged over 50%.
– Ireland, concerned about possible US tariffs on pharmaceuticals, has seen air rates to the US climb since May, with sharper increases in July.

Softening Signs, But Cautious Optimism
Overall, transatlantic rates have eased with the arrival of summer and additional belly capacity, particularly on mainline Europe–US routes. Expect stable or slightly reduced spot pricing, typical for this seasonal slack period. However, some airlines are expressing optimism for the second half, buoyed by promising early signals from peak season negotiations.

A delayed US tariff deadline (now 1 August) and new trade measures affecting partners like Japan and South Korea could prompt a short-term wave of airfreight “front-loading.” Longer-term, shifting freighter capacity from Pacific routes toward the transatlantic may rebalance the market, while the removal of US de minimis import exemptions will reshape eCommerce flows into the US.

While today’s transatlantic air cargo market may seem subdued, pockets of demand and policy uncertainty are quietly stirring the waters. Shippers need to be agile to capture emerging opportunities and be prepared for the unexpected.

Metro’s dedicated air freight team and expanding U.S. presence help shippers navigate shifting transatlantic flows with confidence. From capacity management and multimodal routing, to agile supply chain management and inventory visibility, we keep your air cargo moving smoothly — across the Atlantic and around the world. EMAIL our Managing Director, Andy Smith, to learn more.

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