Air freight faces prolonged capacity constraints amid rising demand

The tightening capacity situation could continue for several years, with constrained availability of freighter aircraft and high demand driving up rates across key routes.

While air cargo demand has not yet surged during this year’s peak season, rates remain elevated due to the limited capacity available, particularly on export lanes from Asia to Europe and North America. Looking ahead, supply chain pressures are expected to persist as new aircraft production delays and sustainability regulations further restrict capacity growth.

Steady rate increases
Despite a quieter-than-anticipated peak season, air freight spot rates have seen steady increases on major trade routes in October. Spot rates out of Asia showed notable increases, with outbound rates from Hong Kong rising by more than 8% month-on-month and over 10% compared to last year. Shanghai showed an even stronger performance, with rates increasing by over 12% month-on-month and over 22% year-on-year. Other Asian markets, including India, Vietnam, and Thailand, have also seen sustained rate increases, reflecting strong export demand and constrained capacity.

While the peak season leading up to major holidays like Thanksgiving and Christmas has not delivered the significant rate spikes anticipated, the rise in prices signals a solid demand foundation.

Long-term capacity shortages expected to intensify
As the air cargo market looks beyond the current year, long-term capacity shortages are likely to become an enduring feature. Boeing’s production challenges and limited feedstock for aircraft conversions have constrained the introduction of new freighter capacity, while delays in new technology, such as Airbus’s A350 freighter and Boeing’s 777-8 freighter, further tighten the timeline for expanded availability. The first A350 freighter is now expected in late 2026, and production of the 777-8 freighter remains uncertain.

Additionally, the International Civil Aviation Organization’s (ICAO) 2028 emissions standards deadline is anticipated to impact freighter availability. These standards will limit the production of certain aircraft types, likely exacerbating the capacity shortage. As capacity remains restricted, competition for available space will drive rates higher.

The air freight sector faces an extended period of rate volatility and capacity restrictions that may last well into the decade.

Our block space agreements (BSA) and capacity purchase agreements (CPA) protect space and capacity on the busiest routes, so we can fly your cargo at the best rates.

Regardless of your cargo type, size and requirements, we have extremely competitive rate and service combinations, to meet every deadline and budget.

EMAIL Elliot Carlile, Operations Director, for insights and prices.