Global air cargo spot rates fell for the second straight month in June, dropping 4% year over year as available capacity outpaced demand for the first time in more than a year and a half, according to new data from Xeneta. The decline has fueled concerns over a weakening market outlook for the second half of 2025 amid growing uncertainty around international trade.

Niall van de Wouw, chief airfreight officer at Xeneta, called this market performance "unsurprising," adding that while politicians are continuing to trade economic blows in the form of tariffs, the latest monthly intelligence also signals consumers are "voting with their wallets" and looking to save money on non-essential goods.  

Global air cargo volumes were flat in June, up just 1% year-on-year, while available capacity measured over the same period edged up 2%.

"The air cargo market is losing altitude amidst so much uncertainty," he said. "For consumers who were already under severe financial pressure from the rise in the everyday cost-of-living, the added cost of tariffs means they are more likely to think twice about buying many of the types of goods which are exported and imported by air."

With tariffs, there are no winners

"When Xeneta reported April's market data, we asked 'how bad will it be?' over the rest of 2025. That's certainly top of mind now for airlines and forwarders, but also for shippers and consumers. Every economist will tell you that with tariffs there are no winners."

"It's wrong to think falling air cargo rates on key trade corridors automatically represent a boon for shippers. With weaker consumer confidence, low rates are little comfort when underlying demand is deteriorating," van de Wouw added.

Pricing tethered to market forces

The report noted that air cargo data for June comes against a backdrop of mounting uncertainty. The temporary suspension of new US tariffs is set to expire on July 9, for most countries, and on August 13 for China, clouding forward-looking demand.

Simultaneously, a spike in crude oil and jet fuel prices, caused by the conflict in the Middle East, has yet to lift freight rates because air cargo pricing remains more tightly tethered to market forces than to input costs, he said.

"Compounding this trepidation is a weakening US dollar," van de Wouw said. "As most airfreight contracts are denominated in local currencies, the greenback's around 5 % depreciation (across several US dollar indices) has diminished the headline decline in dollar-based spot rates."

Xeneta said the global dynamic load factor —  Xeneta's measurement of capacity utilization based on volume and weight of cargo flown alongside available capacity — for air cargo in June reflected the market's downward trend, falling 2 percentage points year-to-year to 56%. 

Less rosy outlook for the rest of 2025

Despite this turbulence, air cargo demand for the first half of 2025 still grew by 3% compared to the same period a year earlier, but the industry is preparing for a less rosy outlook for the remainder of the year given the effects of looming tariffs and curbs on US de minimis exemptions for cross-border e-commerce goods.

"Last month, we said sentiment was driving a downturn, but now market fundamentals are starting to kick in. In this environment, at a certain moment, something's got to give," van de Wouw said.

"We are starting to see the longer-term effects of all this uncertainty because a lot of damage has been done. This might be the new reality for the foreseeable future as the industry is facing a much more challenging second half of the year," he added.

Most airfreight corridors recorded year-on-year rate declines in June, underscoring a broad market slowdown.

Xeneta said routes from Southeast Asia to both Europe and North America were particularly weak, posting double-digit drops in rates compared with the same period last year when prices had spiked.

In comparison, the North-East Asia to Europe corridor remained relatively steady. A surge in e-commerce volumes helped offset a shift in capacity toward the Asia–Europe market, keeping rates in balance. Backhaul routes from Europe and North America to Asia, however, continued their downward trend, reflecting persistent trade imbalances.

It added that only a handful of corridors defied the broader pattern. Rates from North-East Asia to North America climbed modestly, driven by jitters over the approaching end of the United States' 90-day tariff truce.

Transatlantic routes also edged higher: both westbound and eastbound spot rates posted single-digit increases year-on-year.