Tariff increases and regulatory shifts are fueling volatility in air cargo markets, forcing freighter operators to adjust trade flows and capacity strategies.

The Baltic Air Freight Index (BAI00) rose 2.53% month-over-month in April, supported by strong outbound demand from China and North America. However, underlying disruptions — including U.S. tariff hikes and the May 2 cancellation of the de minimis exemption — are reshaping freighter operations and supply chain dynamics.

In a new analysis, Baltic Exchange said freighter operators are repositioning aircraft as e-commerce shipments decline and cost pressures mount. Routes from Frankfurt to the U.S. (BAI24) and London to Southeast Asia (BAI43) saw sharp declines of 17.15% and nearly 21%, respectively, signaling weaker demand.

Meanwhile, Shanghai Pudong (BAI80) recorded a 7.37% increase, with rates to the U.S. and Europe climbing.

"The latest tariff adjustments are creating significant uncertainty for air cargo operators," the Baltic Exchange said in a statement. "Freighter capacity is being redeployed to alternative markets, but the long-term impact on pricing and availability remains unclear."

Industry analysts expect further adjustments in fleet deployment, particularly in North Asia, where excess freighter capacity may emerge post-tariff.

North American air cargo networks, however, are absorbing redirected aircraft, fueling regional demand spikes. Short-term charter and ACMI contracts are becoming the preferred strategy as carriers navigate policy uncertainty.e

"Freighter operators are facing a turbulent second quarter," the Baltic Exchange noted. "With tariffs reshaping demand patterns, capacity planning is increasingly reliant on short-term agreements and flexible fleet positioning."

It added that shippers and logistics firms face mounting questions over pricing strategies and long-term freight procurement.

"If regulatory conditions continue shifting week to week, securing cost-effective and resilient supply chains will be increasingly difficult," Baltic Exchange said.

It added that the second quarter is expected to see continued disruptions, as tariffs reshape trade flows and freighter operators recalibrate network strategies in response to evolving demand patterns.