Freight Market Update June 6th 2025

by Pro Carrier

Topic of the week: Air Cargo Capacity Shifts Amid Tariffs and De Minimis Changes

The air cargo industry is experiencing significant capacity shifts as shippers adapt to changing trade regulations and tariffs. Since the Trump administration announced reciprocal tariffs in April, China-US cargo volumes have dropped by up to 60%, with eCommerce bookings declining by 50% in May. The de minimis exemption for imports from China and Hong Kong, which ended on May 2, has also contributed to falling volumes and excess air freight capacity.

As a result, shippers are cancelling block space agreements and charters, leading to an estimated $22 billion revenue loss for the air cargo sector over the next three years. To accommodate the changes, carriers are redeploying capacity to alternative routes, including Southeast Asia to the US. While routes aren't changing completely, capacity is shifting as demand fluctuates. Cargo volumes have seen an uptick since the 90-day pause on tariffs was announced, helping to stabilise previously low rates and fill some of the excess airfreight capacity out of China.

Air freight rates from China to North America have dropped 7% week over week to $5.14 per kilogram, according to Freightos. Rates are at their lowest level since March. Shippers are looking to mitigate tariff impacts by moving production away from China and exploring alternative countries of origin. Geodis has seen clients shift production out of China into Southeast Asian countries or India, with some notifying the company that up to half of their current shipments from China will start shipping from other countries.

The ongoing uncertainty surrounding trade regulations is making it challenging for shippers to forecast the next few months. Many are taking a "wait and see" approach, cancelling orders from China and relying on safety stock. However, this approach may not be sustainable in the long term. As shippers continue to navigate the complex and ever-changing trade landscape, it's clear that the air cargo industry will need to adapt quickly to stay ahead of the curve.

Sea:

  • Over the last two weeks China/East Asia to North America West Coast spot rates have increased by 12.4% from $2,461/FEU to $2,7671/FEU according to Freightos data.
  • China/East Asia to North America East Coast spot rates have risen over the last two weeks, increasing by 13.04% to $3,519/FEU.
  • Global container spot prices have risen over the last two weeks, and are now sitting at $2,230/FEU, a 6.6% increase over the last two weeks and a 44.1% decrease from spot rates this time in 2024 according to the Freightos Baltic Index (FBX)
Sea:

Air:

  • Global Air Freight spot rates currently sit at $2.38, as rates continue to fluctuate according to the Freightos Air Freight Index (FAX)
  • Europe to Northern America spot rates currently sit at $1.82 (100-3000kg), says FAX, decreasing by 3.1%
  • Europe to Asia, Greater China spot rates currently sit at $1.17 (100-3000kg), says FAX, increasing by 0.86%
Air:

That’s all for this week’s update…

Check out our other insights and articles for more in depth industry news and trending topics, or get in contact to discuss some of our best in class freight forwarding services!

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