Air cargo shippers displayed a pronounced shift toward short-term market tactics as 2025 concluded. According to a Xeneta report, nearly half of all forwarder volumes were purchased on the spot market in the fourth quarter. This behavior highlights a strategic pivot away from long-term commitments. Simultaneously, the share of new one-year contracts fell to just 24%, a drop of 20 percentage points from the previous quarter. This trend indicates that air cargo shippers preferred flexibility over locked-in rates during the volatile peak season.
The average global air cargo spot rate continued its descent, falling 4% year-over-year to $2.83 per kilogram in December. Despite this decline, overall air cargo demand grew, with volumes up 6% in December. This pushed full-year 2025 demand growth to 4% in chargeable weight. The dichotomy between falling rates and rising volumes suggests shippers are capitalizing on lower costs while opting for speed and reliability. The market is balancing increased capacity and geopolitical uncertainty, leading air cargo shippers to adopt a cautious, short-term approach.
Market Dynamics: Falling Rates and Rising Volumes
Spot rates have been on a downward trajectory, reflecting increased available capacity. Key trade lanes saw significant year-over-year decreases. Rates from Southeast Asia to North America fell 6% to $5.87 per kilogram. Similarly, rates from Northeast Asia to North America dropped 6% to $5.15 per kilogram. However, the pace of decline showed signs of slowing in December, potentially indicating a market stabilization, though not a reversal.
Despite lower rates, demand for air cargo grew. The global dynamic load factor, measuring volume against capacity, rose one percentage point year-over-year to 63% in December. This growth stems partly from shippers diverting some freight from ocean to air for speed and reliability. Niall van de Wouw, Xeneta’s Chief Airfreight Officer, noted that market volatility, spurred by U.S. trade policy shifts, unexpectedly helped the industry by creating demand for agile transport solutions.
The Contracting Shift: Avoiding Long-Term Commitments
The most striking trend is the dramatic drop in one-year contracts. Falling from 44% in Q3 to 24% in Q4, this decline reveals shipper sentiment. Buyers actively avoided locking in rates, betting that market conditions would remain favorable or improve. This short-termism is a direct response to the uncertain trade landscape. However, the share of one-year contracts was still eight percentage points higher than in Q4 2024, showing some residual year-on-year normalization.
The big question for 2026 is whether longer-term contracts will regain popularity. Xeneta suggests this depends on the balance of supply and demand. If capacity continues to outstrip demand, shippers may feel little pressure to secure long-term agreements. They could maintain their spot-market focus to chase the lowest possible rates. This dynamic puts pressure on carriers and forwarders to offer compelling terms to secure longer-lasting customer commitments.
Key Drivers: E-Commerce, AI, and Geopolitics
Several factors influenced the 2025 air cargo market. Growth in artificial intelligence development supported flows of high-value goods, a positive tailwind. Conversely, Chinese cross-border e-commerce exports showed signs of flattening, creating concern. Van de Wouw noted that if this trend continues for a third month, it would signal a significant shift. Policy changes creating a “more regulated landscape” and falling consumer purchasing power could further dampen e-commerce air freight volumes.
Geopolitical tension and trade policy uncertainty have become persistent market features. Ironically, this volatility has benefited air cargo by highlighting its speed and reliability advantages during disruptions. The end of the U.S. de minimis exemption for small e-commerce parcels and shifting ocean freight patterns also drove some demand toward air solutions. For air cargo shippers, navigating this unpredictability has made flexible, short-term planning the most rational strategy.
Outlook for 2026: Cautious Growth and Shipper Advantage
Xeneta predicts a more modest 2% to 3% increase in air cargo volumes for 2026. This cautious outlook reflects concerns over e-commerce, consumer spending, and ongoing trade ambiguities. Van de Wouw expects market fundamentals to trend downward, with shippers likely to seek better rates. He also warned that demand could deteriorate in the first quarter. However, he acknowledged that a sudden crisis could, once again, unexpectedly buoy the industry.
For air cargo shippers, the immediate future appears to favor the buyer. With capacity ample and rates softening, negotiating power lies with those who ship. The prevailing short-term contracting behavior may persist as shippers exploit this advantage. The industry now watches for signals that might compel a return to longer-term agreements, such as a capacity crunch or a surge in demand. Until then, flexibility remains the watchword for air cargo procurement strategies.