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Air freight faces capacity challenges and rate volatility
Asia
Extension of lower tariffs on Chinese goods provides stability
The United States and China have extended their tariff truce through November 10, 2025, providing temporary stability for air cargo flows between the two largest economies. However, with U.S. tariffs on goods from China still substantial and heavy frontloading having occurred in June and July, shipping volumes remain well below historical peak-season levels. Many shippers completed their inventory builds during the earlier surge, leaving carriers with excess capacity positioned for September demand that has not materialized.
This means cargo space is easier to secure, with booking lead times returning to normal levels after the short-notice, high-demand environment seen earlier in the summer.
While space availability has improved, demand uncertainty means carriers may adjust rates or flight schedules with short notice as they balance capacity against actual cargo volumes. Shippers should book space early for time-sensitive cargo and maintain flexibility for shifting capacity patterns, particularly as carriers fine-tune their September schedules based on actual demand materialization.
Taiwan emerges as critical capacity constraint
Taiwan has become one of the most capacity-constrained origins in global air freight, as unprecedented demand for artificial intelligence (AI) hardware and semiconductor equipment pushes both production facilities and logistics networks to their limits. Technology manufacturers, data center operators, and consumer electronics brands are placing orders ahead of anticipated product launches and potential sector-specific tariffs, creating intense competition for outbound air cargo space to North America and Europe.
Booking lead times from Taiwan extend well beyond normal seasonal averages. Lead times from Taiwan are stretching to two to three weeks for confirmed space allocation, significantly longer than the typical five to seven days for Asian origins. Spot market availability is scarce, and when space becomes available, it often requires premium pricing.
The capacity scramble is further complicated by tight connection windows through major Asian transit hubs, where increased Taiwan-origin volumes compete for limited feeder flights and onward long-haul connections.
Shippers in the technology, semiconductor, and high-value electronics sectors should secure space allocations three to four weeks before production completion to avoid delivery delays. Building flexibility into transit times, exploring alternative routings through secondary gateways like Osaka (Japan) and Seoul (South Korea), and budgeting for premium service levels will help mitigate risks of missed delivery commitments during this high-demand cycle that is expected to continue through Q4 2025.
New product season faces headwinds
September typically marks the peak of new product introduction season, when major global brands accelerate shipments of electronics, consumer goods, and seasonal merchandise ahead of holiday sales. This traditionally creates a strong and predictable demand surge in Asia–U.S. and Asia–Europe air cargo markets.
This year presents a less certain outlook. While some brands proceed with planned product launches, weaker U.S. consumer sentiment—driven partly by higher retail prices linked to recent tariff measures—is creating hesitation in certain product categories. Many shippers are adopting more conservative inventory positioning strategies, waiting to gauge consumer response to early-season releases before committing to large replenishment orders.
For Asian exporters, the implications are twofold. First, with no strong September demand surge materializing, carriers may have more capacity available in the near term. This added space could relieve some of the upward pressure on spot rates. Second, the unpredictability of order volumes means that sudden retail success could trigger a sharp but temporary scramble for air cargo space later in Q3 or early Q4.
Shippers launching new products should consider dual booking strategies: secure core capacity blocks for committed volumes while keeping contingency options available for expedited shipments if demand exceeds initial forecasts.
Quarter-end dynamics create scheduling uncertainty
Carriers are adjusting schedules and capacity allocations to match evolving demand patterns. Many airlines are concerned about adding space that may not be utilized if demand projections prove optimistic, so they are adopting cautious approaches rather than committing to significant capacity increases for the traditional late-September shipping rush.
While overall capacity appears sufficient, short notice changes in flight schedules or aircraft assignments could quickly reduce available space on key routes. These operational adjustments often trigger spot-rate volatility, with peak-season surcharges applied when demand spikes unexpectedly occur.
Shippers should secure confirmed bookings 7-10 days in advance of required departure dates and develop flexible transit plans. Those with time-sensitive or high-value shipments should prepare for potential premium pricing to guarantee space allocation, particularly on high-demand lanes to North America and Europe.
Close monitoring of market developments will be crucial, as late-quarter production surges, tariff-related shipping accelerations, or geopolitical events could quickly tighten capacity and drive significant rate increases with limited advance notice.
Rate outlook shows moderate increases with volatility risk
Air freight rates across Asian origins are displaying moderate upward movement as September begins, but how sustainable that will be remains uncertain. Current rate strength stems from seasonal shipping patterns, quarter-end activity, and lingering effects from earlier frontloading cycles. If underlying demand fails to meet carrier expectations, pricing may adjust downward to maintain aircraft utilization levels.
For shippers, this creates a mixed planning environment. Those locking in space now may be paying slightly more than August levels, but rates could soften if the anticipated demand fails to materialize in late September. Conversely, sudden order surges, whether from delayed product launches, tariff-related rushes, or geopolitical disruptions, could push spot pricing higher, especially for premium services and capacity-constrained lanes.
The most effective approach combines securing early allocation for critical shipments, while maintaining booking flexibility for non-urgent cargo to capitalize on potential mid-month rate opportunities.
North America
Export capacity shortage to South America intensifies
The U.S. export air freight market shows stark regional differences, with generally stable conditions to most global destinations contrasting sharply with severe capacity constraints affecting shipments to South America. This disparity is creating significant operational challenges for U.S. exporters and requiring strategic adjustments through the remainder of 2025.
Strong demand without corresponding capacity additions is driving acute space shortages for shipments to Argentina, Brazil, Chile, and Colombia. Airlines serving these routes have not increased freighter services or belly capacity to match cargo demand, creating a fundamental supply-demand imbalance that extends booking lead times to 10 to 14 days and reduces service reliability.
Ecommerce transshipping through Miami International Airport (MIA) is intensifying this congestion. The growth of online retail between North America and South America has created sustained demand for cargo space on flights through Miami, which serves as a primary gateway for southbound shipments. The smaller package sizes typical of ecommerce shipments consume cargo space that might otherwise accommodate traditional commercial shipments, intensifying competition for capacity.
Infrastructure limits are worsening the situation. Ground-handling crews sometimes cannot process cargo quickly enough to meet flight schedules. Delayed U.S. Customs processing extends dwell time for international cargo at the airport, while terminal congestion prevents efficient cargo movement between connecting flights. These bottlenecks mean that even when aircraft have available space, cargo might not be processed and loaded efficiently—reducing usable capacity for shippers.
U.S. exporters should book flights two to three weeks in advance for South American destinations and establish contingency plans for time-sensitive shipments, since flexible, short-notice booking options are no longer reliable. Lead times for securing confirmed space can exceed 10 days, with some routes experiencing delays that may stretch beyond two weeks during peak periods in October and November.
Europe
Summer capacity stabilizes market conditions
European air freight markets are benefiting from summer passenger flight schedules, which have returned additional capacity to key trade lanes and improved space availability, particularly to southern European destinations. This seasonal capacity increase provides shippers with better booking options and competitive pricing.
Globally, belly capacity growth remains flat, with certain regions constrained due to geopolitical events and trade policy factors. European shippers should maintain backup routing options rather than relying solely on spot market availability.
Capacity is expected to remain stable until winter schedule adjustments take effect in late October, giving shippers predictability for September and October planning.
Demand holds steady despite uncertainties
European air freight demand continues to show resilience despite ongoing challenging geopolitical conditions. The implementation of various tariff policies and trade restrictions has created uncertainty, yet European demand remains steady into September.
Shippers should remain cautious about potential demand disruptions from evolving trade policies that could create sudden capacity shortages.
Rate stability with spike potential
Rate levels remain stable across most European networks, providing cost predictability for regular cargo movements. However, tariff-related disruptions may expose sudden rate spikes, particularly for premium service levels and main deck capacity.
Schedule reliability stable
Airlines continue to maintain generally stable schedules, but high passenger travel demand could impact freight movement. In cases where airlines reconfigure aircraft or adjust flight schedules to serve passenger needs, belly space for cargo may be reduced or shifted to less favorable departure times.
South America
Brazilian trade disruptions reshape cargo flows
Brazil air freight markets are shifting as new U.S. tariff policies and regional trade tensions disrupt established shipping patterns. High U.S. import tariffs on a range of Brazilian goods, including agri-food products, steel, coffee, and citrus, are prompting many U.S. importers to postpone or cancel orders. This has led to a noticeable decline in Brazil–U.S. cargo volumes, with airlines adjusting by cutting flights or reducing cargo capacity on affected routes.
For shippers, this will mean more difficulty predicting when and where space will be available. Reduced demand may temporarily open capacity, but flight reductions can offset these gains, making the market less predictable overall. On the import side, Brazilian buyers are also slowing orders and exploring alternative sourcing, contributing to fluctuations in how full flights are with cargo on inbound flights.
Adding further complexity, Venezuela has reinstated tariffs of up to 77% on selected Brazilian imports. This is influencing trade flows across northern South America.
Shippers should evaluate alternative Brazilian airports to avoid service disruptions. At São Paulo Guarulhos International Airport (GRU), expect booking slot constraints and ground handling delays through September, creating roll-overs where cargo gets bumped to later flights.
Viracopos International Airport (VCP) offers faster clearance times for high-density cargo shipments. Recife/Guararapes–Gilberto Freyre International Airport (REC) provides direct connectivity to Europe through Azul's Porto service, operating through October, offering Northeast exporters an alternative to São Paulo area congestion.
Asia to South America cargo shifts create capacity pressure
Ecommerce shipments from China and Southeast Asia to South American destinations continue at elevated levels, creating booking delays. Shipments of electronics and consumer goods now require more than one-week advance booking to secure space on flights to South American markets, a significant increase from typical lead times of two to three days.
Red Sea disruptions will continue to divert ocean cargo to air routes serving South America. This mode shift particularly affects cargo bound for destinations including São Paulo (Brazil), Buenos Aires (Argentina), and Bogotá (Colombia) that relied on Asia-Europe-South America ocean routing, as these goods now compete for air cargo space on direct Asia-South America flights.
Continued congestion is expected at Middle Eastern hub airports. Airlines using Middle Eastern airports like Dubai and Abu Dhabi (United Arab Emirates), and Doha (Qatar) as connection points between Asia and South America are seeing increased cargo volumes as ocean freight diverts to air. This creates bottlenecks at these hub airports, extending transit times by two to three additional days and reducing space availability for cargo connecting to South American destinations.
South American importers should evaluate booking strategies. Companies regularly importing from Asian suppliers should secure space allocation rather than relying on spot market availability. Those requiring urgent shipments should expect premium pricing and potential delays.
Americas demand strong but volatile
Air freight demand from South America to the United States and Mexico remains strong, with booking lead times averaging 7–12 days. However, recent trade measures are creating volatility in cargo planning and rates. Shipments under 500 kilograms—especially when booked as general cargo—are moving more easily, as they can be slotted into available aircraft capacity on shorter notice. Larger or specialized shipments are facing more unpredictable timelines.
Spot rates are showing moderate increases, but heightened volatility is likely as carriers adjust pricing in real time to reflect shifts in demand and capacity allocation. Shippers should budget for rate increases during peak periods and plan with variability in mind, particularly for time-sensitive or seasonal cargo.
Capacity growth creates opportunities
Some capacity relief is on the horizon for Q4 2025. Gol Airlines is expanding its fleet with new Boeing 737 MAX aircraft, which should gradually increase regional and short-haul international lift beginning in October.
In addition, LATAM Airlines is expanding European service starting in September and continuing its focus on pharmaceutical and perishable cargo, offering shippers in these sectors a more reliable and specialized service option. While these developments won't immediately resolve broader capacity challenges, they create opportunities for shippers who can align with these carriers' strengths.