It is a challenging time for supply chain decision-makers and managers in the US. The introduction of tariffs on a wide range of goods from markets across the globe has ramped up volatility, especially as many of the deadlines for these tariffs change regularly.
According to Jack Burt, Senior Vice President of Cargo at Chapman Freeborn USA, the industry is experiencing significant shifts. “The net impact of tariffs on air cargo market demand is likely to be negative, as high tariffs could lead to a reduction in international trade volume,” Burt explains. “Yet air freight has witnessed a surge in recent months with some industry sectors as supply chain managers scramble to move commodities before tariff deadlines kick in.”
According to Xeneta, air freight levels were up 5% in July. In times of volatility like this, air cargo charters are at the leading edge of the industry as they provide premium express deliveries. While tariff uncertainty continues – with higher US-China tariffs postponed for another 90 days – air charter cargos offer supply chain managers a viable option for expediting deliveries and navigating the current complexities in global trade.
Unprecedented volatility due to US tariffs on global partners
On August 12, China and the US agreed to extend a truce in their ongoing tariff war, with the imposition of much higher tariffs between the world’s two largest economies pushed back until November 10. While this news is certainly welcome, it extends a period of unprecedented chaos and volatility for US supply chain managers, with no end in sight.
Whether it is deliveries of raw materials, refined machinery, or produced goods, supply chain decision-makers have limited visibility in terms of the tariffs that could occur for global purchases. This makes it very hard to make decisions on how to spend capital for a corporation in a smart manner without incurring tariffs.
Air cargo charters: A premium option for expedited delivery
“It is the arrival date of a shipment in the US, rather than the date of purchase, that matters,” notes Burt. “For this reason, expediting delivery becomes an important tool in supply chain management. This explains the 5% increase in air cargo witnessed in July.”
He continues, “Air cargo charter is at the leading edge of expedited delivery. As a result, when the market shifts or there is any kind of imbalance between supply and demand, it is typical to see a jump in air cargo charters, which is what has occurred in recent months.”
Standard road, ocean or rail delivery may not be fast enough to navigate these changes, and therefore air freight becomes the preferred option, with regional cargo charter addressing the premium end of the market.
“At present, there has been ample capacity for air charter brokers to handle the current increase in load factor resulting from tariff uncertainty,” Burt observes. “Because globally demand is down, partially as a result of lower trade levels caused by tariffs, aircraft and crews are available so air charter brokers can successfully match supply with demand.”
Of course, this can change quickly, and certain regions are more challenging. For example, Vietnam and Southeast Asia more generally have less available capacity to meet demand. And naturally, the cheapest air freight capacity is snapped up first. For speciality aircraft, such as heavy lift craft, there is limited capacity, but this is not related to tariffs; there is simply a limited number of these aircraft.
Typical commodities shipped using air cargo charters
A diverse range of products is being transported using air cargo charters. This is partly because the landscape of which products from which countries are affected by tariffs is continually changing. Tariff rates are unique to individual countries, and each country has a list of specific commodities that are included or exempted.
“This causes a lot of confusion and also means that products of all sizes and types might be air freighted, everything from textiles to industrial machinery,” says Burt. “High-end electronics and computer servers have been one common area for this service. Prior to tariffs in Europe kicking in, expedited delivery on servers used for cryptocurrency mining was popular. Another common commodity type is industrial machinery that needs delivery prior to tariff rates kicking in.”
Air charter brokers use agility and a global network
Burt emphasises the adaptability of his organisation: “In the case of Chapman Freeborn, there has been no need to hire additional staff to cover the uptick in demand. That is because, as an air cargo broker, we’re already set up to respond rapidly to emergencies or urgent requests.”
He explains further, “Our services include humanitarian and disaster relief flights, which are coordinated in a matter of hours. These services depend on a widespread global network of partners. Therefore, increases in demand caused by trade limitations like tariffs can be managed without the need to hire additional staff.”
Naturally, it is important to remain nimble and adaptable in order to respond to ever-changing economic realities.
“It is worth noting that retainer services are also a potential option for supply chain managers,” Burt adds. “In this case, a full consultation is provided to put together a tailored plan, which means products can be transported as and when needed. However, even without such a retainer, organising air cargo shipments within 48 hours is entirely possible.”
The coming months for tariffs and air cargo charters
Looking ahead, Burt provides his assessment: “The current levels of disruption and uncertainty caused by tariffs show little sign of easing in the coming months. The postponement of higher US-China tariffs will likely result in another push in terms of demand for air cargo charters.”
Supply chain decision-makers will likely wish to ensure essential goods reach the US prior to higher tariff levels being imposed. More generally, we can expect a decline in air cargo as international trade slows. Capital decision makers may also choose to wait for things to settle.
“What is clear is that, despite the current volatility, experienced cargo charter brokers have the network, know-how and team to provide expedited deliveries as and when supply chain managers need them,” Burt concludes.
