October saw the seventh consecutive month of year-on-year growth in global air cargo volumes since the -3% dip in March after the escalation of the Middle East conflict closed Gulf airspace, but any hope of a further peak season boost appears to be diminishing, according to the latest market data from Xeneta.
Demand increased +6% year-on-year in October, but market conditions showed few signs of a sudden increase in capacity pressure, a surge in rates above the levels already seen across the year, or freight charter prices ‘hitting the roof’ that would signal a late peak in volumes, says Xeneta’s Chief Airfreight Officer, Niall van de Wouw.
“The market is continuing its steady pace of growth, as we’ve been reporting since March. It’s strong, but it’s not a ‘peak’ season, and time is quickly running out for volumes to shift higher. I am already seeing Christmas trees and listening to Mariah Carey and Wham! as I travel through airport terminals,” he said.
Global air cargo spot rates (valid for up to one month) averaged USD 3.11 per kg in October, +29% higher than the same month a year ago. Year-on-year spot rate growth has now widened for two consecutive months, after narrowing from June to August. Spot rates rose +4% month-on-month as the market eased it ways into the fourth quarter.
Rates continued to be influenced by flat capacity growth year-on-year in October, after a rise of +2% in September. With volumes still outpacing supply, Xeneta’s dynamic load factor – its measurement of capacity utilisation based on the volume and weight of cargo flown alongside available capacity – rose two percentage points year-on-year to 63%.
Transatlantic and transpacific rates firm in October
As anticipated, spot rates rose month-on-month on all 10 of the selected global corridors in Xeneta’s monthly analysis. The largest increase was on the transatlantic westbound corridor, where Europe to North America spot rates rose +10% to USD 2.31 per kg as airlines shifted to their winter schedules. Tighter capacity on this corridor is consequently pushing up airline rates being quoted to forwarders in recent tenders.
On the transpacific, AI-related shipments continue to underpin demand. Chargeable weight from Asia Pacific to North America was around +15% higher year-on-year in October, with freighter capacity on the corridor on a similar growth path, according to Rotate. Southeast Asia to North America spot rates rose +3% month-on-month to USD 6.34 per kg, with Northeast Asia to North America up +4% to USD 6.21 per kg.
Backhaul corridors firmed between +1% and +3% month-on-month, including North America to Europe, up +3% to USD 1.15 per kg.
Question marks over Asia–Europe growth
Rates from Asia to Europe also rose in October, with Northeast Asia to Europe up +4% month-on-month to USD 4.97 per kg and Southeast Asia to Europe up +3% to USD 4.35 per kg. But the corridor faces question marks over its growth prospects, van de Wouw added.
E-commerce volumes, which filled many Asia–Europe freighters in recent years, continue to fall. China’s low-value and e-commerce exports to the EU were -61% lower year-on-year in the third quarter, after the EU’s €3 per item customs duty took effect on 1 July, according to Xeneta and Trade and Transport Group analysis of China Customs data. Exports to Europe as a whole fell by less, -29%, as exports to Russia more than tripled. An additional €2 handling fee per item imposed by the EU, which applies from 1 November, will add further downward pressure. Although, with the flow of e-commerce volumes already more than halved, Xeneta expects the new fee to add only a modest further drag.
Freighter capacity has also moved. Direct freighter capacity between Asia and Europe fell again in October, on top of the capacity lost on routings via the Middle East. In October, China to Europe spot rates were +6% higher year-on-year, against +38% on China to North America.
Europe is also seeing less of the AI-related cargo that is lifting the transpacific market. Europe accounts for about one-tenth of AI-related goods trade, compared with more than a third of all goods trade, according to the World Trade Organisation (WTO).
Red Sea return will shift some cargo back to ocean
The second question mark is on the water. Scheduled container shipping capacity crossing the Red Sea reached around half of its pre-crisis level in October, according to Xeneta ocean data. Just over half of Asia–Europe capacity is now routed via the Suez Canal in at least one direction, with around a third sailing through both ways.
Xeneta analysis of Eurostat data shows how air freight’s share of Asia–Europe trade has moved with ocean schedule reliability. Air’s share of EU import tonnage from Asia rose from 1.1% in 2023 to 1.7% in 2024, at the height of the Red Sea crisis, as ocean freight schedule reliability from the Far East to North Europe fell from 28% to 9.3%. When reliability recovered to 20% in 2025, air’s share fell back to 1.2%. In the first eight months of 2026, it edged up to 1.3%, after the closure of the Strait of Hormuz in February led carriers to shelve their planned return to the Suez Canal.
The latest Eurostat data runs to August, so it does not yet reflect the autumn return of services to the Red Sea. Ocean schedule reliability from the Far East to North Europe remains low, at around 10% in October.
Xeneta expects cargo that moved to air for reliability rather than speed to start returning to ocean once schedule reliability shows a sustained recovery, most likely from the second quarter of 2027. Until then, air will likely keep the cargo it has. Xeneta will explore this further in its 2027 Air Freight Outlook, to be published in the coming weeks.
“Things will happen”
Looking ahead, Xeneta’s baseline for 2027 is for air freight rates to decline overall.
Many shippers avoid negotiating in the busy fourth quarter and are starting tender processes to conclude in the first or second quarter of 2027. But there is still little common ground on long-term deals.
“Forwarders can, of course, offer shippers 12-month deals but, given the market conditions, they would have to bake in so much uncertainty that the price becomes uncompetitive. In the past couple of years, it has not been the level of demand that caused the uptick in rates; it has been the availability of capacity. If the Middle East situation recovers, there will be a rebalancing of demand and supply, and rates will then become lower. But things will happen. We don’t know what or where, but this is the lesson the market has learned. We can’t call these ‘Black Swan’ events anymore because they are too frequent. This makes contract negotiations challenging for everyone,” van de Wouw said.
