AIR CARGO FACES SLOW START TO 2025

AIR CARGO FACES SLOW START TO 2025 BUT FEARS OVER TRADE WAR IMPACT ‘PREMATURE’ – XENETA

February 5, 2025

Global air cargo demand came lower than expected in January, posting a growth of only 2% year-on-year, according to a new Xeneta analysis, but brewing fears over recent tariff announcements affecting volumes and growth forecasts for the year may be premature.

The drop in demand for January was a “surprise,” said Niall van de Wouw, chief airfreight officer at Xeneta, amid double-digit monthly growth throughout 2024. However, he pointed out that January’s data was impacted by the earlier Lunar New Year reducing volumes out of China.

However, van de Wouw sees “no immediate reason” to change Xeneta’s 4-6% growth forecast for global air cargo in 2025 despite the market’s nervousness over new tariffs introduced by the United States – particularly on China -and their subsequent retaliation.

“The lower growth in air cargo demand in January was not down to President Trump, nor, entirely, the earlier Lunar New Year. It also compares to an unusually high comparison in January 2024,” van de Wouw said.

“Nonetheless, the air cargo market in entering a period of uncertainty, which makes planning extremely challenging.”

van de Wouw noted that the implementation of tariffs by the U.S. — announced earlier this month — and the responses of China, Canada, and Mexico are just the start of a negotiation.

“It’s all transactional. We could end up in a global trade war, but in the case of President Trump, we have someone who’s ready to negotiate everything, and the rest of the world can influence the outcome, as we have already seen. The consistency here is he’s looking for a deal,” he added.

“We don’t know what will happen, but we do understand that uncertainty is not good for trade confidence, and it doesn’t help investment. People like to see some kind of stability before they put their money down,” he added.

van de Wouw then cautioned shippers from “rushing to make too many plans or take any drastic measures.”

“I’d have my team ready to do things differently, but I’d wait to see what actually happens because, right now, there’s a lot of sabre rattling and noise but little clarity,” he said.