The last few years have seen an upsurge in resilient trade and manufacturing, bolstered by reliable air freight shipping and a booming ecommerce sector. The era of online retail is in full swing—and there’s no turning back.

Let’s take a closer look at the numbers. This year, global air cargo volumes exceeded 2019 levels, with a 13-15% increase in cargo tonne-kilometers (CTKs). And in 2023, the global air market reached a staggering $303.8 billion—a figure that could hit $481.2 billion by 2032. As key market drivers continue to evolve, the landscape is shifting in ways that will impact businesses worldwide.

Understanding what’s shaping this sector is crucial for ecommerce shippers that rely on air freight to remain competitive and resilient. As we look ahead into 2025, the air freight industry stands at a pivotal moment, transitioning from pandemic-fueled growth to a period of stabilization.
Here are the top five considerations for the air market in 2025—and how you can best prepare for the changes ahead.

1. Economic Conditions and Regional Variances

The air freight market is closely tied to global GDP. The International Monetary Fund (IMF) predicts that the global economy will grow by 3.2% in 2024 and 2025—consistent with growth in 2023. Five years from now, however, the IMF forecasts a 3.1% growth rate—the lowest in decades.

Growth prospects also vary by region. Currently, the U.S. is experiencing moderate growth, China is facing economic challenges, and Europe is seeing a decline.

2. Capacity and Demand Imbalance

Current market trends show that demand for air cargo is outpacing supply in all regions, particularly on the Transpacific Eastbound (TPEB) and Far East Westbound (FEWB) trade lanes. According to Thomas Kempf, Senior Director of Global Air Freight at Flexport, key regions to monitor include China, the Indian subcontinent, the Middle East, and Vietnam. The Atlantic market is expected to remain stable next year, although we may see imbalanced demand growth due to stronger economic indicators in the U.S. compared to the EU.

Additionally, Kempf noted that capacity imbalances could be intensified by the retirement of older freighters, delays in new freighter deliveries, airlines focusing on passenger routes (which offer limited belly cargo space), and freight operators shifting capacity from the U.S. to Asia. As a result, pricing pressure is expected to persist in 2025, as capacity remains close to flat.

3. Geopolitical Tensions and Strikes

While fuel prices have remained relatively low due to weaker demand from China and increased U.S. crude oil production, volatility remains a concern. The Red Sea crisis and other geopolitical disruptions continue to affect air freight pricing, causing backlogs and rate spikes in the Middle East and South Asia. Geopolitical tensions in key oil-producing regions, such as Saudi Arabia and Russia, could lead to sudden price spikes, warned Kempf.

To mitigate fuel price risks, he advises air freight businesses to build flexibility into their pricing models and consider hedging strategies.

Labor negotiations, too, may disrupt an already-congested air market. Of particular note is the potential International Longshoremen’s Association (ILA) strike, which would affect ocean container ports on the U.S. East Coast and Gulf Coast—including some of the busiest ports in North America.

In response to previous labor negotiations at U.S. container ports, “many shippers shifted goods from ocean to air, [which] resulted in rate spikes and capacity shortages, especially for urgent shipments,” Kempf told Sourcing Journal. “The lesson we could learn is that [strikes] usually slow down and stop those shipments at major ports.”

4. U.S. and European Legislation

The September 13 executive action—which would deny de minimis treatment for all U.S. imports covered by Section 301, 201, and 232 tariffs—may be implemented as soon as Black Friday this year. The proposed changes could impact a number of ecommerce businesses, including large Chinese players.

Exactly how the executive action will play out remains to be seen. In general, the proposed changes will likely influence the competitiveness of smaller goods in air freight shipping.

Kempf also pointed out that the European Green Deal—which aims to achieve a climate-neutral EU by cutting airline emissions by 55%, among other major measures—will affect the competitiveness of European airlines.

• To achieve that goal, Europe would need to leverage sustainable aviation fuel (SAF), 90% of which is currently produced in the U.S. However, the process of importing U.S.-produced SAF involves its own transportation emissions.
• “The target of cutting greenhouse gas emissions by 55% based on 1990 base levels is the strictest legislation passed in any part of the world,” Kempf said. “That is huge. That is not seen anywhere else.”

5. New Growth and Shifts in Ecommerce

Having more than doubled since 2018, the ecommerce industry continues to drive significant demand for air freight. According to a report from the International Trade Administration, the global B2B ecommerce market is expected to be valued at $36 trillion by 2026, 80% of which will be concentrated in Asian-Pacific (APAC) markets. Meanwhile, smaller markets—including Latin America and the Middle East—have the potential to fuel the most growth over time.

• To put that growth into perspective, the ecommerce sector now requires the equivalent of one hundred 777 Freighters daily for shipments from China to the U.S alone, according to Boeing.

(Source: Trade.gov)

Additionally, we expect to see stabilization and optimization across ecommerce air freight strategies. Specifically, for ecommerce businesses largely dependent on the air market, we anticipate a shift from 90% air freight shipping to a model driven by 60% direct fulfillment and 40% forward stock. Though ecommerce shipping volumes will continue to grow, we might see stabilization at around 25-30% of air volume—down from today’s 50-60%.

Another trend worth noting: consumer preferences have shifted toward smaller, more niche brands, often promoted through platforms like TikTok. According to Kempf, this trend extends to both younger and older demographics, including baby boomers.

How You Can Prepare for Next Year and Beyond:

• Place bookings with your logistics service provider as close as possible to the cargo ready date to support advanced capacity planning and ensure timely capacity accessibility.
• Stay on top of market trends and conduct scenario planning accordingly.
• To mitigate the risk of price increases, work closely with your suppliers and partners to steer your planned air freight flow. Fixed collection days and timely updates can ease planning for all stakeholders.
• Work with partners who have up-to-date expertise on the market, and that directly operate air capacity from the APAC region.

As we plan for 2025 and beyond, air freight will remain a crucial element of global supply chains. However, uncertainties persist, particularly around potential regulatory changes. Staying ahead of these trends will enable companies to navigate the complexities of the air freight market and maintain a competitive edge.

Contact Flexport to learn more about how you can better prepare for these changes.