A cooling world economy will likely slow air cargo market growth over the next six months as rates rise further, according to Xeneta’s Air Freight Outlook Update published in July.
After starting the year generally stabilized despite geopolitical conflicts and shifting U.S. trade policies, air cargo sector was thrown a curveball in February with the start of the Iran war. Despite the war’s more regionalized cargo impact, 12% of global capacity was removed “overnight,” per Xeneta. Market demand swung as a result, falling 3% in March before recovering in April through June.
Meanwhile, a blockade of shipments through the Strait of Hormuz — a critical waterway for global oil — drove fuel volatility and higher costs. However, fuel prices have begun to ease even as they remain at higher than usual levels, according to the International Air Transport Association.
With the Iran war continuing, ocean reliability remains low, keeping air cargo volumes from shifting back to maritime, further boosting activity as ocean shippers began to pull forward inventory, spurring higher rates for the mode. However, elevated inventories due to frontloading may leave less to ship, possibly dampening Q4 peak season air cargo demand, Xeneta reported.
Here is a mid-year look at three key factors that will shape the air cargo sector in the back half of 2026.
1. Global demand and capacity poised to slow
Although global air cargo demand rose 4% year over year at the end of June, up from Xeneta forecasts for 2% to 3% growth from earlier in the year, a slowing global economy could eventually dampen growth on different corridors. Now, Xeneta sees demand growth for the full year to be toward the higher end of its original forecast.
On the capacity side, Xeneta anticipates growth toward the lower end of the 2% to 3% range, a decline from its forecast earlier in the year. In turn, demand may keep pace or even surpass capacity.
“Shippers should — how should I say this — not expect a huge price cut in air freight services anytime soon.”
Tom Crabtree
Managing Director at Transport Research Advisory
This phenomenon has already started to occur. For instance, on a corridor level, Asia-Pacific carriers saw a 4.3% year-over-year increase in capacity in June as demand rose 7.9%, IATA reported. Meanwhile, carriers based in North America saw capacity increase by 6.2% YoY in June, while demand was up 13.1% YoY, per IATA.
Compounding the issue, aircraft manufacturers Boeing and Airbus’ supply chains have still yet to fully recover since the COVID-19 pandemic, Tom Crabtree, managing director at Transport Research Advisory, told Supply Chain Dive. So far, in the first six months of the year, Boeing and Airbus have built about 75 widebody passenger aircraft combined — only a six-unit improvement compared to the first six months of 2025. Failure by the two manufacturers to produce enough widebody airplanes, which move roughly 40% of air cargo, would force the global freighter fleet to continue working overtime, Crabtree said.
“Shippers should — how should I say this — not expect a huge price cut in air freight services anytime soon,” Crabtree added.
2. Shipper rates set to rise
At the start of the year, Xeneta initially forecast air cargo rates to drop by up to 10%, but the firm now expects rates to increase 5% to 15% year over year.
Ripple effects of the Iran war are a primary driver, as the conflict has not only created network and fuel volatility, but it also has impacted long-term contracting, leaving forwarders to secure space or negotiate prices on the spot market, per Xeneta.
In Q2 of this year, forwarders were procuring nearly 50% of air freight volumes on the spot market. During that same quarter, the share of newly-agreed shipper-forwarder contracts valid for up to three months increased to 58%, up from 22% the prior year. Many companies are holding off negotiating 2026 contracts until conditions stabilize, according to Xeneta.
Since the end of February, air freight rates have increased due to fluctuating jet fuel prices and high demand, Crabtree said. At one point, air freight prices were up 38% year over year, he added, noting they have eased since the beginning of July.
“So, if you're a shipper, these are swings that are really hard to work around,” Crabtree said.
Xeneta confirmed that spot rates appear to be following a downward trend following a late-May mini peak season, which could be further aided by a cooldown of hostilities in Iran.
“As the conflict eases, capacity around the Gulf air cargo hubs would recover fully and jet fuel prices fall back, both of which point to further spot rate declines,” according to Xeneta.
3. AI remains air cargo’s strongest growth engine
Artificial intelligence hardware and semiconductor demand have seen “exceptional growth” for the air cargo sector, becoming the clearest driver of Transpacific strength, per Xeneta. High-value, time-sensitive AI hardware and semiconductor shipments are expected to continue being the largest growth engine beyond 2026.
Supply chains have already begun to adapt to accommodate demand. DHL Global Forwarding, for instance, recently launched a thrice-weekly widebody Transpacific service between Bangkok (BKK) and Cincinnati (CVG), citing the technology sector as the main driver for the extra capacity.
Reinforcing the trend, in April, World Semiconductor Trade Statistics reported that global semiconductor sales for the month were up nearly 94% year over year. Meanwhile, Taiwan — a major chip manufacturing hub — saw GDP growth of about 15% in Q1 2026, per a press release. At the time, Taiwan export value was forecast to grow by nearly 20% in 2026.
However, AI-related cargo accounts for less than 10% of volumes, emphasizing that the impact is specific to select corridors, not global headline figures, per Xeneta.
On a broader level, June air cargo demand saw a significant 7% year-over-year boost from AI-related shipments, Xeneta reported. The increase offset weakened China-U.S. e-commerce traffic due to U.S. tariffs, which was air cargo’s main demand engine for the past two to three years.
Despite AI investments showing “little signs of fading,” the tables could still turn, Xeneta warned, noting that a burst in the AI investment bubble would have systemic ripple effects.
