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Peak demand and tariff shifts define December air cargo
Published: Thursday, December 11, 2025 | 09:00 AM CDT
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Asia
Global trends
Following the late-October trade agreement between the United States and China, Trans-Pacific trade has resumed normal high season patterns. Elevated volumes are expected to continue through mid-December before easing in the second half of the month across most commodities. Cryptocurrency and artificial intelligence (AI)-related cargo will remain strong drivers into the United States, though volumes are expected to moderate slightly from November’s highs as warehouses reach capacity.
Early January 2026 is expected to bring a brief post-holiday softening before demand accelerates again in late January and early February as shippers move cargo ahead of Lunar New Year factory closures in mid-February. This creates a compressed window for shippers that need to move inventory before manufacturing shutdowns, historically resulting in capacity constraints and rate premiums.
Regional highlights
Asia to North America
Forecast: Demand is expected to remain elevated through mid-December, led by cryptocurrency and AI-related sectors. Volumes should soften in the second half of the month. Carriers are expected to gradually adjust network capacity in response to these shifts, which will affect space availability and booking windows.
Market dynamics: Stabilised U.S.-China trade conditions helped with network planning heading into year-end, allowing carriers to align capacity more precisely with anticipated demand. Despite strong contributions from cryptocurrency and AI deliveries—which require prioritised handling due to their time-sensitivity and value—broader demand is tapering. Retailers have completed inventory positioning and cargo volumes are usually reduced as consumer purchasing slows after the holidays and businesses wind down year-end operations.
Carriers are adjusting schedules and reallocating aircraft to optimise efficiency across their global operations, which reduces available buffer capacity on individual lanes. For shippers, this translates to less booking flexibility. A normal 24-48 hour booking window now requires four to five days of advance planning.
Asia to Europe
Forecast: High season conditions will hold through mid-December. Early January should bring brief stability before activity intensifies again heading into February.
Market dynamics: Capacity across major Asian export hubs remains tight as year-end demand holds, extending booking windows to four to five days for larger deliveries. Ecommerce and general cargo compete for limited space and shippers that delay bookings risk being rolled to later flights or facing premium rates. Rates are expected to stay at peak levels through the second week of December due to sustained demand and constrained capacity.
Carriers are balancing aircraft rotations and schedules across regions to manage this peak intensity. Early January typically sees a lull as consumer demand eases and inventory cycles reset, providing a brief window of relief. Late January and early February see a surge ahead of Lunar New Year as factories front-load production, tightening the delivery window and driving up rates.
Key takeaways
- Book four to five days in advance through mid-December to avoid flight rollovers that could delay deliveries.
- Leverage early January's softer market to clear lower-priority deliveries before Lunar New Year demand tightens capacity.
North America
Global trends
The U.S. air export market remains largely balanced heading into year-end, with supply and demand in relative alignment. The November grounding of MD-11 freighter aircraft temporarily removed some capacity from the market, creating short-term disruptions on specific routes where these aircraft operated. While affected carriers are sourcing additional aircraft to backfill the capacity, overall international cargo volumes have remained stable, with displaced deliveries absorbed by alternative carriers and routes.
Operations are expected to remain stable through mid-December, though the final one to two weeks of the month may see minor flight reductions as seasonal demand softens. This is a normal seasonal pattern as businesses wind down operations for the holidays. The flight reductions help carriers maintain efficient load factors—the percentage of available capacity that is utilised—rather than operating partially empty aircraft. For shippers, this means late December capacity, while reduced, should still be adequate for typical end-of-year volumes.
Key takeaways
- Secure space now for late-December deliveries, particularly oversized or high-volume freight requiring dedicated aircraft space.
Europe
Global trends
Winter passenger schedules are limiting belly capacity across European networks, tightening available space for Trans-Atlantic deliveries. Passenger airlines reduce flight frequencies during the winter months due to lower travel demand, eliminating significant cargo capacity since passenger aircraft typically carry freight in their lower deck compartments. This forces more cargo onto dedicated freighters, which must absorb the displaced volume.
Mixed economic signals heading into December will continue to create uncertainty in lane-specific demand. Some sectors, particularly ecommerce, electronics and pharmaceuticals, are expected to maintain strong delivery activity through the month, while other industries will likely experience softer volumes due to economic headwinds. This variability makes it challenging for carriers to forecast demand accurately, which may result in either overbooked flights on high-demand lanes or underutilised capacity on softer routes during the holiday period.
Compounding these dynamics, operational constraints and aircraft redeployments may further restrict allocations during December’s peak holiday period. Carriers are shifting freighters to serve multiple regions during their respective seasonal peaks and beginning to position aircraft ahead of Asia's pre-Lunar New Year surge in late January and February. This may reduce available lift on European lanes during late December and early January as this transition occurs.
Regional highlights
Europe to North America
Forecast: Mid-December is expected to mark the seasonal peak, with limited space available from European hubs. Early January should bring brief stabilisation before capacity tightens through mid-January as carriers reposition aircraft ahead of the pre-Lunar New Year surge.
Market dynamics: Demand is concentrated in ecommerce, electronics and pharmaceuticals, which are highly sensitive to schedule reliability due to their time-critical nature. Reduced belly capacity on winter passenger flights is shifting more cargo onto dedicated freighters, but available aircraft are limited and operational costs for extra flights are high. This creates competition for freighter space, resulting in longer booking lead times and potential rate premiums for last-minute deliveries.
Mid-December is expected to be the busiest period, as retailers push final holiday inventory to stock shelves before Christmas, tightening space on key Trans-Atlantic lanes. Early January brings brief relief as holiday volumes subside and passenger flight networks normalise, but stabilisation is short-lived. Returns (products being delivered back from retailers to distribution centres) and pre-Lunar New Year positioning (manufacturers beginning to stage components ahead of the Asian manufacturing surge) generate a secondary demand spike in mid-January. This will compress available capacity and increase competition for available space.
Key takeaways
- Book critical December deliveries now to secure mid-month allocations, particularly for time-sensitive cargo.
- Plan for continued elevated pricing through early January before conditions normalise.
South Asia, Middle East, Africa (SAMA)
Global trends
The Indian air cargo market is undergoing significant disruption following steep U.S. tariff increases. India’s exports to the U.S.—its largest destination—fell 37.5% from May to September, with major declines across key sectors: smartphone exports dropped 58%, engineering goods fell 16.7% year over year (y/y) in October and textiles and apparel also experienced substantial reductions. Even previously tariff-free categories—nearly one-third of India’s exports to the United States—fell 47% in the same period, demonstrating the broad impact beyond directly tariffed goods.
Despite these headwinds, underlying air cargo demand remains resilient. Projections call for 6-9% annual growth through 2029, driven by a structural shift toward air for high-value, time-sensitive goods. Pharmaceuticals, smartphones and other advanced technology products increasingly rely on air to navigate tariff uncertainty, global trade tensions and disruptions such as the Red Sea crisis that have eroded the reliability of ocean transport.
Infrastructure investments are also reshaping market potential. India now operates over 160 airports, supported by major policy programs including the National Logistics Policy, PM GatiShakti and Make in India. However, cargo handling is still heavily concentrated at six major hubs, creating bottlenecks during peak periods. New freighter operators like Pradhaan Air Express are adding alternative capacity and supporting network diversification.
Globally, November brought general rate increases (GRIs) heading into high season and the industry continues to accelerate digitalisation to improve speed and compliance. India’s air cargo throughput is forecast to reach 5.8 million tonnes by 2029—nearly double current levels—highlighting the ongoing pivot toward high-value, high-velocity trade.
Regional highlights
SAMA to Asia
Forecast: Intra-Asia air freight from India is expected to grow steadily through December, supported by regional manufacturing supply chains, pharmaceutical movements and expanding trade with Southeast and East Asia. Capacity is expected to remain sufficient, with multiple carriers maintaining regular daily frequencies to major Asian hubs.
Market dynamics: India’s role in Asian manufacturing supply chains continues to expand as companies diversify production beyond China. This is driving steady air freight demand for components, sub-assemblies and finished goods that require just-in-time delivery across the region. Pharmaceutical exports are also rising, with India supplying generic medications, vaccines and active ingredients to healthcare systems throughout Asia.
Ecommerce growth across Southeast and East Asia adds an additional layer of demand. Sellers in India are increasingly using air freight to meet fast-delivery expectations in markets such as Malaysia, Singapore and Thailand, supported by government-backed digital commerce programs that help smaller exporters participate in regional online marketplaces.
SAMA to North America
Forecast: India-U.S. air freight volumes will remain soft through December under the 50% tariff environment, with high-value sectors such as pharmaceuticals and electronics continuing to rely on air despite cost pressures. Rates are expected to firm up during the November-December peak as capacity tightens from seasonal demand and cargo shifting away from ocean routes amid Red Sea disruptions.
Market dynamics: The 50% U.S. tariff has reshaped India-U.S. trade, pushing many product categories out of price competitiveness. Despite this, vaccines, injectables and other critical medications continue to flow. And pharmaceutical exports continue moving by air because cold-chain integrity, regulatory timelines and medical demand make transit time non-negotiable.
Electronics manufacturers are also maintaining air volumes for select high-value components and finished goods where speed-to-market outweighs both the air premium and tariffs, especially in just-in-time production models that cannot absorb 30-40-day ocean transits.
SAMA to Europe
Forecast: India-Europe air freight flows are expected to remain stable through December, supported by steady demand for pharmaceuticals, textiles and engineering goods and the absence of punitive tariffs. Capacity is expected to remain sufficient, with carriers maintaining regular service frequencies.
Market dynamics: Europe remains India’s second-largest export market and is growing in importance as U.S. tariffs shift trade toward alternative destinations. Pharmaceutical exports to Europe continue to expand, supported by long-standing regulatory approvals and Europe’s reliance on Indian generics, vaccines and injectables.
Textile and apparel deliveries also remain steady, with manufacturers in India supplying both fast-fashion and traditional retailers across the region. Favourable European tariff structures are helping exporters maintain price competitiveness—unlike in the U.S. market, where tariffs have sharply reduced demand.
Key takeaways
- Consider markets in Asia and Europe, where the trade environment remains favourable and demand is stable or growing.
- Plan for airport congestion at India’s six major cargo hubs. Because processing may extend to 48-72 hours, add buffer time to delivery commitments.
South America
Global trends
Demand from South America remains strong as Q4 high season boosts volumes across major export lanes, particularly for perishables from Brazil, Chile and Peru. Air freight demand is mixed: Colombia up 8% y/y and Argentina up 1%, while Brazil, Chile and Peru reported declines. Yet seasonal fruit and agricultural exports are still driving concentrated demand and compressing booking windows to more than two weeks for time-sensitive cargo.
Spot rates are rising as peak-season demand tightens capacity, especially for cold-chain deliveries that rely on limited temperature-controlled equipment. Cold-chain freight now represents roughly 70% of South America’s outbound air volumes. Freighter capacity is increasing to support the seasonal peaks, with LATAM Cargo expanding South America-Europe service to 15 weekly flights starting October 2025—a 25% increase via Boeing 767s through hubs in Quito and Lima.
Some cargo traditionally bound for the United States is shifting to Europe as shippers diversify markets and respond to tariff considerations. Because many Europe-bound lanes were not designed for this redirected flow, short-term capacity is tightening and longer booking windows are emerging.
Operationally, major airports remain stable, though São Paulo-Guarulhos (GRU) continues to face congestion in ground handling and customs, adding one to two days to processing. Shippers are increasingly using Viracopos (VCP) and Recife (REC) for faster throughput and more reliable handling.
External pressures—particularly disruptions to maritime routes in the Red Sea—are pushing additional cargo from ocean to air. Industries that typically rely on ocean freight are now competing for limited air capacity, adding further upward pressure on rates. While carriers are adjusting networks, significant new capacity is unlikely in the near term given aircraft and crew repositioning constraints.
Looking into Q1 2026, modest volume growth is expected, supported by stable freighter utilisation and expanding belly capacity. Ecommerce investment across the region—including MercadoLibre’s $9.2 billion commitments in Brazil and Mexico—continues to drive underlying demand growth of 10-12% y/y. The floral season ahead of Valentine’s Day will add another temperature-controlled demand surge in January and February 2026.
Regional highlights
South America to North America
Forecast: Demand remains strong through December, with booking windows averaging five to eight days. Spot rates are trending upward, though deliveries under 500 kilograms remain easier to secure on general cargo terms due to their loading flexibility.
Market dynamics: The suspension of U.S. tariffs on select agricultural products is driving higher export volumes from Brazil. With these commodities now more price-competitive, buyers are increasing orders, creating immediate pressure on available cargo space.
Seasonal holiday demand is adding to already elevated delivery levels, increasing competition for space on key lanes. Traditional holiday goods—such as gifts, decorations and speciality foods—are overlapping with the surge in agricultural exports, creating peak-season pressure. Carriers have kept overall service stable through strategic scheduling, but time-sensitive and high-density cargo may still face tighter availability due to the specific aircraft positions and handling these deliveries require.
South America to Europe
Forecast: General cargo volumes continue to rise and carriers are adding incremental year-end frequencies to capture high season demand. Lufthansa has confirmed medium-sized aircraft for round trips between Munich (MUC) and Rio de Janeiro (GIG), providing additional dedicated freighter capacity on this key lane. Perishable exports remain strong, with some volume shifting from the United States toward Europe as shippers diversify market destinations.
Market dynamics: LATAM Cargo’s expansion to 15 weekly Boeing 767 flights and Lufthansa’s deployment of medium-sized aircraft between MUC and GIG are helping stabilise capacity during high season, supporting both perishables and general cargo. LATAM’s increased European reach via hubs in Quito and Lima is improving southbound and northbound connectivity for exporters across the region.
Perishable exports remain the primary driver of outbound volume, with berry season in Argentina and Chile adding concentrated demand for cold-chain lift during Q4. More exporters are shifting cargo to Europe as they diversify away from U.S. destinations, which is tightening cold-chain capacity on Europe-bound lanes. Avianca Cargo continues to lead in fresh-flower volume, building on a 15% y/y increase during the 2025 Mother’s Day season.
Viracopos (VCP) remains a preferred origin for high-density and time-sensitive freight due to faster ground handling and predictable processing—typically 24-36 hours—compared with congestion at GRU. The Recife-Porto route offers Northeast exporters direct European connectivity, eliminating domestic trucking to GRU and reducing total transit time by three to five days.
As seasonal perishable exports ramp up, cold-chain infrastructure—refrigerated trucking, storage and specialised aircraft positions—remains tight, driving firmer rates and requiring earlier booking. Cold chain freight continues to represent roughly 70% of South America’s outbound air volumes, underscoring its central role in regional export flows.
South America to SAMA
Forecast: High season demand remains strong, with time-sensitive and high-tech cargo now requiring lead times of more than two weeks. Spot rates are elevated as Red Sea maritime disruptions continue pushing ocean cargo to air, adding unplanned demand that competes directly with traditional seasonal volumes.
Market dynamics: Carriers have increased rates on Brazil's fruit exports as high season demand strains cold chain capacity. These deliveries require strict temperature control, careful handling to prevent damage and expedited customs clearance. When multiple exporters compete for limited refrigerated space during harvest peaks, rates rise to prioritise the most time-sensitive cargo.
Key connections through Madrid (ANGRY), Frankfurt (FRA) and Luxembourg (LUX) are also experiencing delays as volume exceed the ground handling capacity at these major European hubs. Typical four-to-six-hour connections may extend to 12-24 hours, increasing the risk of missed onward flights and delivery delays.
Red Sea disruptions continue to divert ocean cargo to air, adding unplanned demand and intensifying pressure on available capacity, particularly for perishables and other time-sensitive deliveries. Cargo that would normally move by sea is entering the air market to avoid extended Cape of Good Hope transit times.
Key takeaways
- Book perishables well in advance with carriers that support cold chain logistics, as specialised temperature controlled capacity is more limited than standard cargo space.
- Consider VCP or REC when logistics allow to minimise risk of delivery disruptions at GRU.
- Secure booking slots early—at least two weeks in advance—for time-sensitive cargo to Asia and the Middle East.
- Plan ahead for Q1 2026 Valentine's Day floral peak (January-February), which will create another seasonal surge in temperature controlled capacity demand.
Oceania
Global trends
Demand remains aligned with broader Asia-Pacific cargo tonne-kilometre (CTK) trends, with December reaching its typical seasonal peak driven by pharmaceutical and medical deliveries, mining spare parts and fresh produce. These sectors naturally see concentrated year-end activity due to production cycles, operational shutdowns and peak harvest periods, all of which contribute to elevated uplift during this time.
Capacity growth has outpaced demand on several key lanes, keeping rates generally stable through year-end. This favourable supply-demand balance provides shippers with more flexibility in booking and better opportunities for spot deliveries.
Inbound demand varies by region, with some lanes experiencing elevated rates due to limited dedicated freighter capacity and seasonal ecommerce demand.
Regional highlights
Oceania to Asia
Forecast: Rates are expected to hold firm through December, supported by seasonal uplift in volumes and generally balanced supply-demand conditions across key lanes.
Market dynamics: Seasonal volumes—especially pharmaceuticals, mining spare parts and fresh produce—support demand on Australia to Asia trade. These industries are inherently seasonal: pharmaceutical year-end production targets, mining spare parts needed before holiday shutdowns and Australia’s summer harvest all create concentrated delivery surges that fill available capacity.
Recent capacity additions have eased prior constraints, stabilising operations and supporting consistent rates into year-end. When capacity and demand grow in proportion, rates tend to stabilise, giving shippers predictable pricing for budgeting and planning.
Oceania to North America
Forecast: Rates are expected to remain mixed through December, driven by scheduling constraints within the U.S. domestic widebody network. Some fluctuations in space and pricing are likely as carriers adjust to operational challenges at gateway airports.
Market dynamics: Although total Australia-U.S. capacity has increased on the international leg, bottlenecks within the U.S. domestic widebody network—limited aircraft availability, schedule disruptions and constrained connections—are creating ripple effects for international cargo. When cargo arrives at U.S. gateways such as Los Angeles or San Francisco, but domestic flights are unavailable, freight may remain at the airport awaiting the next flight.
To avoid accumulating cargo at gateways, carriers adjust how much international freight they accept, leading to inconsistent space availability and fluctuating rates by lane, day and carrier. For shippers, this creates planning uncertainty and may require building additional buffer time into delivery schedules to account for potential domestic connection delays.
Oceania to Europe
Forecast: Rates are expected to remain soft through December, supported by ample available capacity and a lack of any significant seasonal demand surge.
Market dynamics: A significant capacity surplus continues to characterise Australia-Europe trade, keeping rates softer than typical high season levels. Carriers added capacity in anticipation of demand that has not materialised or in response to softer market conditions, resulting in wide availability for uplift and more competitive rates.
In a soft market, carriers often discount rates to maintain aircraft utilisation and cover fixed operating costs, providing opportunities for shippers to secure favourable terms. These conditions are expected to persist through year-end, with no major demand drivers on the horizon to absorb the excess capacity.
Oceania to Oceania (Australia-New Zealand)
Forecast: Market conditions remain soft through December, with rates steady to slightly lower amid continued excess capacity.
Market dynamics: Capacity on Australia-New Zealand routes continue to exceed seasonal demand, keeping rates subdued. This trans-Tasman trade lane often experiences periodic imbalances as carriers adjust to economic fluctuations in both countries. With more lift available than current bookings require, anticipate broad access to space and flexibility in timing. While December would typically bring tighter capacity and higher rates, the current surplus prevents these seasonal dynamics, reflecting relatively weak underlying demand.
Key takeaways
- Take advantage of soft conditions on Australia-Europe and Australia-New Zealand lanes, where capacity remains ample.
- Early booking from Australia to Asia is recommended to maintain stable rates amid seasonal surges in pharmaceuticals, mining spare parts and fresh produce—waiting until closer to delivery date may result in space constraints or premium pricing as peak volumes materialise.