The global air cargo market is entering the second half of 2026 with far less momentum than many carriers and forwarders had hoped for. Premiums are bleeding off slowly after months of high rates tied to the Middle East conflict, and few signs of the traditional peak season kicking in.
Xeneta said global air cargo spot rates averaged US$3.12 per kg in July, 28% higher than the same month last year. However, rates were down 6% on June, the second month in a row to see year-on-year growth slow.
That slowdown has been particularly evident in what shippers expect. Xeneta Chief Airfreight Officer Niall van de Wouw said conversations with customers showed very little interest in peak-season charter programs, signaling that companies are preparing for a softer second half of the year.
Seasonal pressures are also weighing on rates. Additional passenger belly capacity is helping boost available air cargo space on several routes as the Northern Hemisphere enters the August holiday period. So there is likely to be resistance from airlines to sharp rate reductions, not least because of continuing uncertainty about fuel prices and the conflict in the Middle East.
Asia-Europe is the weakest major corridor at the moment. July saw rates from Northeast Asia to Europe drop 13% month-on-month, and Southeast Asia-Europe rates decreased 9%. The most substantial drop in prices was experienced on the China-Western Europe route, down 22% to US$4.15 per kilogram.
The timing of the fall is attracting attention. The EU abolished its €150 duty-free threshold on low-value imports on 1 July, replacing it with a €3 duty per item. The pullback of freighter capacity from China-Europe e-commerce services suggests the regulatory change may already be impacting airfreight volumes.
Middle East routes still carry significant premiums in comparison. At the end of July, rates into the region were still 84% higher than late-February levels out of South Asia, and 47% higher out of Southeast Asia. Europe-Middle East rates were 62% above pre-conflict levels.
Artificial intelligence and semiconductor-related shipments have also continued to drive demand in Transpacific markets. Premiums from Northeast and Southeast Asia to North America were still 33% above late-February levels, but down from the higher premiums seen in June.
The picture is very different across the Atlantic. Higher passenger schedules have brought more belly capacity to the market, causing Europe-North America spot rates to drop 27% from late February levels.
Overall demand growth is also decelerating. Global demand for air cargo grew only 4% year-on-year in July, down from 8% in June. Meanwhile, available capacity grew 1% as airlines continued to recover from the disruption caused by the Middle East conflict.
Xeneta’s dynamic load factor was 61% – two percentage points higher than a year ago, reflecting the balance between cargo volumes and available capacity.
Still, several uncertainties could change the market in the months ahead. Cargo volumes and pricing may be affected by fuel prices, the trajectory of the Iran conflict, the impact of the new EU customs rules on e-commerce and regulatory action against major online marketplaces.
But for now, the market is moving away from the exceptional rate environment that we saw earlier in 2026. With demand growth slowing and capacity recovering, it is increasingly likely that the second half of the year will be characterized by softer rates, rather than a traditional air cargo peak season.
