Air cargo volatility deepens as weather, trade and policy disrupt flows

Global air cargo is no longer moving to a predictable rhythm. As 2026 begins, the market is shaped less by steady demand and more by sudden disruptions. Weather shocks, trade policy shifts and geopolitical tensions are repeatedly forcing cargo into the air, creating sharp but uneven movements in demand and rates. According to Global Logistics Update from Flexport, recent shifts in trade policy between the United States and India are another source of volatility for the global air freight market and could shape demand patterns on key trade lanes in the months ahead. This is not a story of recovery or decline. It is a story of volatility becoming permanent. Air cargo today is being used as a response mechanism, a way to manage uncertainty rather than as part of a stable, long-term logistics plan.

Disruption elsewhere keeps pushing cargo into the air
The year opened with severe winter weather disrupting logistics across the Atlantic. Large parts of the United States, particularly the southeast and the southern midwest, were still recovering from a major storm and extreme cold. At the same time, storms in the North Atlantic slowed vessel movements and disrupted or shut down operations at several container ports across Western Europe and the Mediterranean, according to the analysis from Freightos.

Although some western Mediterranean ports resumed operations earlier in the week, it was noted that delays had already been absorbed into supply chains. Congestion risks increased, particularly at northern European ports, with weather expected to worsen again mid-week.

According to Freightos, such ocean-side disruptions do not eliminate cargo demand but instead alter transport choices. When schedules become unreliable, shippers look to air cargo to protect delivery timelines, creating short-term pressure on air freight demand.

According to Flexport’s air freight market update, this volatility is clearly visible across key Asian export hubs. In North China, demand is recovering unevenly, with strengthening volumes on Chicago and New York lanes driven by general cargo bookings, while other US gateways remain flat. Rate pressure has increased on these two lanes, but the lack of broad-based momentum points to a muted pre-Lunar-New-Year peak, particularly as some suppliers prepare for early workforce releases.

In South China, the market is preparing for the holiday peak, although demand is expected to soften as factories begin closing. While capacity remains stable for now, Flexport noted that flight cancellations are expected during the holiday period, adding to uncertainty around space availability.

Air cargo demand rises, but only in pockets
Global air cargo demand ended 2025 on a firmer note, with demand measured in cargo tonne-kilometres rising by 4.3 per cent year-on-year in December, according to IATA. International air cargo outperformed domestic markets, growing by 5.5 per cent, the association said.

However, IATA data shows that this growth was uneven. Asia Pacific and Africa were the only regions to record double-digit growth, while demand in the Americas declined. According to IATA, weaker trade flows and policy uncertainty weighed on the North American market.

According to the Flexport analysis, demand for air freight on ex-China routes has been rising, even as some shipments from the Indian subcontinent were paused during stalled US–India trade negotiations. This dynamic further underlines that carrier and forwarder planning continues to shift with policy developments rather than traditional seasonal demand patterns. This uneven regional performance highlights that air cargo growth is no longer broad-based. Current demand patterns are increasingly corridor-specific and sensitive to disruption rather than driven by sustained economic momentum.

In Taiwan, demand has remained stable, but rates have increased due to severe backlogs linked to recent weather disruptions in the United States. In Vietnam, demand has picked up slightly ahead of the Lunar New Year, resulting in higher rates on Trans-Pacific eastbound lanes, while carriers continue to work through weather-related backlogs from last week’s storms in the US.

Cambodia’s air freight market remains stable for now, according to Flexport, though rates are expected to edge higher as factories accelerate production ahead of the holidays. Operations in the country are expected to continue normally through the holiday period.

Asia anchors the market amid uncertainty
Asia Pacific has emerged as the main stabilising force in global air cargo, according to Dimerco’s Asia Pacific freight analysis. The analysis noted that manufacturing activity, diversified sourcing strategies and resilient intra-regional trade continued to support air cargo volumes across the region.

IATA data also showed that the Europe–Asia corridor recorded one of its strongest December performances in recent years. The demand on this route was supported by manufacturing inputs, high-value shipments and time-sensitive cargo.

Intra-Asia demand remained resilient as well, according to Dimerco, reflecting the region’s growing role as both a production and consumption hub. By contrast, the Asia–North America corridor remained weak. Despite some improvement late in the year, IATA said the route ended 2025 in contraction, weighed down by trade policy changes and softer demand.

Flexport’s update also highlights that should the US–India tariff reduction be implemented, trade flows between the two countries may eventually become more predictable, potentially lifting volumes on some air freight pairings that have softened under uncertainty. This suggests that policy developments themselves are now material drivers of air cargo route performance. According to Dimerco and IATA, this divergence explains why air cargo markets appear strong in some regions while remaining under pressure in others.

Flexport also pointed to persistent weather-related disruptions shaping demand across North Asia. In South Korea, backlogs caused by last week’s storms in the United States are expected to continue through this week, with bookings for all US destinations fully booked into early February and slight rate increases reported.

In Malaysia, demand on Trans-Pacific eastbound lanes remains stable with firm rates, though Flexport noted congestion at major hubs for connections into Dallas, Atlanta, New York and Los Angeles, underlining how network bottlenecks are influencing route-level performance rather than overall demand strength.

Trade policy injects uncertainty into air freight planning
Trade policy developments have become a major driver of volatility in air cargo, said Freightos. The company reported that India–US container volumes have slumped since August, when the United States introduced 50 per cent tariffs on several Indian exports.

Freightos noted that a recent breakthrough in US–India negotiations could lower tariffs to 18 per cent, potentially triggering a rebound in container and air cargo demand once implemented. However, the agreement has yet to be signed, and details remain unclear, extending uncertainty for shippers.

On February 2, 2026 the U.S. and India announced a trade agreement that would reduce the total effective tariff rate on Indian goods from 50 per cent to 18 per cent, though implementation remains pending. The planned reduction includes removing an additional 25 per cent tariff imposed last August, a change that could have downstream effects for both ocean and air freight flows once formalised. Further uncertainty has been created by US measures allowing tariffs on countries selling oil to Cuba and by threats of punitive action against Canada’s aviation manufacturing sector. Such policy shifts, Freightos said, encourage short-term, reactive shipping decisions rather than stable planning, a dynamic that often favours air cargo.

In India, Flexport reported that air cargo rates are gradually increasing as demand picks up, particularly on Trans-Pacific eastbound lanes. However, adverse weather has led to several flight cancellations, prompting shippers to secure early pre-bookings to ensure space availability.

Bangladesh and Pakistan are also seeing rising inquiry levels linked to the pre-Lunar-New-Year rush, according to Flexport. While capacity remains available, shippers with urgent cargo are being advised to pre-book four to five days in advance to secure uplift.

Rates reflect a market driven by events
Air cargo pricing in early 2026 reflects this event-driven environment, according to Freightos data. China–US air freight rates rose ahead of the Lunar New Year, reaching $6.74 per kg last week, up from around $5.50 per kg in early January.

The data also showed South East Asia–US rates climbing to nearly $5 per kg from around $4 per kg just weeks earlier. On the Europe side, China–Europe rates dipped four per cent to $3.44 per kg, while South East Asia–Europe prices rose seven per cent to more than $3.20 per kg.

Transatlantic air cargo rates increased 10 per cent to over $2.50 per kg, around 25 per cent higher than at the start of the year. The rate movements underline that air cargo strength is selective rather than universal, with pricing reacting to short-term events rather than long-term trends.

Capacity returns, but balance remains fragile
Global air cargo capacity increased broadly in line with demand, according to IATA, supported mainly by the continued recovery of passenger bellyhold space. The dedicated freighter capacity expanded more selectively, with operators redeploying aircraft away from routes exposed to policy risk.

Load factors remained broadly stable, and cargo yields showed signs of levelling off after prolonged declines. However, the association cautioned that balance remains fragile.

According to IATA, capacity can tighten quickly on routes affected by disruption, driving rates higher, while excess capacity on other lanes continues to pressure yields. This imbalance has shortened planning horizons for airlines and forwarders.

Costs ease, confidence does not return
Jet fuel prices fell year-on-year, easing cost pressures for airlines, said IATA. While this has helped stabilise yields, it has not been enough to restore confidence.

Manufacturing indicators point to cautious expansion, while new export orders remain weak in the broader economic environment. At the same time, Freightos noted that global trade volumes have shown resilience, highlighting a disconnect between sentiment and activity.

According to both IATA and Freightos, air cargo is benefiting from this disconnect, but the demand remains fragile and uneven.

Volatility becomes the operating environment
As 2026 unfolds, volatility has become the defining feature of the air cargo market, according to combined analysis from Freightos, IATA and Dimerco. Weather disruption, trade policy shifts and geopolitical developments are reshaping demand in real time, creating sharp contrasts between regions and trade lanes.

Air cargo is increasingly being used as a risk-management tool when supply chains falter elsewhere. Stability has not disappeared, but it has become temporary. For the air cargo industry, volatility is no longer a phase to move through, it is the environment it must now operate in.