Air freight capacity tight across Asia amid fuel strain: Dimerco

Jet fuel shortages, tight cargo capacity, airport congestion and strong semiconductor and AI demand are continuing to reshape air freight markets across Asia Pacific, keeping rates elevated and operational pressure high on key trade lanes, according to Dimerco’s June 2026 Asia Pacific Freight Report.

The report said airlines across the region are continuing to adjust operations because of Middle East tensions, fuel volatility and capacity constraints, resulting in longer transit times, reduced cargo space and higher freight rates, particularly on routes to Europe and the US.

Jet fuel shortages remain one of the biggest operational concerns for airlines. To manage fuel consumption and improve efficiency, some carriers are reducing cargo payloads or replacing larger Boeing 747 freighters with smaller Boeing 777 freighters. Although overall demand remains relatively stable compared with last year, these operational adjustments have tightened effective market capacity and supported higher freight rates.

Dimerco said strong demand for semiconductor, artificial intelligence, e-commerce and high-tech shipments continues to support air cargo volumes across Asia Pacific, particularly in Taiwan and South Korea, where capacity remains under pressure.

Taiwan remains one of the tightest air freight markets in the region as semiconductor, AI server and cross-border e-commerce shipments continue to drive strong demand. Routes to North America and Europe remain constrained, keeping freight rates elevated because of limited space. The report said Asia exports from Taiwan to Penang, Singapore, Bangkok and Chennai are also facing pressure, while flights from Taiwan to India were fully booked through the end of May.

Fuel-related surcharges are also adding to cost pressure. Major airlines, including China Airlines and Cathay Pacific, increased fuel surcharges in May, adding further cost increases across export routes.

South Korea is also facing capacity pressure as airlines prioritise China cargo and strong semiconductor equipment demand continues to support high shipment volumes. Cargo space to Singapore, Penang and Kuala Lumpur remains heavily constrained, while Europe-bound shipments are facing tight utilisation, with night flights operating at more than 95% capacity. Some modal shift from ocean freight to air freight and continued China-US transhipment cargo moving through Incheon are also contributing to space shortages.

In China, air freight conditions vary by market, although operational disruption and tighter capacity remain common themes. In North China, airlines are reducing connecting flights and replacing wide-body aircraft with narrow-body aircraft, creating an acute shortage of cargo space on Southeast Asian routes. At the same time, suspended charter operations between Zhengzhou and Los Angeles/New York from mid-May to mid-June have reduced transpacific capacity and pushed spot rates higher.

In East China, suspended US charter flights are redirecting regional cargo into Shanghai for US-bound shipments, tightening available space and supporting higher rates. Operational disruption and backlogs at Middle Eastern hubs have also forced airlines and shippers to reroute cargo through Southeast Asian transit points such as Singapore, Bangkok and Manila, putting additional pressure on intra-Asia air cargo capacity and spot pricing.

South China’s market remains mixed. Dimerco said the market continues to face overall overcapacity, although air freight space and pricing are increasingly being influenced by jet fuel prices rather than demand alone. An increase in e-commerce shipment volumes is expected during the second half of June, which could support cargo demand.

Hong Kong remains relatively stable on intra-Asia air freight routes, although capacity on the Hong Kong-Bangkok lane is tightening. Outbound space from Hong Kong to major US gateways also remains constrained.

In Southeast Asia, Thailand is facing severe congestion at airport terminals, making cargo movement increasingly difficult. Cargo lead times from arrival to final collection are exceeding seven days in some cases, while congestion at Suvarnabhumi Airport, particularly at TG and BFS terminals, is slowing cargo handling, customs clearance and exports. The delays are also resulting in occasional shipment offloading and longer transit times. As a result, some shippers are increasingly using cross-border trucking solutions from China and neighbouring Southeast Asian countries into Thailand as an alternative.

Elsewhere in the region, Malaysia’s Kuala Lumpur and Penang gateways remain tight because of high-tech cargo demand, with backlog conditions affecting some US-bound routes. Singapore and Indonesia continue to face firmer rates on Europe and US lanes, while Australia is seeing rising rates and tighter conditions on several export routes.

India’s air freight market is also under pressure as airlines continue operating cautiously around Middle East airspace, resulting in longer transit times and elevated freight rates on Europe and US routes.

According to Kathy Liu, Vice President, Global Sales and Marketing at Dimerco Express Group, some high-tech shippers have resumed direct air freight services between China and the US following more stable trade policies after recent discussions between Chinese President Xi Jinping and US President Donald Trump.

“While some direct China-US airfreight volumes are returning as trade policies stabilise, strong AI and semiconductor demand continues to keep capacity extremely tight across Asia,” Liu said.

Dimerco added that although some China-US cargo is moving directly again, strong semiconductor and AI server demand from Taiwan to the US continues to keep outbound capacity tight and freight rates elevated across both transpacific and regional trade lanes.

Across Europe, airlines continue managing cargo capacity cautiously despite no major physical shortages at airport hubs. Jet fuel volatility and geopolitical risks are keeping operating costs elevated and maintaining upward pressure on air freight rates, while demand across industries remains mixed.

In North America, air freight markets remain relatively stable with balanced capacity and manageable rates. However, strong semiconductor and high-tech exports from San Francisco are continuing to support cargo demand, while the perishables season on the US West Coast is tightening selected freighter capacity.

Overall, Dimerco said air freight markets across Asia Pacific remain cautious as airlines continue adjusting operations around the Middle East situation, with longer transit times, tighter capacity and higher freight rates expected to continue across major Europe and US trade lanes.