Air freight rates rise as fuel shortages tighten global capacity

Global air freight markets are facing tightening capacity and rising costs in May 2026, as fuel constraints linked to Middle East tensions reduce airline capacity while strong demand, particularly from AI-related cargo, continues to push rates higher, according to Dimerco’s latest Asia Pacific Freight Report.

Tensions in the Middle East are tightening global jet fuel supply, prompting airlines to reduce passenger flights and limiting belly cargo capacity, especially on Asia–Europe routes. At the same time, demand linked to artificial intelligence shipments into the US remains strong, further driving up overall logistics costs alongside ongoing fuel surcharge adjustments.

“Demand for traditional commodities is still relatively stable, but cost pressure is building across the board. With fuel surcharges rising and capacity tightening, shippers are having to plan earlier and manage costs much more carefully than before,” said Kathy Liu, VP, Global Sales and Marketing, Dimerco Express Group.

Across regions, air freight capacity remains constrained. In Northeast Asia, strong demand for electronics and semiconductors continues to keep capacity tight and rates firm. In Southeast Asia, rising fuel costs and geopolitical tensions are driving higher surcharges and limiting available space, while congestion and peak season build-up are affecting reliability and extending booking lead times.

Air freight conditions in Europe are also under pressure, with Middle East airspace restrictions tightening capacity and keeping rates elevated. In North America, strong Asia-bound demand is supporting air cargo volumes, but limited capacity is creating backlogs on key routes.

In Northeast Asia markets such as Taiwan and South Korea, capacity constraints and rising rates are being driven by fuel surcharges, reduced airline supply, and strong demand from sectors such as semiconductors, IT and e-commerce. Advance booking is increasingly required, with some routes seeing space fully booked weeks in advance.

In China, tight capacity and rising rates persist on several routes, with payload restrictions and localised fuel shortages affecting flight operations and reducing available space. This is keeping regional capacity strained despite some signs of rate stabilisation compared to earlier peaks.

Amid these pressures on air freight, the China–Europe freight train is emerging as an alternative option. Rail services have entered a period of sharp price increases, with rate hikes of around $600 to $800 or more becoming the new baseline for May.

Ongoing disruptions in the Red Sea and congestion at European ports are pushing some cargo away from ocean and air freight towards rail. The cargo mix on these routes is also diversifying, with heavy equipment and mechanical components remaining key, while volumes of auto parts and general consumer goods are increasing as shippers look for a middle ground between higher air freight costs and slower, less reliable ocean services.

In Southeast Asia, India and Australia, fuel surcharges are rising as airlines carry extra fuel due to airspace restrictions, further reducing belly capacity and, in some cases, flight frequencies. India is also seeing reduced capacity on Europe and US routes as airlines take longer routings, impacting transit times and increasing freight costs.

Meanwhile, strong demand for electronics and AI-related shipments from Asia to the US continues to drive air freight volumes, even as reduced airline capacity leads to backlogs at major US gateways.

Overall, the air freight market remains under pressure from a combination of geopolitical disruptions, fuel cost volatility and sustained demand, resulting in tight capacity conditions and elevated rates across key global trade lanes.