Slower growth in volumes may not hold good for trade

Market fundamentals are holding up, but the drop in air cargo drop rates is likely to reflect declining sentiment over as to what will happen once international trade stabilises. Though trade conditions may worsen, this uncertainty gives a bit back to air freight, says Niall van de Wouw, Chief Airfreight Officer, Xeneta.

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While international trade continued to flow in May and global air cargo volumes rose over 6 per cent year-on-year, market sentiment and concerns over what comes next saw air freight spot rates decline for the first time in a year, according to Xeneta's latest market analysis.

Midway through May, the global air cargo market appeared to have dodged a perfect storm as the US-China 90-day tariff truce began on 14 May after the escalating retaliatory tariffs since April. The USA administration lowered its additional tariffs on China from 145 per cent to 30 per cent, while China responded by decreasing its tariffs on the USA to 10 per cent.