International air cargo is highly reliant on global supply chains and cross border e-commerce traffic. Both look like they will take a beating in 2025. In January we were still expecting growth of between 3.5% and 7.4% but our latest forecast foresees a range of between -0.1% and +0.7%. This is driven a weaker economic outlook globally as well the potential loss of about one third of transpacific air cargo volumes due to US de-minimis rule changes.
Trade Data Service
About 17% of global exports are destined for the United States. The importance of the US as an export market has increased since 2008 but is lower than at the turn of the century when the US accounted for over 21% of global export value. At a country level the importance of the US as a trading partner varies significantly, with Canada, Mexico, and parts of Latin America and Caribbean being highly dependent and the rest of the world less so. This is one key aspect in understanding the potential impact of tariffs on overall exports on both large and small economies around the world. This article focuses on two aspects – dependency on trade overall as well as specific dependence on the US as an export market.
The latest round of tariff announcements only that a quarter of US imports will be subject to at least an additional 10%. Additional tariffs imposed on 47 countries primarily in the Asia Pacific and across Africa range between 11% and 50%. Three Pacific Island countries – Fiji, Nauru and Vanuatu will be subject to additional tariffs starting 9 April. This article provides a summary of measures and exceptions, as well as discussing implications for Pacific Island exports.
More than a quarter of US supply inputs into US industry are met through imports. This ranges from about 9% for farm related imports to as much as 84% for apparel and leather products. Import tariffs will affect both the end cost of consumer goods and exports. This article discusses which segments are likely to see the biggest impacts from higher import tariffs.
International air cargo growth continues to be highly reliant on cross border e-commerce traffic originating from China. We estimate that about 35% of international air cargo currently consists of express small package and cross border e-commerce consolidations – up from about 26% five years ago. Future air cargo growth expectations continue to ride on cross-border e-commerce rather than traditional global supply chain traffic. We forecast international air cargo growth of between 2.8% and 5.5% for the next five years. This article discusses growth drivers and downside risks.
The recovery of the Indian air cargo market appears to be complete. Both international and domestic volumes higher than their respective 2018 and 2019 peak levels. Indian air cargo outperformed overall world air cargo growth in in 2024. Over the next five years we expect cargo traffic could grow from about 3.7 million tonnes today to between 5 and 5.8 million tonnes, or about 6-9% per year. We expect international air cargo to grow faster than domestic air cargo. Currently international air cargo accounts for about two thirds of air cargo handled at Indian airports. This article discusses recent trends in Indian air cargo and a forecast through to 2029 as well as discussing implications for freighter aircraft demand.
For transportation providers understanding short-, medium- and long-term regulatory impacts on country-to-country flows is fundamental to network and fleet decisions across all transportation modes. For example, as China has grown its share of world non-bulk trade from around 11% in 2010 to about a quarter in 2023. To support this growth container shipping lines have invested in significantly larger ships. More and more freighters are being deployed to fly freight out of China. A shift to more intra-regional trade would require different capacity – smaller vessels, less planes, more trucks and provide increased opportunities for growth of rail services. Less trade overall would mean lower demand for capacity overall. Looming steep tariff increases are a legitimate cause for fear, but changes in the world trading system have been unfolding over many years. This article provides some thoughts on how to think about the impact of tariffs in the context of how supply chains have been evolving over the past 20 years.
The US imports about 60% more than it exports. All but two of the top 10 US trading partners export more to the US than they import from the US. The potential imposition of steep import tariffs by the incoming US administration aims to redress this situation and encourage more local production and increased exports. Estimating the impacts of tariffs is as complex as the underlying supply chains linked to each type of product as well as counter measures applied by trading partners. We expect to be writing a lot about this topic in the coming months. This article focuses on how the US trade imbalance has evolved and which trading partners and products are likely to see the greatest impact.
Lack of demand continues to be holding back EU industrial growth. Recent business survey data through to October show a further drop in economic sentiment, capacity utilisation and orderbook. The main factor cited by European companies limiting production output is demand and not factors such as material or labour shortages that were an issue two years ago. Trade statistics reflect this continued weakness of European industry – particularly in Germany. However, the overall gloomy picture hides strong performance in some individual markets. This article provides commentary on the latest industrial survey figures in the context of import and export developments to key markets.
The US domestic air cargo market today is about as big as it was in early 2017 – despite a boom in e-commerce. After growing at about 3.7% per year between 2012 and 2021, flown traffic has dropped by almost 20% since early 2022. The bad news is that we may see more declines in the next 18 months. The good news is that declines are likely to be more moderate. This article looks at the outlook for the US air cargo market and discusses what it means for the demand for air capacity.