Global air cargo demand rose 5% year-on-year in July as increasing numbers of shippers turned to air transport to bypass U.S. tariffs. Market sentiment remains cautious due to ongoing tariff negotiations, with continued uncertainty negatively impacting global trade flows, particularly in air freight.

Industry experts note that air cargo is benefiting from the disruption caused by tariffs. While the July growth came as a positive surprise, it reflects not increased trade volumes but rather companies' creative strategies to mitigate high tariff costs.

The unexpected demand surge followed modest growth in June and appears driven by tariff-related frontloading, modal shifts, and persistent uncertainty prompting accelerated shipments. Businesses increasingly view air transport as crucial when time-sensitive tariff avoidance is required, with the 30-day ocean shipping timeline becoming impractical for many.

Despite stronger fundamentals, global air cargo spot rates declined for the third consecutive month in July, down 2% year-on-year to $2.55 per kilogram. The rate of decrease has slowed due to emerging demand-supply imbalances. Airline capacity grew just 2% month-on-month, providing some relief to carriers though medium-term prospects remain subdued.

Key regional trends show:

• Trans-Pacific routes weakening significantly
• Southeast Asia to North America rates falling 16% to $4.87/kg
• Northeast Asia to North America remaining stable at $4.81/kg
• Mainland China to U.S. rates dropping 11% to $4.26/kg
• Asia-Europe lanes showing mixed performance

The upcoming elimination of U.S. de minimis exemptions for all countries by August's end may further reshape small-package air trade patterns.

Industry observers describe the current environment as a dynamic adjustment period where air cargo demonstrates its value in responsive logistics, though they caution this tariff-driven demand may prove temporary once trade policies stabilize.