The air cargo industry is facing a potential capacity crunch in 2025 as passenger aircraft additions slow down and the supply of freighter conversions remains limited. Speaking at the Tiaca Air Cargo Forum, Rotate chief executive Ryan Keyrouse highlighted several factors that could contribute to this capacity shortage. Keyrouse pointed out that belly capacity growth is slowing, aircraft production is facing delays, and the high demand in the passenger market is affecting the availability of aircraft for cargo conversions.
He noted that aircraft utilization is already at its highest level in five years, leaving little room for additional capacity. If e-commerce demand from Asia continues to grow at around 20% next year, Keyrouse predicted that capacity might be shifted from other markets to meet this demand, further exacerbating capacity shortages. If you have a 4.4% capacity growth and a 20% demand growth from China, it can only come from one place – moving capacity from Africa and Latin America into these markets,” he said.
Looking ahead, delays in new widebody freighter programs from Airbus and Boeing, coupled with an aging fleet, could also impact capacity. Keyrouse explained that carriers will likely try to extend the life of their aircraft, but this could lead to service disruptions and decreased utilization due to their age. On the demand side, Keyrouse expects volumes to remain strong despite potential regulatory changes in the US and other countries that could impede e-commerce imports.
He suggested that companies like Temu and Shein might focus on growth in markets with lower e-commerce penetration, such as Southeast Asia and Latin America.
Facing 2025 capacity constraints
Regarding the impact of trade tariffs, Keyrouse anticipates a rush in demand ahead of their implementation, followed by a drop-off.
However, he believes that other markets will see a pick-up in exports as production shifts, and trade will continue to grow in the long term, as it has since the 2018-2019 China-US tariff war. The air cargo market is currently experiencing a busy period without a clear peak season, according to industry leaders. Jan Krems, president of United Cargo, noted that October was the best month in the company’s history in terms of tonnage, but the market remains steady rather than experiencing a significant peak.
DB Schenker has reported similar observations, with head of airfreight Asok Kumar describing the season as busy but not exceptional. Despite the lack of a sharp rise in rates, the market remains optimistic due to the ongoing capacity constraints and increasing yields. As the industry looks ahead to 2025, capacity management and supply-side challenges are expected to continue.
Kumar expressed cautious optimism, stating that the supply situation will remain a key factor in the market’s performance. The potential for a port strike on the US east and gulf coasts in January could also lead to increased air cargo activity, provided there is sufficient capacity available, according to Krems. In conclusion, the air cargo industry is navigating a stable yet busy period, with capacity constraints and rising demand expected to shape the market in the coming years.
While challenges persist, industry leaders remain cautiously optimistic about the future of air freight.
