Why are air cargo rates staying high if capacity is increasing?

Capacity recovery does not automatically translate to rate reductions. Multiple factors sustain higher pricing: persistent demand from e-commerce and time-sensitive goods, regional capacity imbalances where supply isn't reaching demand centers, elevated fuel surcharges, and potential network congestion. The market may have shifted to a new equilibrium where baseline rates reflect true operational costs and risk premiums rather than pre-pandemic levels.

What should procurement teams do to manage air freight costs in this environment?

Procurement strategies should focus on: securing capacity commitments with fixed or capped rates through contracts, consolidating shipments to improve load factors, exploring alternative modes like expedited ocean freight for less time-critical cargo, and revisiting supplier location strategies to reduce air dependency. Additionally, optimizing inventory positioning closer to demand can reduce emergency air shipments.

How long is this high-rate environment likely to persist?

The article does not specify duration, but sustained rates despite capacity recovery suggest this is not a temporary spike. Supply chain teams should budget for elevated air freight costs as a structural feature of the market for the foreseeable future rather than a cyclical anomaly that will self-correct.

Which industries are most vulnerable to these rate trends?

Industries with high time-sensitivity, low density, or perishability are most exposed: electronics, pharmaceuticals, fashion/retail (especially e-commerce), and fresh produce. These sectors have limited mode alternatives and typically absorb air freight as a strategic cost of market access.

Are there regional differences in air cargo pricing?

The article references South African market context, suggesting regional variations exist. Capacity imbalances between trade lanes mean some routes may see more rate pressure than others. Teams should evaluate lane-specific pricing trends and consider sourcing or routing adjustments based on regional rate dynamics.

Shipping & Freight

Moderate

Air Cargo Rates Climb Despite Rising Capacity

Jun 15, 2026

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The signal

The air cargo market is experiencing a counterintuitive trend: despite increasing capacity availability, freight rates remain elevated. This phenomenon indicates structural shifts in demand patterns and market dynamics that go beyond simple supply-demand mechanics. For supply chain professionals, this signals that the traditional correlation between capacity recovery and rate normalization may no longer hold, requiring a fundamental reassessment of air freight cost assumptions in financial planning and procurement strategies.

The persistence of high rates amid capacity expansion suggests several underlying factors: sustained e-commerce demand from peak seasons, elevated fuel surcharges, regional bottlenecks that prevent capacity from reaching deficit areas, and potential shifts in shipper preferences toward premium air services. This creates a complex environment where procurement teams cannot rely on historical pricing patterns to forecast costs or negotiate favorable rates. Organizations depending on air freight for time-sensitive shipments face a prolonged period of elevated costs.

Strategic responses should include diversifying transportation modes where feasible, optimizing cargo consolidation and load factors, negotiating longer-term capacity commitments at fixed rates, and revisiting inventory positioning to reduce air freight dependencies for non-critical shipments.

Frequently Asked Questions

What This Means for Your Supply Chain

Simulation Suggestion

immediate

What if we secure a 12-month fixed-rate capacity contract at current rates?

Simulate locking in current air freight rates via a 12-month capacity commitment contract. Compare total cost scenarios against month-to-month spot market pricing under three rate trajectories: rates increase 20%, rates remain stable, or rates decrease 10%. Evaluate the financial break-even point and the value of rate certainty for demand planning.

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Simulation Suggestion

this month

What if air cargo rates increase another 15% over the next quarter?

Simulate a 15% increase in air freight rates across major trade lanes over the next 90 days. Model the impact on product cost of goods sold, landed costs for time-sensitive imports, and total cost of ownership for inventory positioned globally. Compare scenarios where teams shift 20%, 50%, or 80% of air freight volume to alternatives like expedited ocean or multimodal routing.

Run this scenario

Simulation Suggestion

this month

What if we shift 30% of expedited air freight to premium ocean service with 10-day transit?

Model a scenario where your organization routes 30% of current air freight volume to expedited ocean service with 10-day transit times instead. Evaluate cost savings, impact on inventory safety stock requirements, potential service level degradation, and which product categories or customer segments can tolerate the longer lead times without revenue loss.

Run this scenario

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