Air Cargo Surge Driven by AI Demand as Capacity Remains Tight

Expeditors International reported strong Q3 air cargo results, with volumes up 13% year-on-year and revenues surging 51.4% to $1.5 billion. The growth was fueled primarily by hyperscaler demand for AI infrastructure components and suppliers, coupled with elevated freight rates reflecting constrained capacity. However, operating costs grew even faster at 52%, eroding margins slightly from 24.8% to 24.3% as fuel costs more than doubled and carrier rates remained elevated due to supply-demand imbalances.

The air freight market is experiencing structural constraints: new aircraft delivery delays, limited fleet expansion, and geopolitical disruptions have created a supply-constrained environment where demand far outpaces available capacity. Additionally, EU regulations targeting de minimis e-commerce imports have forced aircraft redeployments away from Asia-Europe routes, while China-US e-commerce volumes have nearly recovered following the US termination of preferential de minimis treatment in May 2025. For supply chain professionals, this data signals that air freight will remain an expensive option through at least the near term.

The structural capacity shortfall, combined with elevated fuel costs driven by Middle East tensions, suggests pricing pressure will persist. Companies relying on air freight for time-sensitive shipments (particularly AI infrastructure and electronics) should expect higher costs and tighter capacity, making demand planning and carrier relationship management critical strategic priorities.