Air Freight Contracts Under Pressure in Tightening Market

The air freight market is experiencing a structural shift toward supplier dominance, with annual contracts becoming increasingly difficult to negotiate and maintain. According to Xeneta, the tightening capacity environment and rising reliance on spot purchasing are forcing both forwarders and shippers to fundamentally reconsider their long-term pricing strategies. This represents a marked departure from traditional contracting models and signals a power imbalance favoring carriers and intermediaries.

For supply chain professionals, this development carries immediate operational and financial implications. The shift undermines budget predictability, complicates capacity planning, and increases exposure to volatile spot rates. Organizations that have relied on fixed annual rates must now navigate a market where supplier leverage is at historical highs, creating pressure on margins and requiring more agile procurement approaches.

This trend reflects broader capacity constraints in air freight, likely driven by post-pandemic demand recovery and ongoing supply chain volatility. Shippers must adapt by diversifying transportation modes, building stronger relationships with key carriers, and implementing dynamic pricing strategies rather than assuming contract stability.