Why are shippers moving away from long-term air freight contracts?

Shippers are prioritizing flexibility over commitment due to continued market volatility, rate unpredictability, and capacity constraints in air freight. Three-month contracts allow them to renegotiate frequently and adjust commitments based on actual demand rather than forecasts made months in advance.

What do the Q3 2024 figures tell us about market confidence?

The jump from 47% three-month contracts in Q2 to 60% in Q3 2024 represents a 28% increase in short-term preference. This signals declining shipper confidence in rate stability and capacity guarantees over longer periods, suggesting carriers and shippers both expect continued turbulence.

How should procurement teams adjust their strategy?

Teams should adopt rolling forecast models, build multiple carrier relationships to maintain negotiating leverage, and establish quarterly contract review cycles. They should also invest in demand planning accuracy to maximize their bargaining position during the frequent renegotiation windows that short-term contracts create.

What are the trade-offs of short-term contracts for shippers?

While short-term contracts preserve flexibility, they may result in higher average rates due to lack of volume commitments, reduced service priority from carriers, and administrative overhead from frequent renewals. Shippers gain agility but sacrifice some cost certainty and potential volume discounts.

Could this trend stabilize or reverse in the future?

Stabilization would require demonstrable rate predictability and reliable capacity in air freight markets. If carriers restore confidence through consistent pricing and service delivery, shippers may eventually return to longer commitments. Current data suggests that outcome remains distant.

Procurement

Moderate

Air Shippers Abandon Long-Term Contracts for Short-Term Flexibility

Oct 8, 2026

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The signal

Air freight shippers are rapidly shifting away from long-term fixed contracts in favor of shorter three-month agreements, reflecting growing uncertainty in global logistics markets. Xeneta data shows three-month contracts surged to 60% of new shipper agreements in Q3 2024, up sharply from 47% in Q2, indicating a fundamental change in risk appetite and strategic flexibility.

This trend signals that shippers no longer have confidence in stable rates or capacity availability, preferring to preserve negotiating power and adapt to volatile market conditions. For supply chain professionals, this shift requires rethinking contract strategy, forecasting accuracy, and supplier relationships to account for greater fluidity in carrier arrangements.

#air-freight

#contract-flexibility

#short-term-agreements

#supply-chain-volatility

#procurement-strategy

#shipper-preferences

#market-uncertainty

#logistics-contracts

Frequently Asked Questions

What This Means for Your Supply Chain

Simulation Suggestion

immediate

What if rates spike during contract renewals?

Simulate a scenario where carriers use frequent short-term contract renewals as leverage to impose 10-20% rate increases. Model how shippers absorb these increases, adjust sourcing strategies, or accelerate alternative modes of transport to mitigate air freight dependency.

Run this scenario

Simulation Suggestion

this month

What if 80% of shippers move to month-to-month contracts?

Simulate the impact of accelerating adoption of ultra-short-term air freight contracts, where 80% of active shippers transition from quarterly to monthly renewal cycles. Model the effect on carrier revenue stability, pricing volatility, service level commitments, and shipper ability to lock in rates.

Run this scenario

Simulation Suggestion

strategic

What if air freight capacity tightens further?

Simulate sustained capacity constraints in air freight over the next 6 months, modeling whether shippers would be forced back into longer-term contracts despite current preference for flexibility. Assess the trade-off between rate security and capacity guarantees.

Run this scenario

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