Why has trans-Pacific air cargo demand grown for eight consecutive months?

According to IATA senior economist Marie Owens Thomsen, stronger global trade and manufacturing have provided support, while AI-related shipments have been a key driver of double-digit growth. September marked the fourth time in six months that demand increased at double-digit rates, with every month since April seeing at least 8 percent growth.

How are carriers managing profitability amid rising fuel costs and capacity constraints?

Carriers are attempting to raise yields (revenue per unit): yields increased 2 percent sequentially in September and were 25.9 percent higher year-over-year. However, Thomsen noted that 'yields have not kept pace' with jet fuel prices, which doubled year-over-year. The capacity squeeze (global load factor rose to 47.9 percent) provides pricing power, but fuel cost inflation remains a structural headwind to profitability.

How are EU tariffs and restrictions affecting global air cargo flows?

The EU's ending of its duty-free low-value imports threshold, combined with a new 2-euro handling fee on all e-commerce imports from outside the bloc, has significantly redirected cargo. From Asia-Pacific to the EU, chargeable weight fell 16 percent year-over-year in week 43. From Hong Kong alone, volumes have dropped 33 percent since July. This diversion is pushing more cargo to North America, which saw a 9 percent annual volume increase.

What is constraining Middle East and South Asia air cargo capacity?

Houthi missile strikes forced the closure of King Khalid International Airport in Riyadh on October 10. As of late October, the airport was operating at only about 6 percent of normal capacity, with most foreign carriers still suspended into November. Gulf capacity is down 19 percent since late February due to regional security disruptions.

Are spot rates likely to remain elevated on trans-Pacific lanes?

Yes. Global spot rates rose 5 percent week-over-week to $3.80 per kg as of late October and were 38 percent higher year-over-year. U.S.-bound cargo reached $7.43 per kg, up 41 percent annually. The combination of tight capacity (Asia-Pacific demand up 8.6 percent against capacity growth of 4.9 percent) and persistently high fuel costs (averaging $184.50 per barrel in September) suggests rate pressure will likely persist through the near term.

Shipping & Freight

High Impact

Trans-Pacific Air Cargo Booms 17%, But Capacity Crunches Squeeze Rates

Nov 3, 2026

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The signal

Air cargo demand on the trans-Pacific route between Asia and North America grew 17 percent year-over-year in September, marking eight consecutive months of growth and driven in part by AI-related shipments. However, this robust demand is colliding with constrained capacity: global air cargo capacity grew only 2.7 percent compared to demand growth of 7.7 percent, creating a supply crunch that has lifted cargo load factors to 47.9 percent globally.

The capacity squeeze is most acute in the Asia-Pacific region (load factor 50.7 percent) and is pushing spot rates higher, with U.S.-bound cargo seeing a 41 percent year-over-year jump to $7.43 per kg. Simultaneously, jet fuel prices have more than doubled year-over-year to $184.5 per barrel (up 103 percent from $90.7 a year ago), driven by geopolitical disruptions at the Persian Gulf and Strait of Hormuz.

This cost inflation is squeezing carrier profitability despite higher yields, creating a paradoxical situation where shippers face elevated rates but carriers struggle to cover escalating operating expenses. Supply chain professionals face a dual challenge: demand remains robust, but capacity tightness and fuel costs are reshaping the economics of cross-Pacific air freight.

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What This Means for Your Supply Chain

Simulation Suggestion

this month

What if Middle East capacity disruptions persist through Q1 2025?

Simulate the impact of sustained 19 percent capacity reduction in the Persian Gulf region due to extended Houthi-related airport closures. Model rerouting of cargo through alternative Middle Eastern hubs and impact on Asia-Europe-North America logistics networks. Calculate cascading effects on transit times, utilization rates across competing gateways, and rate escalation on alternative routings.

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strategic

What if jet fuel prices spike another 50 percent from current $184.50 baseline?

Simulate air cargo economics under a scenario where jet fuel reaches $276 per barrel due to escalating Persian Gulf disruptions. Model the impact on carrier yields, profitability margins, and route viability. Calculate forced capacity reductions, service reductions on low-margin lanes, and rate escalation requirements to maintain acceptable return thresholds. Compare breakeven analysis across trans-Pacific, intra-Asia, and Europe-North America routes.

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Simulation Suggestion

this month

What if EU tariff policies spread to other regional trade blocs?

Simulate regulatory contagion scenario where UK, ASEAN nations, or other blocs adopt similar de minimis restrictions and e-commerce handling fees on low-value imports. Model the resulting fragmentation of global e-commerce air cargo flows, cargo rerouting to less regulated gateways, and the emergence of compliance-based logistics bifurcation. Calculate aggregate volume losses on affected trade lanes and rate-per-kg impacts.

Run this scenario

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