IN Brief:
- Global air cargo demand increased 6% year on year in September, while available capacity rose 2%.
- Sixty percent of new third-quarter contracts lasted three months or less, compared with 25% a year earlier.
- Average global spot rates reached $3.10 per kg, while individual routes continued to move sharply differently.
Xeneta data shows air freight buyers shortening contract commitments as demand continues to grow faster than available capacity, with 60% of agreements beginning during the third quarter running for three months or less. Global air cargo volumes increased 6% year on year in September while capacity expanded by 2%, lifting Xeneta’s dynamic load factor by two percentage points to 62% and keeping pricing firm as the market moved towards its traditional fourth-quarter peak.
Average global spot rates reached $3.10 per kg during September, 27% above the same month last year and 2% higher than in August, leaving shippers with little incentive to assume that present pricing represents a stable twelve-month baseline. Three-month contracts accounted for 42% of agreements starting during the quarter, up from 16% a year earlier, while the broader group of contracts lasting three months or less reached 60% compared with 25% in Q3 2025. Twelve-month commitments fell to 25% from 40%, showing procurement moving towards more frequent repricing rather than locking current conditions into a full annual cycle.
Shorter contracts give buyers another opportunity to reset rates if capacity loosens, although they also return the shipper to the market more frequently and increase exposure when demand rises unexpectedly. An annual agreement transfers more of the rate risk into the tender decision made at the start of the term, whereas a three-month arrangement trades that stability for the chance to respond as trade flows, fuel, regulation, and aircraft capacity change. Floating mechanisms can push the balance further by linking pricing to market benchmarks without requiring a complete renegotiation every time conditions move.
Individual corridors provide ample reason for that caution because the global average conceals very different rate trajectories. China to Western Europe spot pricing increased 10% during September to $4.26 per kg, Northeast Asia to Europe rose 5% to $4.74, and Northeast Asia to North America increased 5% to $6.03, while other lanes remained softer or were driven by different capacity conditions. A procurement team buying several global routes therefore faces little benefit from treating the market as though every corridor is following the same seasonal curve.
Regulatory changes have altered some e-commerce flows sharply enough to reinforce those differences. China-Europe low-value and e-commerce exports were 40% lower year on year in August after earlier declines associated with changed European customs treatment, whereas China-US traffic increased 17% as volumes recovered following disruption around the removal of the US de minimis threshold. earlier air cargo data had already shown weaker Hong Kong-Europe e-commerce traffic, leaving carriers and forwarders to reposition capacity as some high-volume flows contract and others recover.
Middle East disruption has pushed another group of corridors in the opposite direction, with rates from South Asia into the region and from Europe to the Middle East increasing markedly from earlier-year levels. Elevated jet fuel costs have added pressure to the operating base, while AI infrastructure and technology cargo continue to support demand across selected Asia-North America routes. The interaction between those flows reduces the usefulness of a single peak-season assumption, particularly when the aircraft serving one corridor may be economically redeployed towards another with stronger yields.
Forwarders carry part of the duration risk created by shorter shipper commitments because airline capacity is not always purchased on equally short terms. A forwarder that secures block space for a season or longer may find customers unwilling to commit for the same period, leaving more pricing and utilisation risk between the upstream capacity agreement and the downstream shipper contract. Strong demand can make that position profitable, but a rapid change in rates or trade flows can leave committed space exposed before the underlying airline agreement expires.
Manufacturers and retailers can reduce their own exposure by separating strategic capacity from freight that can tolerate a more flexible buying model. Product launches, production-critical components, pharmaceuticals, perishables, and other time-sensitive consignments may justify longer commitments on constrained lanes, while less urgent or more predictable cargo can move through shorter tenders and spot purchasing where enough alternatives exist. The contract length then reflects the consequence of losing capacity rather than an arbitrary annual procurement calendar.
Ocean freight remains the principal variable capable of tightening air markets quickly during the final quarter, since port congestion, schedule unreliability, or renewed route disruption can push urgent cargo towards aircraft with little warning. A market where available air capacity grew only 2% against 6% demand has limited room to absorb a large modal shift without affecting rates, particularly on corridors already supported by technology and e-commerce volumes.
Xeneta expects a relatively subdued fourth quarter unless ocean disruption adds another demand shock, but the move towards shorter contracts suggests shippers are reluctant to rely heavily on any single forecast. Buyers are preserving the ability to return to the market sooner, accepting additional procurement activity in exchange for less exposure to a fixed rate set under volatile conditions; airlines and forwarders, meanwhile, have to decide how much long-term capacity they can commit when customers increasingly prefer not to make the same promise.
