Air Cargo Industry Wary of Tariffs Amid Positive Outlook in 2025

Global trade growth, declining fuel costs, and the expansion of e-commerce continue to present positive prospects for the air cargo industry.

However, concerns persist over the potential impact of tariff-driven trade policies under the Trump Administration in the United States.

According to the latest data from the International Air Transport Association (IATA), global air cargo demand, measured in cargo tonne-kilometres (CTK), increased by 3.2% in January compared to the same period in 2024 (3.6% for international operations), marking the 18th consecutive month of growth.

Meanwhile, cargo capacity, measured in available cargo tonne-kilometres (ACTK), rose by 6.8% year-on-year (7.3% for international operations).

“January marked the 18th consecutive month of growth for air cargo, but the 3.2% year-on-year increase reflects a moderation from the double-digit peaks witnessed in 2024,” said Willie Walsh, IATA’s Director General.

“Similarly, while yields remain above January 2024 levels, they declined by 9.9% from December, alongside a 1.5 percentage point drop in cargo load factors.

"External factors such as trade growth, lower fuel costs, and expanding e-commerce remain favourable for air cargo, but it is crucial to monitor evolving market conditions. The potential for tariff-driven trade policies under the US Trump Administration remains a significant uncertainty. Fortunately, the air cargo industry has demonstrated resilience in navigating shifts in the operating environment."

Despite facing multiple headwinds, the air cargo sector has continued to chart a steady course toward growth. The potential imposition of US trade tariffs presents the latest challenge, with possible long-term implications for cargo volumes.

In the short term, however, there may be an uptick in shipments as businesses accelerate deliveries ahead of tariff implementation.

Following a double-digit increase in CTKs in 2024, the air cargo sector now accounts for 15.6% of total industry revenues, up from 12% in 2019. Growth has been observed across all regions and major trade routes.

With global trade and GDP growth projected to remain stable at approximately 3%, 2025 is poised to be another strong year. IATA forecasts industry revenues to reach $157, driven by an anticipated 6% increase in demand.

Additionally, air cargo yields remain about one-third above 2019 levels, with no indication of a return to pre-pandemic rates. “It appears there has been a structural improvement in the market since the pandemic,” Brendan Sullivan, IATA’s Head of Cargo said recently.

The strength of e-commerce is a key growth driver, with the sector expected to represent an increasing share of air cargo business. Currently accounting for approximately 20% of industry-wide cargo shipments, e-commerce is projected to expand to at least one-third of all shipments in the coming years.

By 2027, the e-commerce market is expected to reach $8tn, positioning the air cargo sector for significant gains if it can effectively adapt its offerings.

Sustainability initiatives also play a crucial role in the industry's future. Circular economy principles, such as optimising the lifecycle of Unit Load Devices (ULDs), can help reduce waste while enhancing operational efficiency.

Furthermore, Sustainable Aviation Fuels (SAF) are increasingly relevant, particularly as nearly half of all air cargo is transported in the belly hold of passenger aircraft, many of which are capable of incorporating SAF in their fuel mix.

Nevertheless, the industry remains vulnerable to external risks. The prospect of US-imposed trade tariffs remains a pressing concern, with long-term implications for cargo volumes. However, there may be an immediate surge in shipments as businesses expedite deliveries before potential tariff enforcement.

Trade tariffs must also be considered within the broader context of customs regulations. While such measures are generally unwelcome, they could serve as a catalyst for discussions on improved digitalisation and streamlined clearance processes, addressing a longstanding challenge for the sector.

Operating within a highly interconnected global environment, the air cargo industry remains susceptible to geopolitical tensions, including trade disputes, economic sanctions, armed conflicts, and regulatory changes.

As such, adaptability and resilience will be critical in navigating the evolving landscape and ensuring continued growth.