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Airlines are rationalising cargo capacity on tariff-affected trade lanes to the US following a wave of front-loading in July, according to freight forwarder CH Robinson.
The forwarder said that airfreight markets are experiencing widespread capacity rationalisation after airlines in July added capacity on routes to the US ahead of increases in tariffs due to come in during August.
”With most importers having completed inventory buildup in July, carriers now face the challenge of right-sizing capacity to match new demand levels,” CH Robinson said.
The forwarder explained that the capacity correction is particularly evident in markets where tariff-related inventory rushing created temporary capacity shortages earlier this year.
”Carriers are implementing flight cancellations and route diversions to fill remaining services and maintain profitability,” the forwarder said.
Services between Asia and the US have been particularly affected by demand weakening following July’s front-loading, as companies had filled inventories faster than expected.
“Asian carriers are particularly affected as the traditional peak season for electronics and consumer goods shipments to US and European markets has been disrupted by the frontloading cycle, forcing airlines to reassess capacity allocation across their networks,” the company explained.
Services from China and Hong Kong have also seen e-commerce demand hit by the US ending the de minimis exemption.
However, there are some positives on the trade lane.
”Premium air shipments remain strong, including artificial intelligence servers and cryptocurrency mining equipment,” CH Robinson said.
“However, this specialised cargo represents a relatively small portion of total market volume, and overall market conditions suggest rates will stabilise or decline as carriers compete for volumes in more price-sensitive segments.”
The tariff truce between the US and China was due to expire on 12 August but was extended for another 90 days at the last minute.
The extension means the US will apply a 30% tariff rather than the 145% tariff that had been threatened.
Another market that has been affected by the US’ August tariffs is Brazil, which was hit with a 50% rate on 7 August. The 50% rate is causing “immediate disruption” across key sectors.
“The agri-food, steel, coffee, citrus, and aerospace industries are seeing U.S. importers cancel or postpone air shipments, creating a sudden capacity surplus on Brazil-U.S. routes,” CH Robinson said, adding: ”While US trade disruptions may temporarily improve space availability, rate volatility is expected as carriers adjust to reduced demand patterns.”
