According to The Loadstar, air cargo carriers are navigating a complex balancing act as spot rates soften on key trade lanes while jet fuel prices surge, capacity deployment grows increasingly selective, and geopolitical tensions reshape route networks.
Spot Rates Cool from Record Highs
The Baltic Air Freight Index fell 3.1% in the week ending 20 July 2026 — led by steep declines in outbound pricing from Asia and Europe. Hong Kong outbound dropped 6.3% week on week, Frankfurt fell 5.2%, Shanghai slipped 1.1%, and Singapore eased 0.6%. Despite the weekly softening, the index remains 17% higher year-on-year overall, with Shanghai up 23.9%, Chicago +29.7%, and Singapore +29.8%.
TAC Index lane data through mid-July confirms broad-based easing: China-Europe rates declined 5.8% week on week; China-US slipped 3.9%; Hong Kong-Europe fell 4.8%; and Hong Kong-US eased 3.6%. Vietnam recorded some of the sharpest drops — rates to Europe down 8.8% and to the US down 13.3%.
Geopolitics Drives Asymmetric Capacity Shifts
Global freighter capacity rose just 1% week on week to 23 July, according to Rotate — underscoring airlines’ growing selectivity in deployment. Sharp reductions occurred on Middle East-linked routes, including Hong Kong-Dubai, Dubai-Liège, Hong Kong-Bahrain, and Bahrain-Liège, reflecting persistent regional instability.
Forto, a forwarder, observed:
“Despite increased global capacity, available cargo space continued to vary considerably by route. Airport bottlenecks and airspace restrictions, resulting from tensions in the Middle East, limited capacity on some routes, forcing airlines to reroute services and reallocate aircraft.” — Forto
Christopher Braun, Forto’s director freight, added:
“The modest increase in global capacity should not obscure the fact that cargo space remains very unevenly distributed. For shippers, the global average is less important than whether sufficient capacity with the required service level is available on the specific tradelane they need, at the right time. Early bookings and flexible routing remain the best protection against capacity shortages and sudden price spikes.” — Christopher Braun, Forto’s director freight
Airlines Adjust Networks Amid Rising Costs
Carriers are actively reshaping their networks. Etihad Cargo launched a second weekly freighter service to Paris Charles de Gaulle, citing sustained demand for pharmaceuticals, perishables, and specialist cargo. In contrast, Cathay Pacific postponed its planned resumption of the Riyadh freighter service amid deepening Iran-related tensions.
Chinese airlines were among the largest capacity gainers that week: China Airlines, EVA Air, China Cargo Airlines, and SF Airlines all increased freighter activity. Meanwhile, Cathay Pacific announced higher cargo fuel surcharges effective 1 August following a sharp rise in jet fuel prices.
The latest IATA jet fuel monitor — covering the week ending 17 July — reported the global average jet fuel price jumped 17.6% week on week to $149.40 per barrel.
Long-Term Investment Continues Amid Volatility
Despite short-term headwinds, carriers are doubling down on long-term infrastructure. MSC Air Cargo placed an order for five Boeing 777-8 freighters at the Farnborough International Airshow. Alaska Airlines confirmed plans to effectively double its dedicated freighter fleet capacity next year with four additional 737-800 converted freighters.
DSV expanded its dedicated air network with a new scheduled Rockford–Incheon freighter service, with Chennai set to follow later this year. In Latin America, Azul announced four more A321 passenger-to-freighter conversions. UAE-based SolitAir secured UK regulatory approval ahead of international expansion.
The convergence of easing spot rates on select lanes, rising fuel costs, and dynamic capacity reallocation reflects an industry adapting to volatility — not retreating from growth. Demand fundamentals remain intact, as evidenced by sustained investment across geographies and aircraft types.
Source: The Loadstar
Compiled from international media by the SCI.AI editorial team.
