If you've been watching air freight markets lately, you've probably noticed something that doesn't quite add up.
Jet fuel prices are through the roof. The spot price of U.S. Gulf Coast kerosene-type jet fuel hit $4.03 per gallon back in late April – nearly double what it was a year ago. IATA expects jet fuel to average $152 per barrel in 2026, up a staggering 69% from 2025. And as of mid-July, jet fuel prices were still up a whopping 65.9% year-on-year.
So naturally, air freight rates should be climbing too, right?
Wrong. They're falling.
The numbers don't lie
The Baltic Air Freight Index fell for four consecutive weeks through mid-July, dropping 3.1% in one week alone. Rates out of Hong Kong tumbled 6.3% week-on-week. Shanghai outbound rates dipped too. And global air cargo volumes declined 3% week-on-week in late July, with Asia Pacific volumes down 5%.
In other words: fuel is up, demand is softening, and rates are heading south anyway.
What's driving the disconnect?
The short answer is supply and demand – not fuel costs.
Xeneta's chief airfreight officer put it bluntly: freight rates don't necessarily need to increase just because jet fuel prices have risen. "The all-in cost a freight forwarder pays an airline is more driven by demand and supply than it is by fuel costs," he said.
Here's what's actually happening. After the Iran conflict escalation in February sent the market into panic mode, capacity is gradually coming back online. Airlines are restoring freighter lift. Passenger belly capacity – particularly on Transatlantic routes – has flooded the market as summer schedules kicked in, pushing cargo load factors down and dragging rates with them.
The result? A market that's no longer spiralling upward, but has clearly found a new, elevated pricing floor. Rates remain well above pre-conflict levels – the global Baltic index was still up 17% year-on-year in mid-July – but the direction of travel is unmistakably downward.
What this means for shippers
For cargo owners, this creates a tricky picture.
On one hand, falling rates are welcome news. On the other hand, the market is anything but predictable. Fuel volatility is creating real challenges for shippers trying to forecast costs. And while overall rates are trending down, some lanes are moving in the opposite direction – transpacific rates from Bangkok, Vietnam, Malaysia and Korea actually increased recently, supported by stronger demand.
Then there's the capacity question. Gulf carriers like Qatar, Emirates and Etihad – all major cargo players – still haven't fully returned to the market. Up to 30% of their capacity remains offline. That's a lot of lift that's not available, even as other carriers step in to fill the gap.
This is where experience actually matters
Navigating a market this contradictory requires more than a booking platform and a prayer. It requires relationships, real-time intelligence, and a partner who understands that published rates don't always tell the full story.
At Xiamen AE Global, we've been moving air freight through exactly this kind of complexity since 2018. We're a government-licensed company with IATA, FIATA, FMC, and NVOCC credentials – which means when the market shifts, we have the global network and the carrier relationships to secure space for our clients, even when capacity is tight.
1. Real relationships, real options
With over 100 overseas agents worldwide, we don't just watch the rate indices from a distance. We work directly with our partners on the ground to understand what's really happening on each trade lane. When fuel surcharges spike or carriers adjust their networks, we know about it – and we adjust our clients' strategies accordingly.
2. Technology that cuts through the noise
We've invested heavily in technology that gives our clients real visibility into their shipments – not just a tracking number, but actual insight into what's happening with capacity, schedules, and alternatives. When a lane softens or a surcharge hits, we don't wait for you to find out the hard way. We alert you immediately and present options.
3. Local knowledge, global reach
Based in Xiamen – one of Asia's busiest air cargo hubs – we combine the global reach of an IATA and FIATA-approved forwarder with the local knowledge of a partner who's been shipping all kinds of goods for over a decade. We've moved over 12,000 TEUs in a single year with a 98.6% on-time delivery rate for our SME clients. That's not luck – it's the result of relentless execution and a network that doesn't fall apart when the market gets complicated.
The bottom line
Air cargo is in a strange place right now. Fuel is historically expensive, but rates are sliding. Demand is softening in some regions, but staying firm in others. Capacity is returning, but not evenly.
For shippers, that means opportunity – but also risk. The difference between a smooth supply chain and a costly headache often comes down to one thing: who you've got on your side.
At Xiamen AE Global, we don't just move boxes. We help our clients navigate complexity – whether that's understanding why rates are falling despite higher fuel costs, securing space on a tight lane, or simply making sure your cargo gets where it needs to go, on time and on budget.
Because when the market doesn't make sense, you don't need a spectator. You need a partner who's already in the game.
Ready to work with a logistics partner who actually understands the market? Contact Xiamen AE Global today – and let's keep your supply chain moving, no matter what comes next.
