If you've been watching air freight rates lately, you might have let out a small sigh of relief. After months of relentless increases, the numbers are finally starting to edge down.
But before you start celebrating, here's the catch: your actual shipping costs probably aren't falling as fast as the headlines suggest. And the reason is sitting right there in the fuel tank.
The Numbers Tell a Confusing Story
Let's look at the data. The global Baltic Air Freight Index fell for a fourth straight week through July 20, dipping 3.1% week-on-week. Rates from major Asian hubs like Hong Kong and Shanghai declined – Hong Kong outbound dropped 6.3% in a single week.
On the surface, that sounds like good news. Rates are easing. The market is cooling.
But here's what that headline doesn't tell you: global air freight rates are still up 17% year-on-year. And on some key transpacific lanes, the numbers are even steeper – Chicago rates are up nearly 30% compared with last year.
So yes, rates have softened from their peak. But "softened" is not the same as "cheap."
The Real Culprit: Jet Fuel
Here's where things get interesting. Despite the easing rates, jet fuel prices have been on a tear. According to Platts data cited by the IATA Jet Fuel Price Monitor, jet fuel prices were up a staggering 65.9% year-on-year as of July 17. The global average jet fuel price climbed to $149.4 per barrel for the week ending July 17, up sharply from $127 just a week earlier.
Cathay Pacific just announced it would raise cargo fuel surcharges from August 1 – the first increase since April. For long-haul cargo departing Hong Kong, the surcharge will jump to HK$10.10 per kg. And they're not alone. Carriers across the board are passing these costs on.
So here's the paradox: rates are drifting down, but fuel surcharges are climbing back up. For shippers, the net effect is that your total air freight bill isn't dropping nearly as much as you'd hope.
Demand Isn't Going Away
The other piece of this puzzle is demand. Despite everything – Middle East disruptions, capacity constraints, sky-high fuel – the air cargo market just keeps humming.
Xeneta dramatically revised its 2026 outlook. Back in December, they forecast long-term rates would fall 5% to 10% this year. Now? They expect rates to rise 5% to 15%. The Middle East conflict removed 12% of global air cargo capacity overnight in late February. Supply grew just 1% in the first half of the year, while demand grew 4%.
The result? Combined spot and contract rates rose 17% year-on-year in the first half of 2026. Spot rates climbed around 40% in May before stabilising.
As Xeneta's chief airfreight officer put it: "Demand keeps defying gravity".
What's Driving All This?
Two big trends are pulling air cargo in opposite directions.
On one side, AI-related demand is booming. Global semiconductor sales more than doubled year-on-year in April – up 106%, the strongest growth since records began in 1986. AI hardware and semiconductor shipments are concentrated on the transpacific, now the year's strongest trade corridor.
On the other side, e-commerce demand has stalled. China's low-value e-commerce exports fell 7% year-on-year in May – a sixth consecutive monthly decline. The EU's removal of the €150 duty-free threshold on July 1 has only accelerated that trend.
So what you have is a market where traditional e-commerce volume is shrinking, but high-value tech cargo is booming. That's a fundamental shift in the type of freight moving by air – and it changes how shippers need to think about their logistics strategy.
The Balancing Act Shippers Face
Here's the reality for anyone shipping by air right now: you're caught between easing base rates and rising fuel surcharges. Your total cost isn't dropping as fast as you'd like. Capacity is still tight on key lanes. And the geopolitical situation remains a wild card – renewed Middle East disruption or another ocean-to-air modal shift could trigger an early peak season as soon as September.
That's a lot of moving pieces. And in a market this unpredictable, having a logistics partner who actually understands the nuance makes all the difference.
This Is Where Experience Pays Off
At Xiamen AE Global, we've been navigating exactly this kind of complexity since 2018. We're a government-licensed company approved by IATA, FIATA, FMC, and NVOCC. That's not just alphabet soup – it means we have the credentials, the global network, and the operational know-how to keep your cargo moving even when the market is doing backflips.
With a network of over 100 overseas agents worldwide, we handle a comprehensive range of services including airfreight, ocean freight, customs clearance, warehousing, and more. When capacity tightens on one lane, we have the relationships to find alternatives on another. When fuel surcharges spike, we help you understand what you're actually paying for – and how to optimise your shipment to minimise the impact.
Real Visibility in a Chaotic Market
We've invested heavily in technology that gives our clients actual transparency into their shipments – not just a tracking number that sits there while your cargo waits somewhere. When a disruption hits, we don't just send an automated alert. We call you with options.
And because we're based in Xiamen – one of China's busiest port cities – we have boots on the ground at the source of Asia's supply chains. With over a decade of experience in freight forwarding and logistics, we've handled everything from standard consumer goods to complex project cargo. We offer DDU and DDP air freight services that take the guesswork out of last-mile delivery.
The Bottom Line
The air freight market is in a strange place right now. Rates are easing, but fuel costs are climbing. E-commerce is slowing, but AI cargo is booming. Capacity is recovering, but geopolitical risks could flip the script at any moment.
In a market this complicated, you don't need a forwarder who just books space on a plane. You need a partner who understands the nuance – who can explain why your bill isn't dropping as fast as the index suggests, and who has the relationships and experience to find you the best possible solution.
At Xiamen AE Global, we don't just move boxes. We help you navigate the chaos – so you can focus on your business, not on decoding the latest freight index.
Ready to take the guesswork out of your air freight strategy? Contact Xiamen AE Global today for a personalised shipping solution that balances speed, cost, and reliability – no matter what the market throws at you.
