Global air cargo rates fall 8% in July amid EU tariffs, Middle East conflict

GLOBAL – Global air cargo rates have fallen 8% month-on-month in July to US$3.41 per kg, as rising fuel surcharges and geopolitical instability in the Middle East led to significant declines in shipments from China and Hong Kong, according to WorldACD Market Data.

Chargeable weight from mainland China to Europe fell 5% week-on-week in the week ended Aug. 2, while shipments from Hong Kong dropped 3%, marking a sixth consecutive weekly decline.

Volumes were down 7% year-on-year from mainland China and 24% from Hong Kong, driven largely by new European Union import rules targeting low-value e-commerce goods.

The Middle East conflict has increased pressure on the air cargo market through higher fuel surcharges and supply disruptions, while demand for capacity from sectors such as AI-related data centre infrastructure has helped keep rates elevated, according to WorldACD.

Regional Rate Declines and EU Regulations

Asia-Pacific rates fell 10% to US$4.75 per kg in July, still 29% above July 2025 levels. Spot rates from mainland China to Europe fell 29% between late June and the week ended Aug. 2, to US$3.86 per kg, while Hong Kong-Europe rates declined 15% to US$4.96 per kg.

In July, combined air cargo tonnages from China and Hong Kong to Europe fell 9% from June and 12% year-on-year.

WorldACD said the declines were largely linked to higher costs and added complexity following the EU’s removal on July 1 of tariff-free treatment for goods valued below €150 (US$173), which has particularly affected the e-commerce-heavy Hong Kong market.

Despite the recent decline, spot rates from China and Hong Kong to Europe remained slightly above year-earlier levels in the latest week, although the premium has narrowed sharply over the past three months.

Geopolitical Impact and Industry Drivers

The conflict involving Iran has further strained the market by increasing operational costs for carriers worldwide. Rates from other Asia-Pacific origins remained significantly higher year on year, including Taiwan at 33%, Vietnam at 39% and Thailand at 32%.

However, despite these monthly reductions, international shipping costs remain notably higher than last year’s levels due to persistent supply chain disruptions and high demand for technology infrastructure.

Ultimately, while the market is cooling from its recent peaks, inflationary pressures continue to keep air cargo prices above historical averages.

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