International air freight prices are influenced by a variety of factors, and their fluctuations also exhibit certain patterns.
In this article, Weefreight will provide a detailed analysis, hoping it will be helpful.
Factors Affecting International Air Freight Prices
Fuel Costs: Fuel costs are a core variable in international air freight prices, typically accounting for 25%-40% of an airline’s operating costs. Fluctuations in jet fuel prices directly impact air freight costs. For example, in 2024, every $1 per barrel increase in jet fuel prices will increase air freight costs by $0.02-0.03 per kilogram.
Supply and Demand: Demand factors such as the e-commerce peak season, manufacturing stocking cycles, and a surge in exports of high-value products will significantly increase transportation demand, potentially leading to higher freight rates. On the supply side, passenger aircraft bellyhold capacity accounts for 45% of the industry’s total cargo capacity. During peak travel season, passenger baggage takes up bellyhold space, leading to reduced cargo capacity. Furthermore, grounding of cargo aircraft due to malfunctions can also impact capacity and, in turn, prices.
Cargo Attributes: Airlines calculate freight rates based on the higher of the cargo’s actual weight and volumetric weight. Furthermore, special cargo, such as dangerous goods, temperature-controlled cargo, and live animals, requires specialized handling and transportation equipment, leading to increased costs. For example, lithium batteries require UN38.3 certification, increasing transportation costs by 15%-25%; pharmaceutical cold chain operations require specialized equipment, increasing costs by 30%-50%.
Geopolitical: Changes in tariff policies, such as concentrated shipments by companies before the US imposed tariffs on China, can lead to price fluctuations on China-US routes. Airspace restrictions can affect flight routes and costs. For example, following the Russia-Ukraine conflict, European airlines have been flying around Russian airspace, increasing flight times on Asia-Europe routes and raising fuel costs. Environmental regulations, such as the EU’s “Fit for 55” policy, require airlines to purchase carbon credits, increasing compliance costs and indirectly driving up freight rates.
Exchange rate fluctuations: The US dollar is the settlement currency for air freight, and exchange rate fluctuations directly impact business costs. For example, if the RMB depreciates against the US dollar, Chinese exporters will actually pay more for air freight.
Airline Strategies and Industry Concentration: Leading airlines adjust prices in real time through dynamic revenue management systems, potentially charging premiums during peak freight periods. Industry concentration also influences pricing power. For example, the three largest Middle Eastern airlines control 35% of the transcontinental freight market, giving them strong bargaining power.
International Air Freight Price Fluctuations
Seasonal Fluctuations: The fourth quarter of each year, driven by peak consumer seasons like Black Friday and Christmas, leads to a surge in cross-border e-commerce package volumes and strong air freight demand. Airlines generally increase peak season surcharges by 15%-30%, with prices often peaking in mid-November. February and March are traditionally off-season, with a sharp drop in air cargo demand. Airlines often offer “fill-in specials,” but be careful to avoid the post-Lunar New Year rush to resume work, as factories are busy shipping during this period, potentially leading to a short-term price rebound.
Fluctuations due to policy influences: July and August are peak periods for fuel surcharge adjustments in the aviation industry. The International Air Transport Association typically reassesses fuel surcharges based on the six-month average of fuel prices during this period, potentially causing price fluctuations. Furthermore, new policies and regulations, such as the EU carbon tariff, which will be fully implemented in 2026 and will require additional carbon emissions fees for cross-border transport, will directly increase base freight rates on European routes.
Fluctuations due to unexpected factors: Natural disasters and emergencies can disrupt flight operations, leading to price spikes. For example, Southeast Asian routes during the typhoon season in September and North American routes during extreme cold weather in January are both subject to potential price spikes due to flight cancellations.
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