The core factors influencing international air freight prices can be summarized into four categories: market supply and demand, basic transportation costs, cargo attributes, and service and additional demand. Peak season price increases are essentially the result of a concentrated “supply and demand imbalance” within these four categories, compounded by the amplifying effects of other costs and risks.
In this article, Weefreight will explain these core factors and the logic behind peak season price increases.
I. Core Factors Influencing International Air Freight Prices
- Supply and Demand: The Core Engine of Price Fluctuations
Air freight prices are essentially the “transaction price” of air cargo space. The “supply” of space and the “demand” for cargo directly determine price trends, representing the most fundamental influencing factor.
On the supply side, the core factor is “available space,” which is determined by the following factors:
Airline capacity deployment: The number of flights, frequency, and aircraft type (e.g., Boeing 747 freighters offer more space than 777 freighters) for belly cargo (accounting for 60%-70% of international air transport capacity) and freighters directly impacts space availability. If airlines reduce flights due to route adjustments, aircraft maintenance, or policy restrictions (such as flight bans), space availability plummets, inevitably leading to price increases.
Route scarcity: Competition for space on popular routes (such as China to Europe and the United States, and China to core ports in Southeast Asia) is fierce, while less popular routes (such as China to smaller airports in Africa) may actually be more expensive due to fewer flights and dispersed demand (fixed operating costs must be shared).
On the demand side, the core factor is “the intensity of cargo transport demand,” which is directly linked to global trade activity and industry cycles. For example:
Peak seasons for cross-border e-commerce (such as Black Friday and Singles’ Day), peak manufacturing shipments (such as before new product releases in the electronics industry), and holiday stocking (such as before Christmas and the Lunar New Year) can lead to short-term surges in cargo volumes, with demand far exceeding supply.
Sudden demand (such as the transportation of medical supplies during the epidemic or relief supplies after natural disasters) can also instantly drive up prices on specific routes.
- Basic Transportation Costs: The “Rigid Floor” of Prices
Airlines’ operating costs directly determine the “cost baseline” for air freight prices. Fluctuations in these costs are reflected in terminal quotes. These costs primarily include:
Fuel costs: Jet fuel accounts for 20%-30% of airline operating costs and is the most sensitive variable. When international oil prices (such as Brent crude oil) rise, airlines pass on these costs through the addition of a fuel surcharge (FAF). Fuel surcharges typically account for 10%-50% of the total freight, directly driving up the total price.
Airport and Ground Handling Costs: These include terminal charges (THC) at the departure/destination port, security fees, storage fees, loading and unloading fees, and more. These fees are collected by airport cargo terminals or ground handling agents and must be passed on to customers by airlines or freight forwarders. Fees vary significantly between airports (for example, ground charges at European and American airports are much higher than at Southeast Asian airports).
Labor and Operating Costs: Airline costs such as crew salaries, aircraft maintenance, air rights fees, and air traffic control fees are long-term fixed costs. Rising costs will indirectly drive up air freight prices.
- Cargo Attributes: A “Personal Variable” in Price
Cargo characteristics can affect transportation difficulty, risk, and resource utilization, leading to price differences:
Weight and Volume: Air freight is charged based on the greater of “actual weight” and “volumetric weight” (volumetric weight = length × width × height / 6000, in cm). Bulk, lightweight “bulky goods” (such as furniture and down jackets) take up more space and have higher freight rates per unit weight. Heavy goods (such as mechanical parts and metal products) are charged by actual weight and have relatively lower unit prices.
Cargo Types: General cargo (such as clothing and electronics) has the lowest freight rates; special cargo incurs additional charges, such as:
Dangerous goods (such as lithium batteries and chemicals): These must comply with strict packaging, declaration, and transportation regulations, posing a higher risk to airlines. Freight rates are typically 2-5 times higher than general cargo, and only some airlines accept them.
Perishable goods (such as seafood and fruit): These require cold chain transportation (temperature-controlled space) and are prioritized for loading. Freight rates incur a 30%-100% surcharge.
Precious goods (such as jewelry and precision instruments): These require additional insurance and a dedicated escort. The price includes insurance and service fees.
Packaging and Compliance: If the cargo packaging does not meet air transport standards (e.g., unpalletized or damaged), additional reinforcement fees will be required. Lack of compliance documentation (e.g., certificate of origin, dangerous goods identification report) may result in order change fees and late filing fees, indirectly increasing costs.
- Services and Additional Demands: The “Value-Added Premium” of Prices
Beyond basic transportation, additional customer demands can generate “surcharges,” directly driving up total costs:
Time Requirements: Expedited shipping (e.g., “next-day delivery” or “designated flight loading”) requires airlines to prioritize space, typically resulting in a 50% or greater freight surcharge. Standard delivery times (e.g., 3-5 days) are charged at the base rate.
Additional Services: These services include door-to-door pickup, port-of-destination delivery (“door-to-door” service), customs clearance, and demurrage fees (demurrage fees incurred if goods are not promptly picked up after arrival). Each service is charged separately, and service quotes vary significantly between freight forwarders.
Insurance Requirements: Air freight insurance premiums are typically charged at 0.1%-0.3% of the cargo value. If customers require higher coverage or special coverage (such as war risk or strike insurance), the premium will increase accordingly, and this cost will be included in the total quote.
II. Why Do Prices Increase During Peak Season? Essentially, It’s “Supply-Demand Imbalance + Cost Accumulation”
The “peak season” for air freight typically refers to April and May (peak spring shipping season) and September to December (peak season for cross-border e-commerce and holiday stocking). The logic behind price increases during these periods is the convergence of multiple factors, which can be summarized into three key points:
- The “scissors gap” between surging demand and rigid supply
During peak season, demand for goods experiences explosive growth—cross-border e-commerce companies prepare for Black Friday and Cyber Monday, manufacturing companies ship year-end orders, and foreign trade companies rush to deliver goods before the holidays. This results in a short-term surge in cargo volume (potentially a 50%-100% increase compared to the off-season). However, space availability is inherently rigid: airlines’ flight schedules (including the number of belly-hold passenger and freighter aircraft) are typically planned months in advance, making it impossible to rapidly increase capacity in the short term (aircraft procurement, route approvals, and crew deployment all take time). Some airlines even adjust routes before peak season, reducing capacity on less popular routes and concentrating on popular routes, but this still fails to meet the surge in demand. This imbalance in supply and demand makes space a scarce resource, prompting airlines or freight forwarders to raise prices to select customers (prioritizing high-priced cargo), which naturally drives up prices.
- The “Synchronous Rise” of Base Costs and Surcharges
Peak season is not only a peak season for cargo, but also a peak season for costs:
Fuel costs may rise due to increased global energy demand during peak season, leading airlines to frequently increase fuel surcharges (for example, during the 2023 peak season, fuel surcharges on some routes increased by over 30% compared to off-season).
Ground operations pressure at airports has increased dramatically: cargo terminal sorting and loading/unloading efficiency has decreased, and cargo storage times have been extended, leading to higher storage and demurrage fees. Furthermore, ground manpower and fleet resources are strained, leading to increases in pick-up and delivery fees (for example, port delivery fees could increase by 20%-40% compared to off-season).
Freight forwarders face increased “space booking costs”: Space on popular routes must be secured in advance, and even a “space deposit” must be paid. Freight forwarders pass this cost on to their clients’ quotes.
- “Premium” Risk and Uncertainty
Transportation risks increase significantly during peak season, forcing airlines and freight forwarders to raise prices to cover potential losses:
Risk of “bounced” space: Even if space is booked, it may be canceled due to temporary capacity reductions by airlines or overweight cargo. Freight forwarders must reserve “backup space,” increasing costs.
Risk of Time Delays: Cargo accumulation reduces security inspection and loading efficiency, increasing the probability of flight delays. If customers demand compensation, freight forwarders must preemptively increase prices to mitigate this risk.
Policy and Logistics Fluctuations: Peak seasons may be compounded by strict customs inspections (such as intellectual property spot checks by European and American customs) and port congestion (such as overcrowded cargo terminals at destination ports), leading to customs clearance and cargo pickup delays and incurring additional costs (such as late declaration fees and demurrage). These costs will ultimately be indirectly reflected in the initial quote.
Summary
The core of international air freight pricing is the combined result of “supply and demand driven by fundamental costs, cargo attribute adaptation, and service demand premiums.” The essence of peak season price increases is the severe imbalance between explosive demand and rigid supply. This, coupled with the simultaneous rise in fuel and ground handling costs, as well as the “premium” added by risk uncertainty, ultimately leads to “periodic price spikes” during peak season. For shippers, the key to cost control during peak season is to book space in advance, optimize cargo packaging (to reduce the proportion of bulk cargo), and select the appropriate transportation method and a reliable freight forwarder.
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