Air Cargo Industry Lowers Growth Forecast – A New Warning for the Global Supply Chain

Global trade slowdown hits air cargo directly
The global economic outlook for the first half of 2025 has been overshadowed by US–China trade conflicts, geopolitical tensions in multiple regions, and weakening consumer demand in major markets. As a result, air cargo flows — which account for about 35% of global trade value but only around 1% of its volume — have slowed markedly.

Fuel prices and operating costs exert double pressure
Alongside weakening demand, Jet A-1 aviation fuel prices remain 15–18% higher than the 2015–2019 average, partly due to supply disruptions from major producers. Maintenance, depreciation, and labor costs have also risen significantly, as carriers maintain large fleets but operate at lower-than-expected utilization rates.

The ability to impose fuel surcharges — once a key tool to offset costs — has diminished substantially due to pricing pressure from customers and freight forwarders, particularly amid intense competition. This has squeezed profit margins from air cargo, even for carriers with strong market positions.

Major carriers adjust strategies, ripple effects reach Vietnam
To cope with the situation, major carriers such as FedEx, DHL, and Qatar Airways Cargo have proactively adjusted their route structures, reducing frequencies on low-margin long-haul routes and redeploying aircraft to shorter or medium-haul routes where demand remains steadier. Some carriers have also expanded into specialized cargo segments such as pharmaceuticals, industrial components, and perishables — markets that yield higher margins than standard e-commerce freight.

Vietnam must act proactively before the “growth winter” sets in
IATA’s lowered growth forecast demands that Vietnam quickly strengthen its air logistics capacity. This means accelerating expansion and upgrades at major airports such as Tan Son Nhat, Noi Bai, and Long Thanh to ensure the ability to secure additional international slots when the market rebounds.

It also requires investment in integrated air logistics centers offering cold storage, cargo sorting, quality inspection, and multimodal connections with road and rail. Enhancing the ability to handle high-value goods domestically will give Vietnamese companies stronger negotiating power with international carriers, reducing the risk of being underpriced or deprioritized during peak seasons.

Turning challenges into opportunities
IATA’s sharp downgrade of growth expectations shows that the global air cargo industry is facing a difficult “winter,” where low growth, high costs, and competitive pressure coexist. But for countries that use this slowdown to invest in infrastructure, streamline processes, and improve service quality, this is also an opportunity to prepare more effectively for the future.