Freighter squeeze persists as next-year air cargo demand set to rise 5%

Air cargo demand is forecast to grow by 5% or more next year, but rising yields have not kept pace with soaring fuel prices, squeezing freighter economics as airlines at this week’s TIACA Air Cargo Forum in Miami called for more transpacific freighter capacity.

The growth case rests heavily on AI-sector demand, which continued well beyond the point when the industry normally eases after the seasonal rush. The word “peak” was seldom heard around the forum. Capacity-growth expectations were mixed, yet airlines were calling for freighter capacity in a segment normally risky to expand. Capacity is the constraint.

Freighter conversions have shot up in price, while delivery dates stretch several years into the future. For this rush, that timetable may already be too late. Rumors in Miami suggested Boeing might not use its FAA exemption to keep delivering the current 777 freighter beyond 2027, although the claim remained unconfirmed.

E-commerce freight continued to take space. Volume had declined on some lanes, but it had not left the picture. The near-term risk therefore lies less in a sudden collapse in shipments than in an inability to move everything the market can generate.

What does capacity scarcity change for shippers?

In a tight market, forwarders become more consequential. Shippers sent a straightforward message: “Help us when things go wrong, and we will remember when it is time to award the next contract.” The commercial mechanism is service through disruption, not simply the lowest quoted rate.

One shipper rewarded a forwarder that protected agreed rates during a capacity crunch instead of joining the queue to add a surcharge. Others wanted practical alternatives when disruption struck. Loyalty still has commercial value, even when procurement systems struggle to score it.

Shippers also showed little enthusiasm for “yet another” dashboard. A well-displayed problem remains a problem, though a precise amber status can show where a shipment stands. Visibility helps; it does not add lift or solve the underlying squeeze.

The commercial test for airlines

Space itself can close a sale, but availability alone will not keep the customer. One forwarder came away from a string of airline meetings unimpressed, finding little innovation and little to get excited about in the offerings.

That leaves airlines with an awkward commercial test. Carriers need to give customers a reason to stay after the shortage eases, while forwarders need workable answers when schedules fail. Sought-after capacity can mask a thin service proposition for now.

New leaders take over at TIACA

TIACA was marking a leadership handover as well as a busy cargo cycle. Mammen Tharakan takes over as director general from Glyn Hughes, who remains part-time until January. Hughes said he plans to spend some time “doing life” before deciding what comes next, with plenty of invitations already waiting.

An industry accustomed to his availability may yet treat retirement as a more flexible booking system. The board hosted Hughes’s sendoff and a public roast before the event. An AI-generated image gaffe then mocked his careful avoidance of incriminating photographs, providing the outgoing director general with a distinctly digital farewell.

Roos Bakker becomes the association’s new chair, adding a younger, motivated figure to the leadership team. TIACA’s past financial problems appeared to be in the rear-view mirror, while United Cargo marked the departure of cargo chief Jan Krems.

The U.S. Airforwarders Association changed leadership after 21 years under Brandon Fried. Steve Smith, previously chief executive of Airlink, took over a role requiring relationships, persistence and the ability to listen and explain.

More than 100 students attended the TIACA event, with a raffle among the proceedings. Their presence put visible next-generation participation alongside the farewells, a contrast that suited an association talking about what comes next.

Record airline presence, fewer stands

• Organizers reported a record 100 airlines among the delegates, with particularly strong representation from the Americas.
• Attendance was put at around 3,000, although the hall did not always feel that busy.
• There were fewer stands than at the previous Miami event, but the mix felt better.
• The morning-only conference programme worked well and left afternoons free for commercial meetings.

Forwarders filled those meetings, making them busy and hard to find. New attendees said the introductions and willingness to connect people were among the event’s strengths, even when rate negotiations had been ferocious.

Cathay took the crown for best stand: centrally located, with the best coffee and the worst queues. It also served carajillos, combining espresso and liqueur with an efficiency that would have suited a congested freighter network.

Union protesters dressed as rats highlighted safety allegations against Alliance Ground International. AGI’s large stand at the main entrance to the exhibition hall made the contrast between the allegations and its brand presence impossible to miss.

Miami’s horizontal rain and lashing winds threatened outdoor yoga, pickleball and golf, but did not stop play. The weather also seemed to cast a metaphorical shadow over the following week’s U.S. midterm elections, where gloomy predictions fed expectations of more black swans than white swans.

Perishables remained a serious subject. One confidential briefing weighed alleged shortcomings of Peruvian blueberries, and the depth of interest showed why soft-fruit relationships can be commercially sensitive. The source behind that briefing stayed protected.

The forward view

Demand is there. The test is how much lift carriers can secure, how quickly conversions arrive and whether Boeing delivers the current 777 freighter beyond 2027. With forecasts pointing to 5% or more growth and delivery slots already years out, capacity risk should persist; shippers should expect forwarder service to matter as much as headline rates.