Latin American air cargo yields lag global surge, squeezing perishables

Latin American air cargo yields rose just 7-8% while global yields jumped 24-25%, according to WorldACD figures cited at TIACA's Air Cargo Forum in Miami — a gap that captures the core problem facing perishables shippers: they cannot pass rising airfreight costs on to consumers.

Executives from Cathay Cargo, Avianca Cargo and Atlas Air, speaking to The Loadstar at the forum, warned that perishables exporters have limited room to absorb higher freight rates, raising questions over how long some products can remain commercially viable to fly. The warning lands as booming demand for AI infrastructure keeps pushing freight spending upward, with tech shippers far better positioned than flower and fruit exporters.

"Perishables are a very low-margin business, in which there is only so much the consumers will pay," said Fred Ruggiero, Cathay Cargo's VP cargo for the Americas.

Who can pay, and who cannot?

Avianca Cargo CEO Diogo Elias drew a sharp line between two categories of air cargo customer. Shippers moving AI servers are "paying whatever," he said, while flower exporters have far less scope to accommodate higher transport charges.

That imbalance shows in the WorldACD data Elias pointed to: Latin American yield growth of roughly 7-8% against 24-25% globally. The region's carriers have struggled to pass on higher fuel costs, leaving exporters and airlines to split the difference.

The risk, according to Atlas Air chief commercial officer Martin Drew, is that sustained cost increases eventually push certain commodities out of the sky entirely.

"The longer it continues, what you start to worry about is … price elasticity, where you get to a point where it's just no longer viable to send by air cargo," Drew said, naming some perishable products as potentially vulnerable to modal shift.

Why sea freight is not always the escape hatch

Shifting to ocean is not a simple answer for seasonal produce. A delayed harvest can eliminate the time available for a sea journey, forcing exporters onto aircraft precisely when their logistics plans have become hardest to execute.

"As a result of the weather, the harvest may be delayed. That means it's going to miss the fast boats, so more has to be transported by air," Ruggiero explained.

Cathay's Chilean cherry operation illustrates the complexity. Getting South American cherries to Asian consumers requires coordinated capacity across several carriers and gateways — Miami, Los Angeles or New York, then onward to Asia — with speed and temperature control critical at every leg.

"The product needs to move quickly, remaining at the optimal temperature throughout the journey. Otherwise, you're left with an awful lot of cherry juice," Ruggiero said.

Charters, connections and communication

Cathay organises those movements well before the harvest, using interline charter capacity to feed its network. "We have charters lined up with interline carriers from Chile to Miami or Chile to Mexico, so we can get them out to Asia," said Ruggiero.

The system works when the calendar holds. "If it's all planned in advance and everybody is ready to go, what happens if the crop gets delayed? There's a lot of communication involved amongst ourselves, the forwarders, the growers, and even down to the farmers," he added.

One air cargo executive at the forum described the precarious economics of a business in which a year of work can be undone by rain at the wrong moment. "I don't think I'd ever want to be in that business," the executive said.

Securing lift adds another constraint. Cathay reported capacity shortages both from Asia to the US and within Asia, and is working to secure additional capacity within the region.

What does handling expertise demand?

Once space is booked, handling requirements leave little room for improvisation, and treating all fresh produce alike can undermine the value of an expensive air journey.

"On the handling side, it takes expertise to handle perishables properly, and every type of perishable is handled slightly differently," Ruggiero said. "For example: how cold they can be, how much humidity they can withstand, and whether they can be covered or not."

For forwarders, the job means managing several moving targets at once — the harvest, connecting flights, handling conditions and a freight bill the customer can afford. A delayed crop may demand a faster journey, but it does not hand the grower more money to pay for one.

With AI-driven demand continuing to lift freight rates globally, the gap between what tech shippers will pay and what perishables margins can bear is set to widen — and Atlas Air's warning about price elasticity suggests some Latin American produce may not stay airborne for long.