The world economy is facing intense challenges, largely because of continual fluctuations in tariff policies by the Trump Administration and their impact on supply and demand—despite the fact markets had begun to recalibrate following the global pandemic.Nevertheless, market analysts see the air cargo market stabilizing, but not growing at the same pace as previous years. Willie Walsh, director general of the International Air Transport Association (IATA), highlights this resilience against the backdrop of protectionist trade policies and tariff volatility.“As trade flows adapt to a protectionist U.S. tariff regime, air cargo has been the hero of global trade buoyed in part by robust e-commerce and semiconductor shipments to support the boom in AI investments,” says Walsh. “Notably, air cargo enabled front-loading to deliver products ahead of tariff deadlines, and it flexibly accommodated demand surges as tariffed goods normally destined for the U.S. found new markets.”IATA projects global air cargo volumes to increase by 2.4% year-over-year, reaching approximately 71.6 million tonnes in 2026. Cargo revenues are projected to rise 2.1% to $158 billion, up from $155 billion in 2025.IATA figures for year-on-year in October 2025 indicate that the Asia-North America trade lane contracted for the sixth month in a row, while there was double-digit or near double-digit growth within Asia, between the Middle East and Europe, and between Europe and Asia.“China-Europe is the significant change,” says Brendan Sullivan, IATA’s head of cargo prior to the organization’s World Cargo Symposium. “China is incredibly important, especially to e-commerce. Previously, many goods were going to the United States or via maritime. This is a new opportunity, but carriers must manage the risk.”WorldACD Market Data statistics show that global air cargo demand and prices had broadly stabilized in the third full week of 2026 after completing their recovery from the annual end-of-year slump, ahead of a brief expected further uplift in demand from Asia Pacific origins prior to the Lunar New Year period in the second half of February.The Middle East and South Asia (MESA) is one region of origin recording significant year-on-year tonnage growth since last July. That continued into 2026, reports WorldACD, including in week 4, in which ex-MESA tonnages were up by +10%, year-on-year, including a +11% rise to the U.S. and +7% increase to European markets.Despite higher tariffs imposed on India by the U.S. in the second half of 2025, the biggest origin market within that region, India, recorded strong year-on-year growth in tonnages to the U.S. in the final two months of 2025. And that growth continued into January, including a +15% year-on-year increase in week 4, says WorldACD.Asia-Pacific carriers are experiencing strong growth in 2025-2026, with cargo demand up 5.6% driven by e-commerce and regional manufacturing. For example, Cathay Pacific Cargo carried 10% more cargo in November 2025, according to the latest figures available. Available freight tonne kilometers (AFTKs) increased by 7% in the first 11 months of 2025—the total tonnage increased by 10% compared with the same period of 2024.“Our cargo business continued to record month-on-month and year-on-year growth in November, driven by solid exports from our home market and the Chinese Mainland, alongside growth across our Southeast Asia and South Asia, Middle East and Africa routes Cathay,” says Cathay Pacific’s chief customer and commercial officer Lavinia Lau. She added how Cathay Cargo saw a robust air cargo peak that continued into December.Carriers are addressing the demand by using underutilized fleet from the China-U.S. trade lane. But capacity is a challenge. IATA points out how freighter fleet utilization is almost at an all-time high, and supply chain issues, caused by mounting regulatory and geopolitical pressures, mean freight conversions have slowed.In addition, Boeing and Airbus, affected by engine shortages, are slow to deliver new freighters. Airbus has pushed delivery of its A350F from 2025 to the second half of 2027. Delivery of Boeing’s 777-8F is pushed to 2028 and the program is facing continued setbacks.Going forward, air cargo volumes are also expected to be affected by shrinking consumer buying power.Industry analyst Xeneta finds that global air cargo demand finished a tumultuous 2025 on a high with volumes up +6% year-on-year in December, but warns that flattening e-commerce shipments ex-China will create concern for airlines and forwarders reliant on consumers’ online buying sprees. A more regulated landscape being led by the U.S. and Europe, is contributing to pressure on e-commerce.Better-than-expected volumes over the last quarter of the year helped air cargo demand record +4% growth in chargeable weight year-on-year for 2025, reflecting many shippers’ willingness to shift away from other modes to the speed and reliability of air cargo during times of disruption and economic uncertainty.“Last year had something for everyone,” says Xeneta’s chief airfreight officer Niall van de Wouw, “with service providers benefitting from higher volumes than expected earlier in the year, and shippers gaining from lower rates in the second half of the year.”Having predicted up to +4% market demand growth for 2025, Xeneta sees a more cautious outlook for 2026, forecasting, like IATA, a slightly more modest +2-3% rise in volumes this year. Among key 2026 air cargo market trends are rate softening caused by capacity being projected to exceed demand. “This will lead to a downward pressure on airfreight spot rates,” says, van de Wouw.IATA’s December Global Outlook reports that air cargo demand will continue to grow, although at a slower pace than in 2025, reflecting the softening of global trade.“While trade growth may slow in 2026, air cargo is well-positioned to remain robust, benefiting from artificial intelligence, hardware-driven investment, growing demand for high-value, time-sensitive goods, and the structural shift toward e-commerce,” the report detailed. However, the association warns that protectionist trade policies are a concern to more rapid development.IATA finds that total industry revenue is expected to reach $158 billion. Although yields are expected to see a slight decrease (-0.5$ compared to 2025), they remain roughly 30% higher than pre-pandemic levels.IATA stresses that strong demand is expected to continue despite broader slowdowns in global trade. The associations also points to how air cargo carriers are adjusting to changing trade routes and the increased need for flexibility in response to shifting global trade patterns prompted by new and continuing changing tariff policies by the Trump Administration.

Dive Brief:

• UPS reduced the average daily volume it delivered for Amazon by 500,000 pieces in Q1, advancing the carrier's plan to cut its Amazon volume in half by June, CEO Carol Tomé said on a Q1 earnings call Tuesday.

• Amazon made up 8.8% of UPS' total revenue at the end of the quarter, Tomé said, down from 10.6% in 2025. Despite the large-scale volume reduction, she said UPS wants to continue its work with Amazon, particularly in the product returns space.

• "Returns are the nemesis of anybody who's in the e-commerce space," Tomé said. "In fact, 19% of all e-commerce sales are returned. And so with our great reverse network, the capabilities that we have for box-less, label-less returns, that relationship with Amazon is just going to continue to grow."

Dive Insight:

With fewer Amazon packages to deliver, UPS made further progress in slimming down its network in Q1. The company closed 23 buildings and reduced nearly 25,000 operational positions year over year, EVP and CFO Brian Dykes said. UPS is also buying out roughly 7,500 drivers through its "Driver Choice Program," with 77% of departures leaving in April, Tomé said.

"Interest in the program was extremely strong and ultimately exceeded our expectations," she said, adding that more drivers applied than UPS could accept.

UPS will have a "more agile and more automated network" in the second half of the year following the completion of its Amazon volume reduction and related network adjustments, according to Dykes. The company has automated nearly 68% of its buildings in a push to handle packages more cost effectively, Tomé added.

Going forward, UPS also plans to focus on winning more profitable volume among smaller companies, business-to-business shippers and complex healthcare customers, Tomé said.

UPS has already made progress on that front, with small and medium-sized businesses making up 34.5% of UPS' U.S. volume in Q1, up from 31.2% in Q1 2025. Additionally, UPS achieved its first-ever $3 billion quarter for healthcare revenue, Tomé said. She highlighted direct-to-consumer shipments of GLP-1 drugs as an area where the company leads the market.

"We won't forget healthcare ever, because healthcare is such an important part of our growth engine," Tomé said. "It is in every segment of our business with double-digit operating margins, and we're going to continue to lean into that space in a meaningful way."

Rival FedEx is pursuing a similar strategy, distancing itself from general e-commerce volume while emphasizing higher-value shipments in segments like healthcare.

This article was written by Max Garland from Supply Chain Dive and was legally licensed through the DiveMarketplace by Industry Dive. Please direct all licensing questions to legal@industrydive.com.

Report release and publisher background

Waterloo, Ontario-based Descartes, a provider of on-demand logistics software delivered as a service, has published the latest edition of its Global Shipping Report. The release is the report’s 56th edition, tracing the series back to its first issue in August 2021.

March U.S.-bound container volumes and rankings

March U.S.-bound container imports totaled 2,353,611 TEU (Twenty-Foot Equivalent Units). That level represented a 12.4% increase from the prior month and a 1.1% decline versus March a year earlier, marking the fourth-highest monthly total on record.

February comparison and broader volume trends

In its prior edition, Descartes had reported that February imports fell 9.7% from January and were down 6.5% compared with the same month a year earlier. The firm said March’s rebound is consistent with normal seasonality after February’s dip, and reflects steady underlying demand amid ongoing policy and geopolitical uncertainties.

The report also noted that volumes remain well above pre-pandemic levels, up 32.3% relative to March 2019, while year-to-date imports through March were down 4.8% versus the prior year.

Risks, responses and industry commentary

Jackson Wood, Director of Industry Strategy at Descartes, warned that escalating tensions in the Middle East, changes in U.S. tariff policy and shifting global trade dynamics are adding volatility to routing, costs and sourcing choices. He said importers are responding by diversifying suppliers beyond traditional trade lanes, adjusting routing strategies to mitigate geopolitical risk, and using data and technology to make faster, better-informed decisions in a more complex trade environment.

China-origin imports and Lunar New Year timing

Containers arriving in the U.S. from China totaled 711,652 TEU in March. That figure was 2.3% lower than January and down 1.1% year over year. It was also 30.4% below the peak of 1,022,913 TEU recorded in July 2024.

China’s share of total U.S. imports stood at 30.2% in March, a 4.6 percentage-point decline from February. Descartes observed that the drop in China-origin volumes may partly reflect lingering effects from the 2026 Lunar New Year, which ran from February 17 through March 3; typical transit times of 30 to 50 days can shift production slowdowns into March arrival data.

Top 10 source countries and notable month-to-month movers

Imports from the top 10 countries of origin rose 8.2% sequentially in March, an aggregate gain of 122,671 TEU. Two countries accounted for much of that increase:

• Italy, up 74.5%, adding 25,565 TEU
• Thailand, up 25.6%, adding 24,682 TEU

Additional report items

The Descartes Global Shipping Report contained other key findings beyond the items summarized here. The excerpt provided did not include those additional specifics.