The airfreight market across Asia is facing sustained pressure as carriers across the region grapple with surging fuel costs, tightening capacity and the cascading effects of the ongoing conflict in the Middle East, which is reshaping operational realities for shippers, freight forwarders and cargo operators throughout the region.
According to Dimerco’s April 2026 Asia Pacific Freight Report, conditions across Northeast Asia and Southeast Asia have become increasingly constrained as higher fuel costs, longer routings and service adjustments collectively reduce effective capacity. The Taiwan headquartered freight forwarder noted that rising prices are being driven primarily by market conditions rather than a broad demand surge, with rates expected to remain elevated for the foreseeable future.
Kathy Liu, Vice President of Global Sales and Marketing at Dimerco, indicated that logistics providers may implement emergency surcharges amid rising fuel costs and operational uncertainty. While demand has remained flat or slightly below 2025 levels, the combination of capacity constraints and higher fuel costs is keeping airfreight rates elevated across most regional trade lanes.
The Baltic Air Freight Index, calculated by TAC Index, has risen sharply, with particular surges on Asia Europe lanes and routes out of India. Industry sources have warned of significant further increases given the widening crack spread between crude oil and jet fuel, with jet fuel now close to double its level a year ago, and additional fuel surcharges still pending application across many flight services.
In Southeast Asia, capacity remains particularly tight as Middle East airspace restrictions force carriers to reroute services through longer corridors, reducing aircraft utilisation and effective belly capacity. Shippers in the region are now being advised to secure bookings five to seven days in advance, with rate validity periods shortening as carriers respond to the volatile operating environment. In India, airfreight rates are now valid for as little as 24 to 48 hours, requiring immediate booking confirmation upon rate quotation.
South Korea is also experiencing tight conditions, particularly on routes to South Asia where reduced freighter supply combined with strong demand has limited available space. Fuel surcharge increases and service adjustments are compounding the capacity squeeze, with carriers prioritising higher yielding shipments at the expense of standard cargo bookings.
China presents a mixed picture. North China remains relatively stable, although Europe bound lanes are tightening due to rerouting and airspace disruptions. East China is seeing rising fuel prices restrict payload capacity and tighten supply, while South China and Hong Kong are experiencing stronger demand driven largely by e-commerce shipments, pushing rates higher on long haul routes.
The broader macroeconomic outlook adds further complexity. The International Air Transport Association (IATA) has projected global air cargo traffic to grow by just 2.6 per cent in 2026, down from 3.1 per cent in 2025, reflecting the dampening effects of geopolitical instability, trade tensions and rising operating costs. Asia Pacific carriers, which had driven much of the post pandemic recovery, are now facing the dual challenge of maintaining margins while responding to elevated fuel surcharges and unpredictable schedules.
Trade compliance is adding another layer of complexity. The introduction of a temporary 10 per cent import surcharge by United States authorities, alongside multiple ongoing investigations under Section 301, signals tightening global trade enforcement that may further increase costs and regulatory risks for shippers operating on transpacific lanes.
For Malaysian and Southeast Asian aviation stakeholders, the implications are significant. Carriers operating belly cargo services on long haul routes are absorbing higher operational costs that will eventually flow through to freight rates, while dedicated freighter operators face the same fuel and routing pressures with fewer options to recoup costs through passenger revenue. Industry observers expect the elevated rate environment to persist at least through the second quarter of 2026, with any meaningful relief contingent on a de-escalation of the Middle East conflict and a corresponding stabilisation of jet fuel prices.
