EXTRANS GLOBAL - Air Freight News - Week 13 2025

Air Cargo General

1)  Will the semiconductor industry revive demand in the air cargo market? - Prospects for increased sales and expanded U.S.-centered investment

• Concerns have been frequently raised about the slowing demand centered on e-commerce that has driven the air cargo market until recently. However, with the surge in demand for artificial intelligence (AI) and the explosive increase in semiconductor demand, there are positive forecasts indicating that demand for semiconductor-specific air transportation services is also rising.
• In 2024, global semiconductor revenues are expected to increase by 19.1% compared to the previous year, with a nearly 18% rise in January alone compared to the same period last year.
• This year, overall revenue is projected to increase by about 15%. As a result, the global supply chain in related industries requires more sophisticated and faster transportation solutions.
• Meanwhile, the global semiconductor market is entering a new phase through supply chain restructuring and diversification of manufacturing bases. The United States, under the Biden administration, has introduced the CHIPS Act to encourage domestic production, with major semiconductor companies like TSMC, Intel, Nvidia, and Samsung Electronics making large-scale investments. TSMC is pushing to establish five fabs in Arizona, with a total investment of $100 billion, which is regarded as one of the largest foreign direct investments in U.S. history.
• In fact, semiconductor demand has long been a staple of the air cargo market. However, supply chain disruptions caused by geopolitical conflicts, natural disasters, and pandemics have made it difficult for companies to discover stable routes and demand sources, as they diversify their supply bases and expand investments in local production facilities.
• Amid these changes, the semiconductor industry is increasingly relying on air transportation to maintain a "just-in-time" supply chain system globally.

2)  Cargo Freight Rates Plummet Due to Trade War - Aviation and Shipping in 'Critical Alert'

• As the global trade war erupts and cargo freight rates plummet, the aviation and shipping industries are on high alert due to concerns over declining profitability. Coupled with a decrease in cargo volume, container shipping rates have hit their lowest level in 15 months, while air freight rates have fallen by 20% just this year. In particular, there are growing fears that if the Trump administration announces tariffs on automobiles and semiconductors next month, the trade war will escalate further, leading to a contraction in global trade volume.
• About a week ahead of the Trump administration's imposition of reciprocal tariffs on the 2nd of next month, global maritime freight rates have dropped to their lowest level in 15 months.
• The situation in the aviation industry is similar. According to the Hong Kong TAC index, the Baltic Air Freight Index stood at 2034 as of March this year, a 21.8% drop compared to last year's 2602.
• The decline in shipping and air freight rates is attributed to the U.S. tariffs imposed globally. The series of announced tariffs by the U.S. has deepened uncertainties in the global trade environment, lowering air and maritime freight rates. Previously, the White House implemented a blanket 25% tariff on all steel and aluminum products on the 12th. The Trump administration has also imposed tariffs of 10 percentage points on Chinese imports twice this year.
• When tariffs increase, the prices of imported goods rise, dampening consumer sentiment and reducing trade volume. Following Mexico and Canada, China and Europe have also signaled retaliatory tariffs against the U.S., raising concerns that if the trade war intensifies in early next month, the decline in cargo volume will accelerate further.

3)  Amazon Air Set to Launch in Korea - Service Negotiations for Utilizing LCC and Belly Cargo

• Amazon Air, the cargo airline operated by Amazon.com in the U.S., has begun contacting domestic passenger airlines in South Korea. This move is interpreted as an effort to meet the demand for Chinese products, which account for 50% of Amazon's sales.
• Recently, Amazon Air held meetings with the domestic low-cost carrier (LCC) industry to negotiate the use of its "Belly Cargo" service. The Belly Cargo service, which transports logistics through the lower cargo holds of passenger planes, represents a significant market, accounting for up to 20% of total air cargo. For passenger airlines, this provides an additional revenue stream beyond their existing passenger services.
• A representative from one of the LCCs involved in the negotiations confirmed, "We have indeed discussed the utilization of Amazon Air and the Belly Cargo service," but added, "Specific details are still under review."
• Established in 2015, Amazon Air began regular operations in March 2016 with the lease of 20 Boeing 767 aircraft. Previously known as "Amazon Prime Air," the name was changed to Amazon Air as Amazon launched a drone delivery service under the same name. Some still refer to it as Prime Air. Currently, it is reported to provide cargo services on domestic routes in the U.S. and various locations in India.
• The contact with domestic LCCs is seen as a measure to increase cargo volume on routes between Asia and North America.
• Amid the expansion of Chinese online commerce companies like Ali and Temu into global markets with low-cost products, Amazon has also been increasing its sales of Chinese products in the U.S. to ensure its survival. Reports indicate that over 50% of the products traded on Amazon are currently sourced from China.

4) Hanjin Strengthens Logistics Network in Southeast Asia

• Hanjin Corporation is actively strengthening its logistics network in the rapidly growing Southeast Asian market.
• From February 16 to 22, Hanjin's President Cho Hyun-min and CEO Noh Sam-seok, along with over 10 top executives, visited three major Southeast Asian countries: Indonesia, Singapore, and Thailand, to inspect logistics hubs and conduct relay meetings with strategic partners.
• This visit focused on understanding the logistics situation in the ASEAN region, centered around Hanjin's new subsidiary in Singapore, and strengthening local partnerships. Hanjin established its Singapore subsidiary in August last year and has expressed its intention to use it as a strategic hub to expand its logistics network in Southeast Asia.
• Following this, Hanjin is exploring new business opportunities based on the support status for major clients. The executives are meeting directly with clients who operate local sales or factories to listen to their logistical challenges, while also visiting logistics centers to assess the current operations.
• In Indonesia and Thailand, they are meeting with air and forwarding partners to solidify long-term cooperative relationships. Discussions are taking place with partners that have maintained long-standing collaborations in Southeast Asian logistics, focusing on cooperation strategies to prepare for the increase in reverse exports and exports from the region, and to refine collaborative agendas.
• Hanjin plans to establish a logistics network for K-products targeting the entire Southeast Asia region, while also strengthening various intermediary import and export logistics, with Singapore as the logistics hub in Asia.

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