The ocean freight sector is oversupplied due to record new vessel deliveries (1.5M+ TEU capacity added in 2025). At the same time, air freight space is tight — aircraft maintenance delays, high e-commerce volumes, and limited wide-body belly capacity are pushing air rates up.
This divergence means sea is cheap, but air is scarce.
Impact — for Australian shippers
- Importers gain leverage: Ocean importers can negotiate lower rates, extended free time, and even guaranteed space on FAK deals. This is a window to cut landed costs.
- Exporters face bottlenecks: Air freight exporters — particularly those shipping chilled meat, seafood, or fresh produce — face rising spot rates (up 4–6% month-on-month) and fewer uplift options via SIN/KUL.
- Transit time gap widens: With ocean at 20–25 days to Asia and air reduced to limited departures, exporters must choose between cost savings (ocean) or market freshness (air).
- Increased modal imbalance: Forwarders are juggling sea-air hybrid routes; Singapore and Kuala Lumpur hubs are handling higher volumes as transshipment options.
- Contract risk: Shippers tied to all-air or single-carrier contracts may face disruption or penalties when capacity dries up.
Action summary
- Review mode split and diversify (e.g., part by sea, part by air).
- Book air slots 3–4 weeks early.
- Consider reefer FCL options with reliable transit for chilled cargo.
- Use multi-leg routing through Asia to gain schedule flexibility.
Overcapacity or air squeeze — either way, Flying Fox Solutions secures the smarter route for your cargo.
Source: IATA Air Cargo Market Update (Oct 2025); Freightos Air Index; Drewry Capacity Tracker; Reuters Global Shipping Overcapacity Report.
Disclaimer – Market data is from public sources we consider reliable but has not been independently verified; accuracy is not guaranteed.