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Central Asia air cargo demand growth presents charter challenges

Air cargo demand in the central Asia region has been on the rise in recent years, but building charter operations to meet the growing number of infrastructure projects does have its challenges. Speaking at the Central Asia Air Cargo Summit, Chapman Freeborn vice president of cargo for the India, Middle East, Africa region Gerhard Coetzee highlighted the speed of demand growth in the region. He said that the region needs to invest around $33bn annually in infrastructure projects while trade through the so-called Middle Corridor is set to triple by 2030. Growth in mining, energy, infrastructure and manufacturing is also creating more demand for heavy, oversized, time-critical and project cargo, he added. "The important point is that cargo demand is increasingly being generated inside Central Asia - rather than simply passing through it," said Coetzee. "Every one of these sectors creates a different type of cargo requirement, and not all of that cargo can move efficiently through a scheduled network." Coetzee added that while connectivity to and from central Asia is improving, with China increasingly connected with Kazakhstan, Uzbekistan and Kyrgyzstan, and scheduled links with Europe are also developing, that does not always mean the right type of capacity is available. He said this is particularly important for project cargo as an aircraft may have sufficient available payload, but the cargo may be too large for the aircraft type, the required route may not be available at the right time, or the airports involved may not have the infrastructure to handle the movement. "There is an air cargo network, but it isn't necessarily designed around the cargo that these new industries are generating," Coetzee said. He explained that a scheduled service may work well for standard freight, but a heavy industrial component moving to a remote destination against a project deadline creates a different requirement altogether. There are also airport limitations when it comes to handling larger aircraft such as the Boeing 747s, Boeing 777s and AN-134s. Cargo such as a 70-tonne transformer or 16-metre pipes requires suitable loading equipment, runway capability and specialist handling. Permits and regulatory approvals add another layer, while winter weather and de-icing can affect both timing and operating cost, he said. Coetzee concluded that as Central Asia becomes more integrated into global supply chains, the challenge will not simply be how much air cargo capacity exists in the region - it will be whether companies can access the right capacity, in the right place and at the point when their project requires it. The growth of demand levels has been one of the major developments this year as cargo airlines have been looking to alternatives to the Middle East due to ongoing conflicts in the region. Sources have also suggested that Chinese e-commerce platforms are utilising the region to move some shipments to the US.

GLP-1 drugs see Europe-Brazil pharma soar for LATAM Cargo

Pharmaceuticals transported by LATAM Cargo between Europe and Brazil grew approximately 150% from January to July compared to the same period last year. This surge was mainly driven by an increase in the transport of GLP-1-based medications, used in treatments for type 2 diabetes. In the first seven months of the year, GLP-1-based medications accounted for approximately 15% of the total volume transported by the company between Europe and Brazil. Including all cargo types, LATAM Cargo moved nearly 32,000 tonnes between the two markets during this period, a 27% increase compared to the first seven months of 2025. Around 75% of this volume consisted of general and consolidated cargo, including automation products, mining machinery, textiles, and commodities. "The growth in pharmaceutical transport demonstrates how demand for specialized logistics solutions is gaining prominence between Europe and Brazil," said Jorge Carretero, cargo sales manager Europe at LATAM Airlines Group. "Our priority is to support this evolution through a safe, efficient operation equipped for the specific requirements of each cargo type. "At the same time, the 27% growth in total volume reinforces the importance of connectivity between both markets and our network's capacity to serve diverse economic sectors." Increased routing options Germany, Belgium, Spain, and Italy were the main countries of origin for cargo transported by LATAM Cargo from Europe to Brazil between January and July, followed by the Netherlands and France. In passenger aircraft belly capacity, the primary routes during the period were Lisbon-São Paulo, Madrid-São Paulo, and Frankfurt-São Paulo. In freighter operations, the Frankfurt-Viracopos and Brussels-Viracopos routes stood out, stated LATAM Cargo. Expanded connectivity between Europe and Brazil has also increased cargo routing options. New passenger routes from Brussels and Amsterdam to São Paulo added capacity to the network, while the freighter service between Brussels and São José dos Campos opened a new logistics alternative connecting European and Brazilian markets.

Divide between Asia-US and Asia-Europe rates at historic levels

The price gap between container spot rates from Asia to North America and those to Europe has reached historic levels, with Sea-Intelligence warning that the current arbitrage could persist for several months. According to the latest analysis from the consultancy, Asia-US spot rates continue to rise, while Asia-Europe prices decline, creating an unprecedented premium for US importers. Using Drewry WCI weekly spot rate data from May 2012 to October 2026, Sea-Intelligence looked at four rate differentials between the transpacific and Asia-Europe trades. The most striking disparity was Asia to the US east coast (USEC), where the differential versus to North Europe reached $7,026 per 40ft in the latest week, in favour of the US - more than double the previous record of $3,179, recorded in June 2021. The Mediterranean-US east coast differential has also reached a record, of $6,726 per 40ft, the previous high being $2,828, also in June 2021. The pattern is similar to the US west coast (USWC) ports, where the difference between Asia-North Europe stands at $4,436 per 40ft in favour of the USWC. Sea-Intelligence said this premium was also comparable in scale to the extreme arbitrage seen in 2021, although the direction has reversed. In 2021, it favoured North Europe, reaching $4,888 in January and $4,510 in June. That was initially driven by pandemic-related disruption, and subsequently exacerbated by the grounding of the Ever Given in the Suez Canal in March. "Every time we analyse developments in the market, and try to assess metrics over a longer time series, we find that what was normal in the pre-pandemic era, simply looks different now," said Sea-Intelligence. It explained that before 2020, freight rate movements of hundreds of dollars were considered significant, while changes above $1,000 were rare. Today's much sharper and faster rate movements demonstrate that market dynamics have fundamentally changed. Normally, arbitrage should encourage carriers to shift capacity between trades, eventually narrowing the difference. But Sea-Intelligence cautioned that such changes took time, operationally, and because carriers needed confidence that a pricing imbalance would persist before redeploying vessels. It also warned there was a precedent for a prolonged arbitrage. In the first half of 2021, the gap opened rapidly around January and remained elevated until June. Though that history does not mean the current transpacific premium would necessarily last as long, the consultancy added - rates could simply fall. But it does mean the size of the arbitrage should not be interpreted as evidence that transpacific rates are about to fall, while Asia-Europe rates rise. Sea-Intelligence concluded that the post-2020 market required a rethink of how shippers manage freight price risk. "The market has already changed fundamentally. What we need to see now is the contracting process - and the associated risk management and budget processes - change, to reflect this new reality."