Lunar New Year is just around the corner, falling on January 29, 2025, and as always, it’s more than a cultural celebration – it’s a logistical curveball for the air cargo industry. Spanning 15 days of celebrations, Lunar New Year brings an extended production shutdown for factories across Asia, creating a ripple effect on global air cargo flows, rates, and capacity.
If you’re a freight forwarder, it’s time to buckle up. Here’s a breakdown of what to expect, how it will impact air cargo, and the key strategies to keep ahead of the game.
Why Lunar New Year Matters for Air Cargo
Lunar New Year isn’t just a holiday; it’s a production shutdown for factories across Asia, especially in China. Manufacturers and exporters rush to ship goods before workers head home for extended breaks, leading to a frenzy of activity in the weeks before the holiday.
And while you’d expect demand to peak in late January, the lead-up is where the real crunch happens. For forwarders, this means tighter capacity, higher rates, and an environment where every decision counts.
What’s Going to Happen This Year?
Here’s what you can expect for air cargo during Lunar New Year 2025:
1. Skyrocketing Demand
With factories shutting down, the race to ship goods before January 29 is already on. Asia-Europe and Transpacific routes will be hit hardest. Expect elevated air cargo rates to climb even higher, and with transpacific lanes already at $7 per kilo prices will be quite elevated.
2. Capacity Squeeze
While capacity is at record highs (up 6% year-on-year), it’s still tight in key lanes. Ongoing geopolitical challenges, like restricted airspace over Russia, are limiting route options. This makes advance air cargo capacity planning more critical than ever.
3. E-Commerce Dominance
Platforms like Shein and Temu are keeping volumes strong year-round. Their reliance on air freight to meet rapid delivery timelines means competition for space will be fierce – even for forwarders handling larger shipments.
4. Post-Holiday Lull? Not So Fast
Historically, volumes dip after Lunar New Year. But with U.S. tariff hikes looming, shippers are expected to front-load inventory into Q1, keeping demand more robust than usual even after the holiday. Additionally, the surge in sea-air shipments from Middle Eastern hubs is adding another layer of complexity.
What Should Forwarders Watch Out For?
If you’re managing air cargo, here are the key factors to monitor and act on:
1. Secure Capacity Early
Don’t wait until the last minute. With rates climbing and capacity tight, locking in space well in advance can save both time and money. Focus on high-demand lanes like Asia-Europe and Asia-North America.
2. Watch for Sea-Air Opportunities
With the Red Sea disruptions still in play, some shippers are turning to sea-air combinations to mitigate risk. If direct air freight is proving too costly or unavailable, explore these hybrid options – but act quickly, as they’re filling up fast.
3. Prepare for Post-Holiday Shifts
While Lunar New Year’s end traditionally signals a drop in activity, expect some sustained demand into Q1 2025. Front-loading ahead of potential U.S. tariffs will likely keep volumes elevated well past February.
The Bottom Line
Lunar New Year is an annual test for the air cargo industry, and 2025 is shaping up to be no different. For forwarders, preparation is key – whether it’s securing capacity early or leveraging alternative routes or modes.
With demand climbing and rates following suit, now is the time to tighten your strategy and get ahead of the curve. The Year of the Snake might bring plenty of fire, but with the right approach, you can make it your most successful Lunar New Year season yet.
