BAI Index October 2025: E-commerce and tariff workarounds drive mixed performance in September

Overview of market conditions

September marked a tentative rebound with a modest global uptick as sea-to-air shifts and tariff workarounds supported Asia cargo flows while parts of Europe softened. The Baltic Air Freight Index (BAI00) rose 0.48% month-on-month (MoM), reversing August’s dip and signaling a fragile stabilisation.

Outbound Hong Kong (BAI30) gained 2.02% and Shanghai (BAI80) climbed 2.52%, with Shanghai–Europe (BAI81) up 7.47% the standout mover. Europe posted a split screen: London Heathrow (BAI40) up 1.36% while Frankfurt (BAI20)  fell 7.11%, pressured by weaker Asia links and selective redeployments. In North America, Chicago O’Hare (BAI50) dropped 6.77%, but O’Hare–Europe (BAI51) climbed 5.55%, showing how selective capacity shifts can hide wider outbound weakness. Overall, demand held up as shippers spread out origins and routes to work around new US tariff rules and the end of de minimis.

Four key drivers of market dynamics

1. Tariffs and de minimis reset reshape flows

Policy changes continued to redirect small parcel and discretionary cargo. E-commerce platforms and forwarders leaned into alternative routes toward Europe and within Asia, while transpacific flows stayed uneven. That rotation helped keep HKG–Europe (BAI31) up 3.51% and HKG–North America (BAI32) up 1.30% even as certain US lanes underperformed. The policy backdrop is prompting strategies that prioritise flexibility, additional entry points, and country-of-origin diversification.

2. Sea-to-air substitution and pre-Golden Week stocking
Rail disruptions and post-typhoon recovery in Southern China funnelled urgent shipments into airfreight right as the pre-holiday restock started. Regional indicators reflected this pull: Singapore outbound (BAI60) rose 2.40% and Singapore–Southeast Asia (BAI63) rose 2.41%. Forwarders clearing backlogs and shifting inventory for Golden Week drove the short-haul bump, feeding into Asia–Europe long-haul traffic.

3. Tactical redeployment of lift toward lanes with firmer yields
Operators continued to shift capacity toward Asia–Europe and selected Middle East links while reducing transpacific exposure. Europe’s indices show the consequences: FRA–USA (BAI24) fell 8.51% and FRA–China (BAI25) dropped 5.13%, which contrasted with a firmer LHR–North America (BAI42) that was up 5.39%. The same pattern is visible within hubs: aggregate FRA (BAI20) fell 7.11% versus LHR (BAI40) up 1.36%, reflecting different customer mixes, belly schedules, and access to premium flows.

4. Spot market dominance and lane fragmentation

The gap between spot and contract rates stayed wide, encouraging short-cycle buying and quick shifts in routing decisions. Even within a single gateway, dispersion was clear: PVG–Europe (BAI81) rose 7.47% while PVG–North America (BAI82) fell 1.01% and PVG–USA (BAI84) fell 0.16%. That split captures how European demand and postal-parcel re-routing have helped to offset transpacific softness linked to tariffs and compliance frictions.

Regional and route-specific insights

Asia–Europe: momentum builds

Asia–Europe was September’s relative outperformer. PVG–Europe’s 7.47% rise led gains as European entry points absorbed more cross-border e-commerce and time-sensitive cargo, while HKG–Europe rise of 3.51% added confirmation. Added freighter capacity and steady postal parcel substitution into EU hubs kept pricing constructive even as exporters juggled documentation requirements.

Asia–North America: uneven under the surface

Headline indices softened, but with clear differences across regions. PVG–North America fell 1.01% and PVG–USA fell 0.16%, which hid pockets of strength on select technology center flows from North Asia that bypass Mainland China. Meanwhile, HKG–USA rose 0.91% and HKG–North America rose 1.30%, showing resilience where forwarders secured capacity early or exploited multi-stop routings.

Europe–North America: a tale of two gateways

Heathrow–North America (BAI42) rise of 5.39% benefited from targeted freighter calls and a stable premium mix, while Frankfurt–USA (BAI24) fell 8.51%, reflecting weaker eastbound returns and trimmed allocations. The deviation underscores how quickly yield calculus can swing with schedule tweaks and trucking connectivity on the European end.

Intra-Asia and Southeast Asia: steady normalisation

Short-haul recovered as networks cleared weather-related backlogs and rail alternatives reopened. HKG–Southeast Asia (BAI33) rose 1.32% and SIN–SEA (BAI63) was up 2.41%, pointing to continued fragmentation of sourcing, with Vietnam, Malaysia, and Thailand capturing diverted orders. That regional strength, combined with a 2.02% bump at HKG (BAI30), helped drive more long-haul traffic into Europe.

Freighter market and supply-side trends

Conversion milestones are easing long-run constraints, but not fast enough to flood the market. Certification progress on 777 programmes is constructive, yet feedstock shortage, especially for 777-300ER passenger frames still in high use, keeps slot pricing elevated and delivery schedules tight. Production freighter output remains insufficient to change the near-term balance. Carriers are keeping aircraft in service longer, stretching leases, and shifting widebodies to routes that deliver steady returns. This makes rates very reactive to even minor shifts in demand, leading to sudden jumps whenever modest backlogs emerge.

What the indicators say about demand

Macro and high-frequency signals continued to flash a mixed but constructive picture. Global trade momentum stayed positive, but the composition shifted: e-commerce and time-sensitive components gained share, while discretionary consumer electronics tied to China–US flows remained under pressure. Purchasing managers’ indices edged higher on headline readings, but export orders remained below expansion thresholds in several economies. Inventory-to-sales ratios remained central to short-term swings: where retailers ran lean, restocking showed up quickly in the air channel, particularly on Asia–Europe. Jet fuel prices were lower year-over-year, supporting schedules and yields, but capital and crew constraints still limit the speed of capacity additions.

Q4 outlook: constrained supply, rule-driven demand

Cargo Facts Consulting expects continued volatility into the peak as policy implementation phases collide with holiday pulls and only incremental net freighter growth. Asia–Europe should remain the relative outperformer, supported by e-commerce, postal-parcel re-routing, and alternative sourcing from North and Southeast Asia. Transpacific strength will depend on how quickly platforms and consolidators adapt labeling, screening, and routing to the new US requirements.

In Europe–North America, expect ongoing gateway-specific divergence: airports with strong trucking connectivity, pharma and express capabilities, and stable belly schedules will capture more premium flows, while others may lag.

With the de minimis repeal now in effect and the US–China tariff truce set to expire in November, demand patterns remain highly uncertain. Tactical redeployments will continue to shape capacity, while constrained fleet growth keeps the market vulnerable to even modest demand surges.

Cargo Facts Consulting expects further volatility in September, particularly on Asia–US lanes, as carriers and shippers adjust to new trade rules. Longer term, the pace of new conversion deliveries, led by IAI’s 777-300ERSF, will determine how quickly structural constraints on freighter supply begin to ease.

About Cargo Facts Consulting

Founded in 1978, Cargo Facts Consulting (www.cargofactsconsulting.com) is a leading air cargo consultancy and data provider. Through our specialised services in digital innovation, strategic planning, and growth management and data solutions, Cargo Facts Consulting helps its clients navigate the complexities of the air logistics industry.

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