Global air cargo rates fell in July as the conflict involving Iran pushed up jet fuel costs and disrupted supply chains, while new European Union import rules further weakened shipments from China and Hong Kong to Europe, according to WorldACD Market Data.

Chargeable weight from mainland China to Europe fell 5% week-on-week in the week ended Aug. 2, while shipments from Hong Kong dropped 3%, marking a sixth consecutive weekly decline. Volumes were down 7% year-on-year from mainland China and 24% from Hong Kong.

The Middle East conflict has added to pressure on the air cargo market through higher fuel surcharges and supply disruptions, while demand for capacity from sectors such as AI-related data centre infrastructure has helped keep rates elevated, WorldACD said.

Global average spot rates fell 8% month-on-month in July to $3.41 per kg, but remained 29% higher than a year earlier. Asia-Pacific rates declined 10% to $4.75 per kg, while still standing 29% above July 2025 levels.

Spot rates from mainland China to Europe fell 29% between late June and the week ended Aug. 2, to $3.86 per kg, while Hong Kong-Europe rates declined 15% to $4.96 per kg.

For July, combined China and Hong Kong air cargo tonnages to Europe fell 9% from June and 12% year-on-year. Mainland China shipments declined 3% month-on-month, while Hong Kong volumes fell 19%.

WorldACD said the declines were largely linked to higher costs and added complexity following the EU's removal on July 1 of tariff-free treatment for goods valued below 150 euros, which has particularly affected the e-commerce-heavy Hong Kong market.

Despite the recent decline, spot rates from China and Hong Kong to Europe remained slightly above year-earlier levels in the latest week, although the premium has narrowed sharply from the previous three months.

Rates from other Asia-Pacific origins remained significantly higher year-on-year, including Taiwan at 33%, Vietnam at 39% and Thailand at 32%.

WorldACD said elevated global rates reflected higher fuel surcharges following the rise in jet fuel prices linked to the U.S.-Iran conflict, alongside supply-demand imbalances and disruptions caused partly by the conflict and continued demand for cargo capacity from sectors including AI infrastructure.-TradeArabia News Service