How the AI Chip Boom Is Squeezing Transpacific Air Cargo

In May, moving a kilogram of cargo from Taiwan to the United States by air cost $7.02, up 24% on the year before. China-US rates hit $5.86, up 46%, and Malaysia-US reached $6.69, up 36%, according to Xeneta data reported by Air Cargo News. These weren't niche routes. They were standard transpacific lanes running close to full. Two forces collided to cause it: an AI-driven chip boom and a war that squeezed capacity out of the Middle East.

 

Two Shocks, One Squeezed Market

The Middle East conflict hit first. Global spot rates in May were 41% higher than a year earlier, even though volumes rose only 4% and capacity rose just 1%, pointing to lost supply as much as to new demand.

Chips supplied the second shock. Global semiconductor sales jumped 106% year on year in April, and Taiwan's economy grew 15% in the first quarter, its fastest pace in almost five decades. AI hardware replaced e-commerce as air cargo's main growth driver, and transpacific utilisation climbed to around 90% in May.

Why Shippers Keep Paying

Rates like these usually push shippers toward ocean freight, but that option stayed weak. With the Iran war continuing, ocean reliability remained low, which kept volumes from shifting back to ships.

Xeneta's chief airfreight officer Niall van de Wouw argued that for companies building data centres, getting components quickly matters more than the freight bill. Whether they pay five, six or seven dollars a kilo is largely secondary to him. The money behind that urgency is huge. Samsung and SK Hynix together account for more than half of South Korea's Kospi index, and SK Hynix's stock rose more than sevenfold in a year.

Shippers Are Hedging, Not Committing

Even with that urgency, buyers aren't locking in. In the second quarter, 58% of newly agreed shipper and forwarder contracts ran three months or less, up from 22% a year earlier, and nearly half of chargeable weight moved on the spot market.

The trend is continuing. Among new contracts starting in the third quarter, 60% covered three months or less, against 25% a year earlier, while 12-month deals fell from 40% to 25%. Van de Wouw reads this as shippers using short deals while they push for pricing tied to what airlines actually charge forwarders, not a fuel surcharge.

Rates Are Easing, Not Collapsing

Global spot rate growth has cooled since May. Year-on-year increases went from 41% in May to 38% in June, 28% in July, 24% in August, and 27% in September, at $3.10 per kilogram.

The transpacific is holding firmer than most lanes. Northeast Asia to North America averaged $5.76 per kilogram in August, 36% above late-February levels, with Southeast Asia 34% higher. Those are regional averages, so they can't be compared directly with May's Taiwan-US rate. The transatlantic tells a different story, where summer belly capacity kept Europe-to-North America rates 25% below late-February levels.

What Could Change the Picture

Xeneta isn't expecting a strong finish. Its indicators point to a muted fourth quarter with no signs of a peak season, and frontloaded inventories may leave less to ship.

The AI demand behind the transpacific premium also carries risk. Korea's market swung hard in July, with the Kospi falling more than 8% in a single day before staging a record rebound as investors weighed stretched AI valuations.

Why It Matters

If chip shipments hold up, transpacific rates could stay above last year's levels even as the rest of the market cools. If AI spending slows, the lanes that gained most would likely feel it first. The shift toward three-month contracts suggests shippers don't yet know which way it will go.