Shippers are pushing for short-term contract structures as air cargo demand places mounting pressure on available capacity, according to the latest market reading from freight rate benchmarking platform Xeneta.

The finding, reported by Air Cargo News, points to a market in which buyers of airfreight capacity are unwilling to lock themselves into longer contractual commitments. The logic is straightforward. When capacity tightens and rates move, the party that holds the flexibility — the side able to reprice month by month rather than quarter by quarter or year by year — carries the advantage.

Xeneta's data platform aggregates contract and spot rate information submitted directly by shippers, forwarders and carriers, and the company's readings on contract duration and pricing behaviour are widely watched as an early indicator of where the airfreight market is heading. A reported preference for short-term deals is one such signal, and it cuts in a specific direction: shippers appear to be bracing for, or already reacting to, conditions in which capacity is scarce relative to demand.

That dynamic has consequences that run through the supply chain. When demand squeezes capacity, the spot market tightens first, and spot rates typically lead contract rates upward. Carriers and forwarders then hold pricing power at renewal negotiations. Shippers who have kept their commitments short can re-enter the market frequently, but they also expose themselves to exactly the spot-rate volatility that capacity shortages produce.

For airlines, the pattern matters operationally and commercially. Freighter operators and the belly-capacity divisions of passenger carriers price their cargo products against this contract-versus-spot balance. A shipper base tilted toward short-term deals means revenue visibility falls and yield management becomes more reactive, with pricing set closer to real-time market conditions than to negotiated annual frameworks.

For shippers, the calculus is equally concrete. Long-term contracts negotiated in a soft market lock in low rates; the same contracts negotiated in a tight market lock in highs. The decision to stay short is a bet that either rates will fall, or that the cost of flexibility is worth paying to avoid being trapped on the wrong side of a sustained capacity shortage.

The capacity side of the equation is the binding constraint. Air cargo capacity is a function of freighter fleets, passenger belly space and the routing decisions that carriers make in response to passenger demand. When demand growth outpaces additions to that capacity base — through freighter deliveries, passenger network expansion or conversion programs — the market tightens, and the behavioural shifts Xeneta reports follow.

The benchmarking firm's reading also serves as a reminder of how quickly contract structures respond to physical market conditions. Contract duration, often treated as an administrative detail, is in practice a direct expression of how each side of the market judges the balance of risk. Short deals signal shipper caution about paying too much for too long, or an expectation that today's tight conditions may not persist.

What happens next depends on the variables Xeneta tracks continuously: whether demand growth continues to outstrip capacity additions, whether spot rates keep climbing, and at what point shippers judge the market to have peaked — the moment at which locking in longer terms becomes the attractive play. Xeneta's subsequent data releases will show whether the shift toward short-term dealing deepens or reverses as those conditions evolve.