Trump’s tariffs, air cargo’s struggles, and the shake-up ahead

The air cargo industry is facing major disruption and a possible slump, Neel Jones Shah, former senior executive at Flexport, Delta Airlines and United Cargo, tells the latest episode of The Freight Buyers’ Club Insight series.

At the centre of the shake-up? Trump’s new tariffs, which could hit e-commerce exports from China to the U.S. hard. As the latest round of duties take effect, air freight operators reliant on small parcel shipments could see demand slump, forcing a major realignment of capacity and strategy.

Then there’s the industry’s continued struggle with digitalization. “I think it's old fashioned,” he explains to host Mike King. “This is an industry that hasn't had the capital available to invest in technology in the way other industries have been able to.”

And what about Flexport’s grand experiment? The digital freight forwarder once aimed to become the “Microsoft Office for global trade.” While the company revolutionized the user experience for shippers, Neel admits it didn’t get everything right—and the cost was enormous. As the industry looks to the future, lessons from Flexport’s rise (and missteps) remain critical.

Despite years of promises, air cargo remains frustratingly slow, bogged down by outdated processes and resistance to change. Neel doesn’t expect supply chains to speed up anytime soon. “I don't think you're ever going to see a two-to-three-day end-to-end transit that's durable,” he concludes.

Looking ahead, Neel warns that geopolitical risks could further disrupt air cargo. If the Suez Canal fully reopens and de minimis rules change, air freight could lose a crucial advantage over ocean shipping just as demand slumps. Meanwhile, combination airlines—those carrying both passengers and cargo—may fare better than e-commerce-heavy carriers if a downturn hits.

With so much uncertainty, the question for the air cargo supply chain is clear: Who will adapt, and who will struggle?