Air Freight Contracts Are a Trap. Go Spot.
Shippers avoiding long-term air commitments are winning on cost flexibility as rates swing hard in both directions.
Most brands are still writing 12-month air freight contracts like it's 2021. That instinct is costing them. Supply Chain Dive reported this week that shippers are pulling back hard from long-term fixed air agreements. They have a reason. Spot rates for air moved in a 34-point range over the last two quarters. Locking in the wrong number meant paying above-market for months with no exit.
Who Loses When You Lock In
Fixed air contracts favor one party: the carrier. You absorb downside when rates fall. You get no upside when they spike against a competitor who missed the window. The brand that signed a 12-month agreement in March 2026 is still paying that number. The brand that stayed spot has already repriced twice. Those are real landed cost differences hitting NetPPM at the ASIN level. Not abstractions. Margin.
The SKU-Level Calculation You're Skipping
Not every SKU needs air. That sounds obvious. Most commerce teams ignore it anyway. Pull your velocity data by ASIN. Separate the top-decile sellers from the long tail. High-velocity ASINs with thin replenishment windows and strong sell-through justify air freight. Everything else is a candidate for ocean or ground with a longer planning horizon. If you're flying mid-tier SKUs on a fixed contract because 'that's how the deal is structured,' you're subsidizing the wrong inventory.
McCormick flagged higher freight costs this week when lifting its inflation forecast. That signal matters even if spices aren't your category. Input cost pressure combined with elevated freight rates compresses margin across the P&L. If your air freight spend is locked and your input costs are rising, you have two simultaneous headwinds with no flexibility lever on either side. Brands running spot air at least control one variable.
The Arbitrage Is in the Timing Window
Spot air isn't a free pass. It requires a tighter ops cadence. You need weekly rate pulls from at least three forwarders. You need SP-API or equivalent demand signals feeding into your reorder logic so you're not booking emergency air freight on slow movers. The brands winning right now treat spot air like a trading desk, not a logistics function. They set rate thresholds by ASIN cohort. They book only when the landed cost math still clears their target NetPPM. They walk away when it doesn't.
Build the Decision Rule, Not the Contract
A fixed contract is a decision made once. A decision rule runs every week. Map your air-eligible ASINs. Set a landed cost ceiling per unit that preserves your margin floor. Assign a spot rate trigger. Above the trigger, those SKUs shift to ocean or get held. Below it, you book air and move fast. That rule replaces the contract. It also replaces the quarterly argument with your CFO about why air freight is blowing the budget.
Three Questions to Pressure-Test
First: For each air-shipped ASIN, when did you last verify that the velocity justifies the freight premium against current spot rates, not the rate you budgeted in January? Second: Does your team have the authority and the data to shift a SKU off air mid-cycle, or does that decision require an approval chain that takes longer than the rate window? Third: If spot air rates drop 18% next month, does your current contract let you benefit, or does a carrier capture that difference? Pull your air freight spend by ASIN this week. Start there.
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