Air freight rates from the Philippines to the United States are expected to rise in July due to tightened carrier space amid the Iran-Israel conflict, reports Manila's Business Mirror.

Dimerco, a global logistics provider, said the conflict has reduced space availability for some carriers, particularly in the Middle East. Its July forecast noted stable rates to Asia and Europe, with soft capacity meaning supply exceeds demand.

Rates to the US are projected to increase as demand rises, with airlines expected to reduce flight frequencies in response to potential disruptions.

Kathy Liu, vice president for Global Sales and Marketing at Dimerco Express Group, said intra-Asia traffic remains strong, especially between China and Taiwan, Vietnam, Thailand, Malaysia and Singapore, with higher rates compared to last year.

Demand from Southeast Asia, particularly Thailand and Vietnam, is picking up ahead of a tariff deadline, while demand from China to the US and EU remains weak, leading to cancellations of scheduled freighter flights.

For ocean freight, Dimerco said capacity remains soft but warned of possible equipment shortages affecting Philippine shipments. Peak season volumes and rainy season weather may also cause vessel delays.

In East China, rates to Singapore are rising due to automotive exports, while soft demand to Indonesia and Cambodia has led to slight decreases. Capacity to the Philippines is tightening, prompting calls for early bookings.

Alvin Fuh, Vice President for Ocean Freight at Dimerco, said uncertainty around tariff policies and shifting capacity deployment continues to shape container shipping costs.

Former Tariff Commissioner George Manzano said Philippine exports grew in early 2025 due to frontloading ahead of reciprocal tariffs announced by US President Donald Trump. A proposed 17 per cent tariff was reduced to a flat 10 per cent after a 90-day pause.

Preliminary data from the Philippine Statistics Authority showed export receipts rose 15.1 per cent to US$7.29 billion in May 2025 from US$6.33 billion a year earlier, the fastest growth since April 2024 and the highest value since October 2022.

From January to May 2025, exports totaled US$34.20 billion, up 10.8 per cent from US$30.87 billion in the same period last year, according to PSA.