The global freight market enters 2025 amidst significant geopolitical and economic developments that could reshape key trade routes and pricing dynamics.
President Trump’s protectionist trade measures have raised concerns about disruptions to global supply chains, while a tentative ceasefire in the Red Sea offers a potential reprieve for one of the world’s most critical shipping lanes.
While this development signals an opportunity to restore safer and more efficient transit through the Suez Canal, the situation remains fragile, and carriers are cautious about resuming normal operations in the region.
These shifting dynamics, alongside seasonal adjustments and capacity constraints, underline the need for strategic planning and adaptability as the freight market adjusts to new challenges and opportunities.
OCEAN
Average spot sea freight rates from Asia to Europe and the US stabilised after Lunar New Year-driven surges, while transpacific lanes saw a 50% rise in early January compared to late December. Europe-bound rates also increased, reflecting steady demand and a gradual resolution of Red Sea disruptions.
The tentative ceasefire in the Red Sea region offers hope for restoring passage through the Suez Canal. However, cautious shipping lines are likely to wait some months before committing resources to these routes.
Meanwhile, demand from Asia to the US and Europe has normalised after seasonal peaks, although pricing remains elevated compared to pre-pandemic levels.
Overall, ocean freight markets are stabilising, with rates likely to decline after Lunar New Year. Longer-term trends will depend on geopolitical developments, particularly in the Red Sea region and US trade policy.
AIR
The air freight market demonstrated strong performance in 2024, particularly in Asia-Pacific and the Middle East & South Asia (MESA), where robust export demand drove higher volumes. However, growth decelerated in the final quarter due to higher year-on-year comparisons and stabilising demand. Global tonnages increased modestly in late 2024, signalling a shift towards a more balanced market.
Rates remained significantly higher than 2024, particularly on transpacific and transatlantic routes, where capacity constraints kept pricing elevated. Asia-Pacific maintained its role as a key driver, with rates to the US and Europe up by over 30% year-on-year, despite seasonal dips post-Christmas. Challenges such as limited freighter capacity and eCommerce demand continue to strain supply chains.
Looking forward, air cargo is expected to stabilise further, with Asia-Pacific and MESA maintaining strong contributions to global volumes. Price volatility, particularly on transatlantic lanes, is likely to persist, emphasising the importance of strategic capacity management.
ROAD
The UK and European road freight market is set for a modest recovery in 2025 after a challenging period marked by economic stagnation in key economies. Although German truck mileage declined in 2024, overall market growth was supported by stronger performance in countries like Spain and Poland. Cross-border trade is forecasted to increase by over 2% this year, helping to stabilise the sector despite ongoing geopolitical and economic challenges.
In the US, less-than-truckload (LTL) pricing remains elevated following the collapse of Yellow in 2023, despite soft demand. The LTL producer price index (PPI) was flat for the fourth consecutive month in December, marking the longest plateau since 2020. While the index is down 1.6% from its July peak, it remains 5.5% higher than pre-Yellow levels and 3% higher year-on-year, reflecting the resilience of LTL pricing. By contrast, truckload PPI rose slightly in December but remains relatively flat overall.
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