Global freight market report – February 2025

The global freight and logistics markets continue to evolve, with challenges and opportunities as we progress through Q1 2025.

Air cargo rates have remained stable, defying expectations of a post-Lunar New Year decline, while ocean freight are navigating rate volatility, carrier alliance reshuffles, and ongoing capacity constraints. Meanwhile, European road freight spot rates show signs of stabilisation, though cost pressures and driver shortages persist.

AIR

Despite fears of a post-Lunar New Year slowdown and US trade policy disruptions, air cargo rates have remained firm, with some trade lanes seeing growth. While the suspension of the US de minimis exemption caused temporary disruptions in eCommerce shipments, the Baltic Air Freight Index (BAI00) recorded a moderate rise in rates, showing improved market confidence compared to last year.

In China, Shanghai outbound rates rose by 8% week-on-week, maintaining double-digit growth year-on-year. Rates from Hong Kong dipped slightly, yet remain higher than the previous year. Transatlantic routes saw stable pricing, with Miami holding strong as a key Latin American hub.

Looking ahead, the market’s resilience will be tested by further potential US tariff adjustments and regulatory changes. While eCommerce-driven demand is uncertain, stable rates suggest air cargo remains strong, with shippers and carriers adjusting cautiously to evolving conditions.

OCEAN

The ocean freight market is facing operational and regulatory shifts, with global shipping capacity expanding by 5% and US trade policies adding uncertainty. The Shanghai Containerised Freight Index (SCFI) has fallen 17%, largely due to the resolution of the US East Coast port strike, but freight rates remain unpredictable, impacted by service disruptions, carrier alliance reshuffles, and Red Sea geopolitical tensions.

Capacity remains under strain, with 30% of Far East westbound sailings expected to be blanked. Port congestion has reached a three-month high, particularly in Chinese ports ahead of Lunar New Year. The market is expected to remain volatile through April, with stabilisation expected in Q2 as new carrier alliances settle.

Despite challenges, the Far East remains a key growth driver, with exports to North America and Europe supporting demand. However, tariff changes and economic uncertainty—particularly under President Trump’s aggressive trade policies—may influence future volume flows.

ROAD

European road freight spot rates saw a modest increase in Q4 2024, marking a potential shift following a period of decline. The benchmark rate rose to 123.9 points, a 0.5-point increase from the previous quarter, though still 1.0 point lower than a year ago. However, market conditions remain challenging, with cost pressures, driver shortages, and fluctuating fuel prices continuing to shape operations.

A driver shortage of 500,000 positions across Europe continues to strain capacity, while diesel prices rose by 4.6% in Q4 after hitting a two-year low in September 2024. In the UK, diesel prices settled at 142.91p per litre in January 2025, offering some relief but failing to offset broader economic pressures.

While freight rates are stabilising, future growth will depend on economic recovery and shifting demand patterns. A 4% rise in retail trade activity ahead of the holiday season supported transport demand, and moderate rate increases are expected in the coming months. However, road freight remains highly sensitive to fuel costs and economic trends, making 2025’s outlook uncertain.

WAREHOUSE

The UK warehouse market is showing signs of stabilisation, with rental growth slowing, vacancy rates peaking, and occupier demand remaining steady. While investment volumes are holding firm, broader economic uncertainty may lead to a more cautious approach from investors.

The warehousing and storage sector continues to expand, growing from ￡283.10 billion in 2023 to ￡305.23 billion in 2024, at a 7.8% CAGR. This growth is driven by industrialisation, global trade expansion, e-commerce, and supply chain innovation. Future developments will likely focus on supply chain resilience, automation, sustainability, and last-mile delivery solutions.

In the UK, Grade A warehouse supply is starting to decline as occupiers shift from outdated Grade B stock to modern, ESG-compliant facilities. Despite high overall vacancy rates, demand for sustainable, flexible, and technology-driven warehouses is expected to reshape the market in the coming years.

LOGISTICS

The global contract logistics market is projected to reach €488 billion in 2025, with an expected compound annual growth rate (CAGR) of 7.4%. This sustained growth is being driven by the rapid expansion of eCommerce, technological advancements, and a renewed focus on supply chain resilience. As businesses continue to adapt to shifting market conditions, the logistics industry is undergoing significant transformation, embracing automation, sustainability, and enhanced efficiency.

The continued growth of eCommerce remains a major catalyst for logistics expansion, as online shopping drives increased demand for warehousing, fulfilment, and last-mile delivery solutions. To meet growing demand and improve efficiency, logistics companies are rapidly adopting automation and advanced technologies, such as warehouse management systems, robotics, and AI-driven logistics solutions. At the same time, supply chain resilience has become a key priority, with businesses investing in adaptive strategies to mitigate global disruptions and market volatility. Additionally, sustainability concerns are reshaping logistics operations, as environmentally friendly initiatives such as carbon-neutral warehouses and electric delivery fleets gain traction across the sector.

Logistics is increasingly leveraging data analytics and AI to optimise route planning, inventory management, and cost control. Also growing is innovation in last-mile delivery, and refining customer-centric approaches to enhance speed, reliability, and service quality.

Across Asia, the UK, and Europe, our teams are closely monitoring developments across supply chain, logistics and warehouse markets. We proactively adapt our strategies to navigate shifting conditions, mitigate challenges, and maintain resilience in our customers’ supply chains. Our commitment to providing timely insights ensures you stay informed and prepared to optimise your logistics operations.

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