Market Report – May 2025
Economic signals across Europe remain mixed. Inflation is easing in the Euro Area but remains stubborn in the UK. Consumer demand is soft, while trade flows are increasingly shaped by geopolitical tensions, tariffs, and capacity realignments.
Ocean freight is experiencing sharp volatility as transpacific bookings surge ahead of the August tariff deadline. Air cargo volumes are rising on Asia–Europe lanes, supported by eCommerce, while European road freight is stabilising, but cost pressures persist.
Ocean Freight
Ocean freight markets are in flux as shippers scramble to move US-bound goods ahead of the August tariff deadline. The 90-day pause in new US–China tariffs triggered a surge in bookings, particularly on transpacific lanes, prompting carriers to reinstate capacity and reroute vessels. However, this has come at the expense of Asia–Europe services, which saw capacity drop by 17% in mid-June.
European shippers are also grappling with ongoing Red Sea diversions, port congestion, and EU ETS-related surcharges. Labour disruptions in Northern Europe and potential strikes on the US East Coast are compounding handling delays.
- Transpacific demand spikes; US East Coast capacity reinstated at pace
- Asia–Europe trade sees capacity squeezed as ships redeploy
- Congestion at Antwerp, Hamburg and Valencia impacts European reliability
- Spot rates rise across lanes; Drewry WCI up 10% in late May
Air Freight
Air freight demand is rising sharply on Asia–Europe lanes, driven by front-loaded eCommerce, fashion, and high-tech shipments. Meanwhile, China–US volumes rebounded in late May after April’s sharp decline, as shippers reacted to looming tariff and De Minimis changes. Load factors remain above 90% on key routes, creating significant space pressure.
Jet fuel prices are down 21% year-on-year, improving margins, but carriers are moving cautiously in expanding capacity due to policy uncertainty. While summer schedules will bring additional belly-hold space, rates remain elevated and premium surcharges are common on both transpacific and Asia–Europe corridors.
- China–Europe volumes up 11% YoY; strong eCommerce and retail flows
- Transpacific recovery underway after April slump
- Load factors exceed 90% out of Asia; capacity remains tight
- Rates elevated; Asia–Europe spot rates up 13% YoY in March
Road Freight
Road freight in the UK and across Europe rebounded in April after a subdued first quarter. A late Easter, improved weather, and stronger retail demand lifted haulage volumes, especially for articulated vehicles. However, this short-term lift does little to mask deeper structural challenges, including labour shortages and inflationary wage pressures.
April saw haulage rates rise sharply, while courier pricing remained flat. The TEG Road Transport Price Index rose 3.9 points, driven by a 33% spike in demand and a 10.9% drop in available artic capacity. Rising wages in Southern Europe and constrained fleet renewal continue to add cost pressure.
- Haulage demand up 33% YoY; artic capacity down nearly 11%
- Artic pricing rose 5.3 points; courier rates flat
- Diesel prices eased slightly, but wages rose 5%+ in Spain and Italy
- Manufacturers cautious amid trade and cost uncertainty
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