Market Review – March 2025

Global freight markets are responding to rapidly shifting operational and economic landscapes, with each mode experiencing unique challenges. While demand is showing signs of resilience, rate unpredictability and operational bottlenecks continue to test the agility of supply chains.

In the air freight sector, regional divergence remains stark, with Asia-Pacific driving volume growth, while European outbound lanes show signs of softening. Sea freight is grappling with excess capacity, falling rates, and evolving alliance structures, while, road freight is navigating modest growth under the weight of costs and regulatory uncertainty.

AIR
February’s air cargo market delivered mixed signals, with global volumes up 5% year-on-year despite wide regional variation. Early-month declines in China-USA volumes were followed by a modest recovery in spot rates, especially out of Hong Kong. Meanwhile, European outbound volumes—particularly to the US and Japan—remained subdued.

Underlying demand from sectors such as eCommerce and high-tech remains strong, though policy uncertainty and potential tariffs are creating short-term turbulence.

– Global air freight volumes rose 5% year-on-year in February, led by Asia Pacific (+8%) and South America (+7%).
– China to the USA volumes dropped 10%, with spot rates initially down 9% before rebounding.
– Hong Kong outbound rates rose 2.5% week-on-week, standing 12% higher than this time last year.
– London Heathrow spot rates weakened, reflecting softer European demand.

SEA
The ocean freight sector is in a phase of structural adjustment, shaped by changes in global alliances, regulatory costs, and continued fallout from Red Sea disruptions. The Shanghai Containerised Freight Index (SCFI) has fallen since January, despite relatively strong demand. The recent wave of capacity injections is now slowing, with a 5% increase forecasted for 2025 following record deliveries last year.

Market dynamics remain unstable as port congestion, blank sailings, and rerouting challenges persist. Compliance costs are rising under the EU Emissions Trading System, while any easing of Red Sea diversions could release an estimated 2 million TEU back into circulation, creating downward rate pressure. Carriers are adapting through service rationalisation, although vessel utilisation remains tight.

– SCFI has declined since January, signalling ongoing rate instability.
– Capacity growth is slowing to 5% in 2025 after unprecedented deliveries in 2024.
– Red Sea diversions are easing, potentially adding 2 million TEU back into global supply.
– 47 blank sailings announced through mid-April, mostly affecting Transpacific and Asia-Europe routes.

ROAD
The European and UK road freight markets are forecast to grow by 2% in 2025, continuing a modest post-pandemic recovery. Improved consumer sentiment and stabilising inflation are encouraging gradual demand upticks. However, widespread driver shortages—projected to leave over 60% of positions unfilled by 2026—are constraining network capacity and increasing labour costs.

Contract rates are rising faster than spot rates, indicating cautious optimism and longer-term commitments from shippers. Regulatory uncertainty, including potential new trade tariffs under the incoming US administration, could impact cross-border European exports.

– The European road freight market is projected to reach €436.9 billion in 2025, up 2% year-on-year.
– Driver shortages are worsening, with over 60% of roles expected to remain unfilled by 2026.
– Q4 2024 contract rates rose 2.8 points, while spot rates increased just 0.5 points.
– Sustainability and digitalisation are expanding, with more fleets adopting AI and alternative fuel vehicles.

In today’s dynamic logistics landscape, staying informed and agile is essential for building resilient, future-ready supply chains.

At PSP Worldwide, we provide data-driven insights and tailored solutions to help you navigate disruption, manage risk, and capitalise on new opportunities across air, sea, and road freight.

Get in touch to see how we can support your supply chain goals — EMAIL Colin Redman, Managing Director, today.