February 2025 Global Freight Update

• AMER - During the January to November 2024 period, air trade from the AMER to EMEA experienced a 4% decline compared to 2023, primarily due to reduced US exports of machinery and industrial materials. Nearshoring efforts have led to the increase in freighter capacity into Mexico, highlighting the reconfiguration of supply chains to enhance proximity and responsiveness.
• EMEA - In 2024, European main hubs experienced a notable increase in air cargo volumes, with Vienna achieving a record-setting 22% growth. This surge reflects robust trade flows, particularly between APAC and EMEA, which saw a significant 20% year-over-year increase in inbound volume compared to 2023.
• Air freight capacity out of South Asia remains constrained:

Global Ocean Market Update

Global shipping rates fluctuated in January, driven by pre-Lunar New Year demand, trade policy uncertainty, and continued disruptions in the Red Sea. Prices initially surged but eased toward the end of the month as the seasonal rush subsided.

• With the first phase of the Israel-Gaza cease fire in effect, the Houthis have stated they will stop attacking vessels unrelated to Israel. However, ocean carriers have not yet resumed routes through the Suez
• Transpacific routes saw typical seasonal patterns, with rates rising early in the month before dipping after the holiday. However, the anticipated new U.S. tariffs led to a surge in shipments as importers rushed to move goods before any increases took effect. This frontloading could keep demand unusually high in the coming months but may result in a downturn once new tariffs are introduced.
• In Europe and the Mediterranean, longer routes due to Red Sea diversions pushed rates up earlier than usual, with prices peaking before the Lunar New Year. Since many shipments moved ahead of schedule, a post-holiday rebound may be limited.
• 2025 marks a pivotal year in the global ocean shipping industry as major carrier alliances undergo significant reshuffling, impacting service routes, capacity management, and overall maritime logistics.

At a Glance

Air Freight

• Global air cargo capacity jumped 6% year-on-year
• Demand continues to outpace available air cargo capacity
• Aircraft manufacturers challenged delivering aircraft, delaying additional air cargo capacity
• Air freight capacity out of South Asia remains constrained

Ocean Freight

• First phase of Israel - Gaza ceasefire in effect
• Continued Red Sea diversions caused ocean rates to push up earlier than usual in Europe.
• US Tariffs led to shippers frontloading goods to avoid tariffs
• New ocean carrier alliances reshape global shipping dynamics

US Tariffs

• On February 1, 2025 President Trump announced in an Executive Order that most goods imported from China and Hong Kong will be subject to an additional 10 percent ad-valorem duty rate beginning February 4, 2025.
• President Trump and Prime Minister Trudeau have agreed to pause the 25% duties on Canadian goods which were to be implemented on February 4, 2025, to allow for additional negotiation and collaboration. A new effective date has not been announced.
• President Trump and President Sheinbaum have agreed to pause the 25% duties on Mexican goods which were to be implemented on February 4, 2025, to allow for additional negotiation and collaboration. Tariffs are now scheduled to be implemented on/or about March 4, 2025.
• President Trump's February 5th Executive Order abolished a duty-free exemption for low-value ecommerce shipments from China, Mexico and Canada. This change would adversely affect the business models for many companies engaged in international trade, but the air cargo sector would take the biggest hit.
• The U.S. imported more than 2.5 million tons of cargo by air from China last year, including about 1.3 million tons of cheap e-commerce products that would have been impacted had President Trump not paused the Executive Order on February 7th.