Global Freight Market Report – August
Global trade steadied in August as the United States and China extended their tariff truce until November. This pause provides short-term clarity for importers and may encourage some front-loading of shipments ahead of the new deadline.
The IMF upgraded global growth forecasts to 3% in 2025 and 3.1% in 2026, with the UK ranked among the top three fastest-growing advanced economies. Inflationary pressures are easing worldwide, although US levels remain elevated.
Business confidence has improved, with the J.P. Morgan Global PMI Composite Output Index rising to its highest level since last December. July’s reading points to an annualised global GDP expansion of 2.7%, stronger than Q2 but still below the decade average before the pandemic.
Ocean freight
The 90 day US–China tariff pause extension has provided short-term clarity, easing immediate pressure. Yet, capacity management remains inconsistent, with several carriers backing out of Asia–Europe loops, leading to sporadic but impactful service gaps. These disruptions are exacerbated by heightened volatility, particularly in Northern European ports where dwell times and congestion persist.
Meanwhile, trade flows to South America remain strong, supported by agricultural exports and seasonal demand. On transpacific lanes, the oversupply of sailing capacity and muted demand is dragging spot rates lower. Additionally, recent spikes in bunker fuel prices, driven by wider energy market unrest, are pressuring carrier margins and factoring into rate considerations.
• Capacity swings on Asia–Europe lanes now 30% higher than pre-pandemic norms
• Carriers have reduced Asia–Europe sailing rotations, adding unpredictability
• Transpacific West Coast pricing has slipped by around 6% since July
• Bunker fuel costs continue to edge higher each month
Air freight
Cargo volumes staged a rebound in July, largely thanks to tariff-driven front-loading. However, unlike previous months, growth was more evenly spread across lanes, with Latin American lanes seeing upticks as exporters sought faster routes. Europe–North America still underperformed, especially in capacity-constrained markets. Meanwhile, Middle East hubs are rebalancing capacity, easing pressure on Asia–Europe corridors.
Belly-hold capacity remains uneven: passenger fleets are still recovering, creating tight spots on transatlantic routes, ultra-long-haul routes benefit from freighter diversions. Year-on-year pricing remains sticky, but spot load factors are slipping slightly as carriers adjust networks to demand shifts.
• Global volumes up 5% YoY in July
• China/Hong Kong–Europe volumes +15% YoY
• Transatlantic rates 20% higher YoY
• Southeast Asia–Europe rates down over 20% YoY
Road freight
While UK operators face rising wage, NI and diesel costs, cost pressures on European carriers are subsiding, with falls in diesel prices offsetting increases in wages and operating costs. Thus, the biggest factor driving performance are demand side related.
Demand for UK articulated transport increased by 5% during July, while supply fell by 8% and demand for 7.5 tonne capacity rose over 13%, while capacity fell by 1%. July road freight pricing defied seasonal trends for a second month, with the TEG Price Index rising by 0.6% when it typically falls. Haulage index prices are nearly 5% higher than a year earlier.
• TEG Index +0.6% in July
• 7.5-tonne demand up 13.6%; artic supply down 8.4%
• Spot rates down 2.2% QoQ, lowest since 2023
• 426,000 unfilled driver vacancies in Europe
Contract logistics
With retailers under pressure for faster fulfilment, cold-chain and high-value item flows are gaining prominence. Infrastructure investment from the recent spending review is also revitalising logistics corridors near defence and energy sites. Providers are investing in automation, AI, and smart warehousing to enhance efficiency and maintain competitiveness.
Sustainability remains key, with providers trialling net-zero delivery fleets and solar-powered facilities. Despite staffing pressures, automation is smoothing throughput and reducing reliance on traditional labour models.
• UK contract logistics CAGR forecast at 3.2% to 2034
• eCommerce exceeds 36% of UK retail sales
• £113bn UK Spending Review drives logistics investment
• UK automation market projected at £4.4bn by 2033
Warehousing
Warehousing remains central to supply chains, with costs diverging across regions and strong demand sustaining UK growth. While Europe retains its position as the most expensive market, North America has softened, and Asia Pacific offers stability.
As de minimis gets set to end lower-value imports currently fulfilled directly from China may instead shift to bulk shipping, local storage, and domestic fulfilment, creating new demand for UK warehousing and contract logistics capacity.
• UK warehousing footprint up 60% in the past decade
• Prime rents rose 4.6% in 2024; 4% more expected in 2025
• London occupancy costs near £45 per sq ft
• UK electricity costs up 75% since 2021
At Logicall, we help you tackle freight, logistics, and warehousing challenges with proactive, data-driven solutions that protect your inventory, serve your customers, and keep your supply chain agile and competitive. Contact our team today for tailored advice on the issues highlighted in this report.
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