Global freight market report – December

The UK moves into year-end with cautiously improving momentum, as easing inflation and cooling labour-market pressures strengthen expectations of a Bank of England rate cut to support growth. Flash PMI readings point to stabilising business activity, with upcoming retail, employment and CPI data set to clarify the pace of recovery.

For importers and exporters, global demand remains resilient. European manufacturing conditions are beginning to stabilise, while supply-chain reliability is improving across major gateways.

Ocean and air capacity are generally adequate, and overland networks continue to benefit from lower congestion and stronger schedule performance. Although cost pressures persist, trade conditions are becoming more predictable, giving businesses a firmer foundation for planning into 2026.

Ocean Freight

Container shipping conditions entering December reflected a split market, with Asia–Europe demand strengthening while Transpacific volumes softened after early US retail front-loading.

The Asia–Europe market remained the strongest performer entering December, with Shanghai–Rotterdam and Shanghai– Genoa rates rising 5% and 13% week-on- week respectively.

European import demand will hold firm into year-end, with early Lunar New Year shipments supporting a later-than-usual seasonal uplift. Transatlantic flows were broadly stable, with balanced exports from North America maintaining steady utilisation.

Transpacific fundamentals weakened further. Both Los Angeles and New York rates fell 7% and 5% as most US holiday cargo had already been moved in October and November. Even with additional blank sailings, carriers struggled to align supply with falling volume.

Despite global schedule reliability slipping to 34% in November, down 2% in a month, December has delivered double-digit month-on-month demand growth for the third year, with this year’s uplift concentrated on Asia–Europe lanes. Capacity growth remains a persistent headwind across all east–west corridors as new tonnage continues to enter service.

• Asia–Europe rates strengthen on late-year demand and early CNY bookings
• Transpacific pricing softens amid oversupply
• Global schedule reliability dropped to 34%
• New tonnage continues to enter service

Air Freight

Air cargo demand is displaying resilient growth even amidst broader freight headwinds. November global air cargo tonnage rose 5% year-on-year in November, with particularly strong performance on Asia Pacific–Europe and intra-Asia routes. Capacity reductions, with overall air capacity down 2% have helped support pricing discipline on many trade lanes.

European imports remain robust, buoyed by fashion, technology and replenishment demand. Asia–Europe uplift held firm during November despite earlier Golden Week delays, while Southeast Asia origin volumes continued to expand strongly.

In contrast, China and Hong Kong flows into the US remained around 8% below last year, reflecting tariffs and the retreat of de minimis benefits. This diverted cargo toward Europe, where China–Europe tonnages increased more than 5% year-on-year and Hong Kong– Europe rose 14%.

• Year-on-year, November tonnages grew 5%
• Average global rates up 7% in November
• Global air cargo volumes to expand 2.4% in 2026
• Tariff shifts redirecting flows from US to Europe

Road Freight

Road freight markets in late 2025 show steady but subdued growth consistent with moderating overall transport demand. Contract rates are stabilising relative to spot pricing, reflecting balanced supply–demand dynamics. Rising input costs, including driver wages, insurance and compliance, continue to shape carrier pricing strategies.

Market sentiment has improved, supported by modest gains in industrial confidence and gradually rising freight activity in key corridors. Despite fragile consumer spending, overall freight fundamentals are firmer than earlier in 2025.

In the U.K. and Europe, transport output growth is forecast to be modest, with road freight seeing incremental increases supported by manufacturing and consumer goods flows, but tight margins persist given broader economic pressures.

• Spot pricing remains around 2% lower, though trending upward
• Rate levels are expected to remain firm into early 2026
• Employment costs are up around 6% across the UK and Europe
• EU truck registrations have dropped around 15% this year

Contract Logistics

Contract logistics demand into late 2025 is being driven predominantly by strategic outsourcing and technology investments rather than pure volume growth. Shippers are prioritising providers that can offer omnichannel fulfilment, inventory visibility and scalable labour models to handle fluctuating sales patterns.

Operators continue investing in automation, robotics and digital visibility tools to offset labour shortages and improve efficiency. Long-term contracts now dominate new business, enabling providers to scale infrastructure and reduce cost exposure.

Inventory strategies have evolved toward buffer stock and near-shoring, reflecting the desire to reduce lead time risk and respond to tariff-induced supply chain variability. Value-added services—including late-stage assembly, co-packing and returns processing- are commanding premiums and expanding at 3–4% CAGR as customers prioritise agility and sustainability.

• Outsourcing demand anchored in omnichannel fulfilment and visibility
• 60% of new business secured on multi-year agreements
• Value-added services are commanding premiums and expanding at 4% CAGR
• Inventory buffering & near-shoring underpin warehouse network design

Warehousing

Warehousing demand remains resilient as shippers prioritise flexibility and strategic location over sheer footprint growth. Despite slower overall trade expansion, inventory rebalancing and near-shoring strategies are increasing demand for modern, multi-functional space that supports cross-dock, short-cycle fulfilment and value-added services.

Vacancy rates in major global markets have stabilised, yet demand for specialised facilities including cold storage, pharmaceutical temperature-controlled space and high-density automation hubs continues to outpace general warehousing.

Cost pressures around labour and energy are accelerating investments in robotics, advanced WMS and energy-efficient building design, helping operators sustain service levels with leaner workforce requirements.

• Occupancy high across UK and EU corridors
• Cold chain & pharma space outperforming general warehousing
• Automation & energy-efficiency investments rising
• Prime rents elevated despite moderating growth

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