Global freight market report – July 2026

EU and UK manufacturing activity is expanding, new orders are strengthening and inflationary pressures have eased in some areas, but businesses still face elevated transport costs, geopolitical uncertainty and uneven conditions across global freight markets.

Brent and WTI fuel indexes recently dropped by mid‑teens percentages in a few days’ trading as expectations of progress on managing traffic through the Strait of Hormuz briefly improved sentiment. Yet, despite this swift recovery from a price spike following Houthi attacks on Saudi tankers, the possibility of renewed attacks continue to pose upside risks to fuel prices over the months ahead.

Supply chain capacity is generally improving. Ocean freight space has increased on major Asia–Europe routes, air cargo growth remains positive, European road freight continues to expand modestly and greater UK warehouse availability is giving occupiers more choice.
However, the benefits are not being felt equally across every market or trade lane.

Weather disruption in Asia, low water levels in Europe and continuing diversions around the Cape of Good Hope are affecting schedules and costs. At the same time, carriers are actively managing capacity, fuel remains a significant pricing risk and new customs and regulatory requirements are changing established cargo flows.

For shippers, the market is becoming less about widespread capacity shortages and more about identifying where opportunity and risk now sit within increasingly divergent transport markets.

Ocean freight

Ocean freight conditions are becoming more favourable on some major routes, but the market remains significantly influenced by capacity management, geopolitical disruption and changing demand patterns.

Asia–Europe provides one of the clearest examples. Capacity has expanded by around 13% year on year against demand growth of almost 12%, improving access to space and creating greater competition between carriers. This is beginning to feed through into softer pricing, particularly on Asia–North Europe and Mediterranean routes.

The latest market movement reinforces that trend, with Asia–Europe spot rates declining 1% while Transpacific pricing has moved in the opposite direction, with USWC indexed spot pricing rising 10% WoW. Across the major East–West trades, however, around 93% of scheduled sailings between mid-August and late September are still expected to operate, suggesting that the underlying network remains relatively resilient.

Carriers continue to use blank sailings strategically to balance capacity with demand and protect pricing. This is particularly evident on the Transpacific, where the majority of currently announced East–West cancellations are concentrated.

Operational risks also remain significant. Around 6.5% of global container capacity continues to be absorbed by longer Cape of Good Hope routings. Security concerns around the Red Sea and Strait of Hormuz remain unresolved, while recent typhoon disruption at Asian ports and low water on the Rhine are affecting both ocean schedules and inland connections.

Conditions also vary considerably by trade lane. Indian Subcontinent services remain tighter than the core Asia–Europe market, with congestion, strong export demand and lower schedule reliability making advance planning important. Middle East and Red Sea movements remain among the most challenging, with tight capacity, longer lead times and elevated risk-related costs.

For shippers, the broader direction is encouraging, but falling rates on individual corridors should not be mistaken for a wholesale return to pre-disruption conditions.

Summary:

• Asia–Europe capacity growth is slightly ahead of demand, improving access to space.
• Shanghai–New York indexed rates increased 10%, while Shanghai–Los Angeles rose 6% WoW, mid-August.
• Around 93% of scheduled East–West sailings are expected to operate through the coming weeks
• Geopolitics, weather, inland disruption and Cape diversions continue to affect reliability and costs.

Air freight

Global air cargo continues to grow, but the market is becoming increasingly fragmented as regulation, geopolitical disruption and sector-specific demand reshape individual trade lanes.

Worldwide tonnages remain above last year, with July volumes approximately 5% higher year on year. Growth has moderated from June, however, reflecting slower expansion from Asia Pacific, Europe and Middle East and South Asia origins.

One of the biggest changes is occurring between China and Europe. New EU import requirements introduced in July have increased the cost and complexity of low-value e-commerce movements, contributing to a sustained reduction in China and Hong Kong–Europe volumes.

Combined China and Hong Kong tonnages to Europe fell around 9% between June and July and were approximately 12% below last year. Hong Kong, with its greater exposure to e-commerce traffic, has experienced the sharpest adjustment.

This changing demand pattern is also feeding into pricing. China and Hong Kong–Europe spot rates have fallen substantially from their June peaks, although the wider Asia Pacific–Europe market remains above 2025 levels.

Elsewhere, demand remains considerably stronger. High-tech cargo, including electronics, semiconductors and infrastructure associated with AI and data centres, continues to support capacity requirements on selected routes.

Middle East capacity is recovering as operating conditions improve, but remains below levels seen before the latest conflict. Fuel and security-related costs therefore continue to influence pricing on affected corridors.
The overall airfreight market is consequently cooling rather than weakening. Global volumes remain above last year and rates remain elevated, but significant differences between corridors mean shippers should increasingly assess capacity and pricing at trade-lane level rather than rely on global trends.

Summary:

• Worldwide air cargo tonnages remained around 5% higher year on year in July.
• New EU import rules are reshaping China and Hong Kong–Europe e-commerce flows.
• Asia Pacific–Europe pricing is easing but remains above last year's levels overall.
• High-tech demand and Middle East capacity constraints continue to support selected markets.

Road freight

UK and European road freight remains resilient, but rising operating costs, regulatory change and structural pressure on carrier capacity continue to shape pricing and service availability.

Fuel has been one of the biggest influences during 2026. UK diesel prices rose sharply between February and April before partially retreating, with the impact passing through to transport pricing at different speeds. Spot rates tend to respond quickly, while contract pricing often incorporates fuel movements later through adjustment mechanisms.

The result is a market where softer demand does not necessarily translate directly into lower transport costs. Labour, fuel, tolls, compliance and fleet costs remain embedded in carrier pricing, limiting the scope for significant reductions.

The underlying health of the UK haulage sector is another consideration. More than 2,000 haulage businesses entered insolvency between 2021 and 2025, highlighting the financial pressure facing smaller operators and contributing to continued consolidation.

European road freight is nevertheless forecast to expand during 2026, with stronger growth opportunities emerging in Central-Eastern and Southern Europe. Individual corridors are also behaving differently. UK–Germany contract rates, for example, rose significantly during the first half of the year, reflecting both operating costs and stronger carrier pricing power.

August introduces additional seasonal pressure. Driver holidays and European factory shutdowns reduce available capacity, while the EU Entry/Exit System adds another potential source of disruption around Channel crossings.

New tachograph and driving-time requirements applying to smaller vehicles engaged in international movements are also increasing compliance requirements for express and dedicated van operations.

For shippers, this combination makes reliability and capacity increasingly important considerations alongside headline rates. Longer-term carrier relationships, earlier bookings and greater flexibility over routes and modes can provide valuable protection against short-term disruption.

Summary:

• Fuel, labour and regulatory costs continue to underpin road freight pricing.
• Carrier consolidation is reducing some of the flexibility previously available in the market.
• UK–EU corridors face additional seasonal and border-related pressure during late summer.
• European growth remains modest overall, with stronger prospects in selected regional markets.

Contract Logistics

The UK logistics property market is moving into a more favourable phase for occupiers, with greater availability and slower take-up creating more choice after several years of exceptionally tight supply.

First-half logistics take-up reached 10.9 million sq ft across 43 transactions, while total availability increased to 46.7 million sq ft. This pushed the national vacancy rate above 7%, as both second-hand properties and newly completed developments became available.

The shift is significant for businesses reviewing their distribution networks. Greater availability can create more opportunities to secure suitable facilities, negotiate lease terms or introduce additional capacity without the intense competition for space experienced during earlier market peaks.

However, the change does not mean warehouse costs are falling universally. Prime rents in established logistics locations remain relatively resilient.

At the same time, the development pipeline has reduced, with around 19.9 million sq ft under construction. A smaller pipeline could ultimately restrict future supply, particularly in established locations where occupiers compete for modern, well-connected facilities.

The market is therefore moving towards a more balanced position rather than outright oversupply. Businesses have greater negotiating leverage and more options today, but location, specification, labour availability and transport connectivity continue to determine the true operational value of individual sites.

For shippers and retailers considering network changes, the current environment may provide an opportunity to review warehouse strategy, temporary capacity and outsourcing requirements before stronger demand absorbs some of the additional space.

Summary:

• UK logistics vacancy has risen above 7%, increasing occupier choice.
• First-half take-up reached 10.9 million sq ft across 43 transactions.
• Greater availability is creating more scope for occupiers to negotiate.
• Prime rents remain resilient and a smaller development pipeline could constrain future supply.

Across all modes and regions, market conditions continue to evolve rapidly, creating both challenges and opportunities. Whether you're reviewing transport options, securing capacity or strengthening resilience, Logicall's logistics specialists can help you make informed decisions based on the latest market intelligence.

Contact our team to learn how we can help you identify opportunities to streamline operations, improve customer service and reduce total supply chain costs, while ensuring your logistics network is fit to drive future growth.