Global Freight Market Report – July
Global freight markets in July are defined by diverging economic trends, tariff aftershocks, and continued supply chain pressures.
Ocean freight is split between transpacific oversupply and European congestion, while air cargo holds up on Asia–US lanes but softens elsewhere. Road freight faces mixed recovery, contract logistics continues to expand on eCommerce momentum, and warehousing demand remains robust, driven by automation and last-mile needs.
Shippers should prepare for further volatility in H2, monitor rates closely, and secure capacity early to stay ahead of shifting conditions.
Ocean freight
The ocean freight sector is facing stark contrasts across regions. Asia–Europe trades remain resilient but are under strain from congestion and alliance reshuffles. In contrast, transpacific lanes are struggling with excess capacity, driving down spot rates.
European ports, particularly in North Europe, continue to struggle with vessel backlogs, while equipment imbalances add further complexity. Rising bunker fuel prices are adding to the cost burden across major lanes, potentially making cost control difficult.
While new vessel deliveries offer some relief, many are replacing older tonnage or being diverted to trades under pressure, keeping supply-demand balances fragile.
• Shanghai–North Europe spot rates up 18% in early July
• Far East–US West Coast rates down 51% over six weeks
• Global container trade up 11% YoY, led by intra-Asia flows
• Bunker prices rising ~10% month-on-month, adding cost pressure
Air freight
Air cargo is also a mixed landscape. Asia–US lanes remain strong, with year-on-year rate surges driven by tariff-driven demand and limited freighter capacity. Europe–North America routes, by contrast, are under pressure, with rates softening and outbound capacity expanding.
Freighter redeployments are reshaping flows, with capacity shifting toward intra-Asia and Latin America. However, OEM delays and a global wide-body shortage are capping longer-term growth, leaving the market vulnerable to seasonal peaks and disruptions.
Spot bookings now account for nearly half of all volume, reflecting shipper caution in a market defined by rate swings and policy uncertainty.
• China–US air rates up 38% YoY; Vietnam–US up 147%
• Global tonnage +11% YoY in early July despite prior dip
• London Heathrow outbound rates surged 25% on mid-month demand
• OEM delays, freighter shortages limit capacity expansion
Road freight
European road freight shows regional contrasts as summer progresses. Germany’s recovery is lifting volumes, but widespread driver shortages and falling haulage demand elsewhere continue to weigh on the sector. Stable diesel prices are providing short-term relief, but underlying cost pressures remain.
The TEG Index fell 1.25% in June, driven by a 13% drop in haulage demand. While fleet investment is ongoing, with HGV registrations up 16.3%, capacity mismatches are limiting market flexibility. Labour shortages, particularly in Eastern Europe, are amplifying these pressures.
As summer holiday demand builds, operators face a challenging mix of tight margins, rising wage demands, and global trade uncertainty.
• TEG Index fell 1.25% in June; haulage demand down 13%
• 426,000 truck driver vacancies across Europe, nearly double YoY
• Diesel prices down ~9% YoY, easing fuel costs
• HGV registrations up 16.3%, but capacity gaps persist
Contract logistics
The contract logistics sector in the UK and Europe is expanding steadily, driven by eCommerce growth, digitalisation, and evolving supply chain demands. High-street distribution, online fulfilment and aftermarket logistics are driving adoption of automation, real-time inventory tools, and AI to improve scalability and service levels.
However, rising labour costs, post-Brexit trade frictions, and ageing infrastructure are squeezing providers. Inbound flows from the EU dominate road freight, while minimal cabotage limits flexibility during peak periods.
Workforce shortages, particularly among drivers and warehouse staff, are amplifying margin pressures.
Across Europe, investment in automation and sustainability is seen as critical to balancing cost control with competitiveness — but capital intensity and policy uncertainty remain barriers.
• Global market projected to grow at 7.1% CAGR to 2030
• 75.9% of UK road freight inbound, dominated by EU flows
• UK inbound transport rates over 2x outbound rates
• Labour shortages and wage inflation driving up operational costs
Warehousing
The warehousing market continues its upward trajectory, with Q2 take-up jumping 34% quarter-on-quarter to 11.7 million sq ft. Fulfilment-led demand is the key driver, supported by eCommerce growth and rising last-mile needs.
Regional UK hotspots like the Midlands and North-West are seeing strong activity, while London’s last-mile assets face sustained upward rent pressure. Energy-efficient, automated, and flexibly designed facilities are now essential to meet evolving supply chain demands.
Prime industrial yields have remained stable at 6% for four consecutive months, underscoring investor confidence in the sector’s resilience and long-term fundamentals.
• Q2 take-up +34% QoQ, totalling 11.7 million sq ft
• 345% growth in 1M+ sq ft warehouses over the past decade
• Prime industrial yields stable at 6% for four months
• London last-mile assets facing sustained upward rent pressure
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