Global Freight Market Report - March 2025

The global freight market continues to undergo profound shifts in 2025, shaped by macroeconomic fluctuations, regulatory adjustments, and evolving trade dynamics.

While global GDP is forecasted to expand by 3.3% according to the IMF, regional growth disparities persist, with the UK and Eurozone expected to grow at a more moderate pace of 1.6% and 1.0%, respectively.

Air, sea, road, logistics, and warehousing markets are actively adjusting to new challenges and opportunities, with digitalisation, automation, and network optimisation emerging as key drivers of efficiency and resilience.

Air Freight

Dynamic demand shifts across regions dominated February’s air freight market. Global tonnages increased 5% year-on-year, but China to the USA shipments fell 10%, with spot rates initially declining 9%. However, more recent data shows rates on this lane recovering, with outbound Hong Kong spot rates rising 2.5% week-on-week and standing 12% higher year-on-year.

• China-USA Trade: Early-year weakness saw volumes drop by 10%, but recent weeks have shown rate recovery, particularly out of Hong Kong.
• European Outbound Trends: London Heathrow rates declined by nearly 8% week-on-week, reflecting softening demand from key European hubs.
• Asia-Pacific Resilience: Chargeable weight from China to Europe increased 4% year-on-year, although Shanghai-Europe spot rates softened slightly.

The global air cargo market continues to see dynamic shifts, with volumes rising 5% year-on-year despite regional variations in performance. While overall demand remains robust, market conditions are being shaped by evolving trade policies, fluctuating eCommerce trends, and shifting economic sentiment.

Sea Freight

The ocean freight industry remains in a state of transformation, with global shipping lines adapting to shifting supply chain patterns, regulatory changes, and alliance restructurings.

• Capacity Adjustments: Following record vessel deliveries in 2024, capacity growth is slowing to 5% in 2025.
• Rate Volatility: The Shanghai Containeried Freight Index (SCFI) is down 17% since January, highlighting ongoing price fluctuations despite sustained demand.
• Global Disruptions: Red Sea diversions are gradually easing, potentially reintroducing 2 million TEU into circulation and influencing capacity balance.

With EU Emissions Trading System (ETS) regulations adding compliance costs and port congestion persisting, ocean freight carriers are focusing on operational efficiencies, blank sailings, and service realignments to maintain rate stability.

Road Freight

The European and UK road freight markets are poised for moderate growth in 2025, with forecasts projecting a 2% increase. However, challenges such as driver shortages, fuel costs, and economic uncertainty continue to shape industry dynamics.

• Market Value: The European road freight market is set to reach €436.9 billion in 2025, supported by improved consumer spending and cooling inflation.
• Labour Constraints: Unfilled driver positions could exceed 60% by 2026, exacerbating operational challenges.
• Freight Rate Movements: Q4 2024 saw contract rates rise by 2.8 points, while spot rates experienced only a marginal 0.5-point increase.

Digitalisation and sustainability initiatives are gaining momentum, with investments in AI-powered route optimisation and alternative fuel vehicles playing a critical role in industry evolution.

Contract Logistics

The UK contract logistics sector is projected to reach £100 billion by 2034, driven by eCommerce expansion and the increasing complexity of supply chain operations. Market players are prioritising efficiency, automation, and omnichannel strategies to enhance service capabilities.

• Market Consolidation: Acquisitions and strategic partnerships are accelerating as firms seek to expand service portfolios.
• Labour & Cybersecurity Challenges: Labour shortages and cybersecurity risks are slowing the adoption of next-gen technologies.
• Facility Costs: After a 5.5% rise in 2024, annual increases are expected to moderate to 3.7% in 2025.

The sector is embracing AI-driven inventory management and sustainable logistics solutions, ensuring resilience amid changing consumer and regulatory demands.

Warehousing

The warehousing sector in the UK and Europe continues to experience sustained demand, with eCommerce growth and supply chain optimisation driving expansion.

• Market Growth: The European warehousing sector is projected to reach €95.9 billion by 2028, with a CAGR of 1.1%.
• UK Leadership: The UK market is expected to maintain its position as Europe's largest warehousing hub.
• Rental Trends: Rental growth is moderating, with projected annual increases of 3% through 2025-2026, following a surge of 13.8% in 2023.

Amid rising operational costs and labour shortages, investments in automation and sustainable infrastructure remain a priority for warehousing operators aiming to future-proof their facilities against market uncertainties.

While economic uncertainty and regulatory changes present challenges, we remain focused on enhancing supply chain efficiency and resilience for our clients.

Our commitment to proactive action and timely insights ensures you stay informed and prepared to optimise your logistics operations.