Global freight market report – March
The logistics market continues to show underlying resilience, supported by steady UK manufacturing expansion and stabilising demand conditions. The S&P Global UK Manufacturing PMI remains in growth territory at 51.7 indicating continued output recovery, albeit at a more measured pace.
However, the operating environment has shifted quickly. Disruption linked to the Middle East crisis is influencing global supply chains across ocean, air and inland networks, introducing volatility into capacity, transit times and costs. Rising fuel prices are feeding directly into transport pricing, while rerouting and network adjustments are reducing efficiency across key east–west corridors.
As a result, market conditions are becoming more complex rather than weaker. Capacity remains available in some sectors, but is increasingly fragmented, while cost pressures and operational risk are rising. For shippers, the focus is shifting towards flexibility, multimodal planning and proactive supply chain management to maintain flow and control in a less predictable environment.
Ocean Freight
Ocean freight markets remain broadly stable in terms of demand, but operating conditions have become significantly more complex. Middle East disruption is extending voyage times, forcing rerouting and reducing effective capacity across key east–west corridors.
Rising bunker costs are a central factor. Marine fuel prices have increased sharply, in some cases doubling since late February, materially increasing carrier operating costs and driving the introduction of surcharges.
At the same time, longer transit times are tightening available vessel capacity. Asia–Europe services are
seeing extended routings, adding several days to transit schedules and contributing to congestion at major transhipment hubs in Asia and the Mediterranean. Schedule reliability, which had recovered to around 60%, is now trending downwards as vessels arrive off-window.
Rates are beginning to respond. While overall indices remain relatively stable, upward pressure is emerging on both spot and contract pricing, supported by higher costs and reduced network efficiency. Transatlantic trades remain comparatively balanced, but regional and Asia–Mediterranean routes are seeing greater disruption.
Overall, the market is shifting from stable to constrained, with cost escalation and operational complexity now the defining features.
Summary:
- Stable demand but reduced effective capacity
- Bunker prices up sharply, driving surcharges
- Rerouting increases transit times and congestion
- Rates firming as costs and disruption increase
Air Freight
Air freight markets have entered a more volatile phase, driven by significant disruption to global capacity linked to the Middle East. At the start of March, up to 25% of lift on the Asia–Europe corridor was removed, with widespread flight cancellations and rerouting reshaping global air networks.
Demand remains relatively strong, supported by e-commerce, technology shipments and post-Lunar New Year recovery, with volumes up approximately 5–6% year-on-year. However, capacity fragmentation is creating pronounced regional imbalances.
Middle Eastern hubs, which typically handle a substantial share of east–west cargo, are operating below normal levels. This has forced cargo to reroute via North Asia and secondary gateways, increasing transit times and reducing predictability. South Asia has been particularly affected, with severe constraints on uplift capacity.
Rates have responded sharply. Bangladesh–Europe pricing has increased by up to 200%, while broader South Asia–Europe lanes have seen increases of over 80%. Jet fuel costs, up around 58% week-on-week, are further contributing to pricing pressure.
While some capacity is gradually returning, the market remains fragmented, with volatility expected to persist in the short term.
Summary:
- Capacity reduced significantly on key east–west lanes
- Strong demand but highly uneven regional supply
- Rerouting via secondary hubs increases complexity
- Rates rising sharply, particularly from South Asia
Road Freight
Road freight markets across the UK and Europe have experienced a mixed start to 2026. Seasonal softness and increased vehicle availability led to short-term rate declines, with the UK transport index falling by over 3% month-on-month in February.
However, conditions are evolving quickly. Rising fuel costs, linked to higher crude prices, are beginning to feed into operating expenses, with UK diesel prices increasing by more than 30% since the start of the Middle East crisis.
With ocean and air capacity constrained in the Gulf, more cargo is being diverted onto land-based networks, particularly across regional corridors linking Oman, Saudi Arabia and the UAE. This is tightening trucking capacity in these areas and extending transit times.
In Europe, underlying fundamentals remain relatively stable, supported by modest economic growth and improving inflation conditions. Demand for multimodal solutions is increasing, with Asia–Europe road volumes rising by around 15% year-on-year as shippers seek alternatives to disrupted traditional routes.
The result is a two-speed market: short-term softness in Europe, offset by tightening capacity and rising costs in disruption-affected corridors.
Summary:
- Seasonal softness reduces short-term rates
- Fuel costs rising, increasing operating pressure
- Middle East disruption boosts regional trucking demand
- Multimodal and long-haul road solutions gaining traction
Contract Logistics
Contract logistics continues to deliver steady growth, supported by increasing supply chain complexity, e-commerce demand and ongoing outsourcing across key sectors. The UK market is valued at approximately £20–25 billion, with projected annual growth of around 3–4.5%.
Shippers are expanding the scope of outsourced services beyond traditional warehousing and transport to include inventory management, returns handling and value-added services such as kitting and light assembly. This reflects a broader shift towards integrated, end-to-end supply chain solutions.
Technology is becoming a key differentiator. Investment in automation, robotics and data-driven analytics is helping providers improve efficiency, increase throughput and deliver greater visibility across increasingly complex supply chains.
At the same time, cost pressures remain significant. Labour shortages, wage inflation, energy costs and limited availability of modern warehousing are driving a continued focus on productivity and network optimisation. ESG requirements are also shaping procurement decisions, with sustainability increasingly embedded into long-term contracts.
Pricing remains relatively stable compared with transactional freight markets, supported by multi-year agreements and indexation mechanisms linked to underlying cost drivers.
Summary:
- Strong outsourcing demand across sectors
- Technology and automation drive efficiency gains
- Cost pressures reinforce need for optimisation
- Stable pricing supported by long-term contracts
Warehousing
Warehousing markets are showing signs of recovery, supported by improving occupier confidence and renewed demand for large-scale distribution space. UK take-up reached over 40 million sq ft in 2025, with further growth expected as deferred decisions return to the market.
However, supply conditions remain uneven. Availability is still elevated, particularly for secondary space, while new development has slowed significantly, with completions at their lowest level since 2018. This is contributing to a gradual rebalancing of supply and demand.
Cost pressures remain a defining feature. Warehousing labour costs in Europe have increased by around 30% since 2022, while overall occupancy costs remain high relative to other global regions. These factors are driving a strong focus on efficiency, automation and consolidation into higher-quality facilities.
Geopolitical disruption is also influencing strategy. The Middle East situation is reinforcing the importance of inventory positioning, with some businesses increasing buffer stock and reviewing network design to improve resilience.
Rental growth continues, but is becoming more selective, with pricing increasingly linked to asset quality, location and operational performance.
Summary:
- Demand recovering, led by large-scale distribution
- Availability remains elevated but development slowing
- Cost pressures driving automation and consolidation
- Rental growth continues, but increasingly selective
In a market defined by disruption, rising costs and shifting capacity, proactive planning is essential to maintain control and protect performance.
Logicall combines real-time data, market intelligence and hands-on expertise to help you optimise cost, secure capacity and build resilience across every stage of your supply chain.
Speak to Logicall today to access tailored insights, scenario planning and freight strategies designed to keep your business competitive now and into the future.