Global Freight Market Report – May 2025
The global freight landscape in May was shaped by geopolitical disruption, tariff-driven demand shifts, and continued cost pressures across every mode.
Ocean carriers saw transpacific bookings surge following a temporary pause in US-China tariffs, disrupting capacity on Asia-Europe lanes. Air cargo volumes climbed as shippers rushed to move goods ahead of regulatory changes, while overland markets saw mixed performance despite a seasonal lift.
Warehousing and contract logistics continued to expand, supported by automation and strategic inventory planning, but rising labour and property costs remain key concerns. As we move into summer, shippers are urged to plan ahead, secure space early, and prepare for further turbulence in rates and schedules.
Ocean Freight
A sudden surge in transpacific demand defined the month, as US importers rushed to move goods ahead of the reinstated August 14 tariff deadline. The temporary 90-day pause in US-China tariffs caused a scramble to secure space, forcing carriers to reinstate sailings and redirect vessels from other trade lanes. The Asia–Europe corridor was particularly affected, with capacity cut by an estimated 17% week-on-week from mid-June.
Ongoing Red Sea disruptions continue to impact schedule reliability, with vessels rerouting around the Cape of Good Hope to avoid the Suez Canal. These diversions, while necessary, add significant time and cost to voyages. European ports also reported growing congestion, with delays in Antwerp, Hamburg, and Valencia exacerbated by labour unrest and slower vessel turnaround times.
Spot rates jumped in response to tightening supply. The Shanghai–Los Angeles rate rose 17% in a single week, with Shanghai–New York not far behind. Asia–Europe rates also edged higher, supported by general rate increases (GRIs) and reduced vessel availability.
While new ship deliveries are helping replenish capacity, many are replacing older tonnage or diverted to trades under pressure. Shippers should anticipate continued blank sailings and higher costs through July.
• US importers front-load to beat August tariff deadline
• Asia–Europe capacity slashed as vessels shift to transpacific
• Red Sea diversions and port strikes delay schedules
• Spot rates spike across US and Europe lanes
Air Freight
Air cargo demand rose sharply in May, particularly on China–Europe lanes, where chargeable weight increased 11% year-on-year. Fashion, electronics, and eCommerce flows were strong, while US-bound volumes recovered after a sharp April drop. Many shippers are accelerating air shipments to avoid potential disruptions from US tariff and De Minimis policy changes, which will tighten customs treatment of low-value parcels.
Load factors on outbound Asia flights exceeded 90% throughout the month, with capacity unable to match demand growth. Airlines are adding seasonal belly-hold services for the summer, but the pace of deployment remains cautious due to geopolitical and regulatory uncertainties. Transpacific volumes stabilised toward month-end, although mid-high spot rates remain the norm for eastbound US shipments.
Jet fuel prices fell 21% year-on-year, offering some relief to carriers. However, overall capacity remains constrained and front-loading behaviour is driving volatility. Latin America and intra-Asia corridors posted further demand gains, while intra-European and Middle East–Europe routes saw contraction. With further disruptions possible in H2, shippers are advised to secure capacity early and consider multimodal solutions.
• China–Europe air cargo demand up 11% YoY
• Asia load factors exceed 90%, squeezing space
• Jet fuel down 21% YoY, but rates stay elevated
• De Minimis reform adds uncertainty for US importers
Road Freight
April brought welcome momentum to European road freight after a sluggish Q1. Warmer weather, a late Easter, and renewed retail activity drove a 33% surge in haulage volumes, with demand for articulated vehicles rising 45% year-on-year. This seasonal uptick helped lift the TEG Road Transport Price Index to 123.8, driven largely by increased pricing power in the haulage segment.
Despite the April spike, underlying challenges remain. Q1 saw falling contract and spot rates amid weak consumer demand, and many shippers remain cautious. While courier volumes were flat in April, pressure on delivery windows and rising wage expectations continue to shape pricing strategies. The supply of articulated vehicles remains tight, with a 10.9% drop in artic availability noted in the UK alone.
Cost inflation is still a key issue. Diesel prices dipped 2.17% month-on-month in April, but driver wages are rising across the board. Regulatory uncertainty, slower fleet renewal, and skills shortages continue to strain the market, through what may be a volatile summer.
• Haulage volumes rose 33% YoY in April
• Articulated vehicle supply down 10.9%
• Driver shortages exceed 400,000 across Europe
• Wage and compliance costs continue to rise
Contract Logistics
Contract logistics in the UK and Europe is on a growth trajectory, fuelled by rising demand for tech-enabled services and resilient supply chain strategies. The UK market is forecast to grow at 7.3% annually through 2030, supported by government pledges totalling £625 million for infrastructure and workforce development.
Retail, eCommerce, and aftermarket logistics are leading adoption of AI, robotics, and real-time inventory visibility. However, cost pressures remain acute, particularly around labour and electric fleet transition. Policy uncertainty on emissions and EV taxation is slowing investment decisions. Despite this, providers like Logicall that embrace digital transformation are well placed to meet rising service expectations and margin pressures.
• Rental and capital values rose 0.3–0.4% in March
• Automation and AI adoption driving long-term operational efficiency
• £625m UK investment targets training and automation
• Labour and EV fleet costs continue to pressure margins
Warehousing
The UK warehousing market continues to perform strongly, with Q1 take-up up 16% to 5.0 million sq ft. Fulfilment centres dominate activity, reflecting growth in direct-to-consumer models and rising service expectations. Speculative development remains limited, keeping space tight and pushing rents up by 0.4% in March.
Automation, ESG compliance, and long-term flexibility are now must-haves. More than 98,000 fulfilment warehouses now operate in the UK – a 42% increase since 2021 – and demand for Grade-A space shows no sign of slowing. Overseas capital, particularly from North America, remains active. With rental growth projected at 4% this year, prime assets with automation and last-mile capabilities will continue to command a premium.
• Fulfilment-led demand drives 16% rise in Q1 take-up
• More than 98,000 fulfilment warehouses now in the UK
• Prime rents forecast to grow 4% in 2025
• Supermarkets and online retailers reactivating expansion plans
Stay informed. Stay compliant. Stay ahead.
As global trade continues to shift under the weight of economic pressure, tariffs, and capacity disruption, Logicall is here to help you navigate every turn.
Our data-led insights and proactive logistics support keep your supply chain resilient, efficient, and fully compliant with evolving regulations — wherever you operate.
If you’d like tailored advice or support on any of the issues raised in this report, we’re ready to help.