Global freight market report – October

Manufacturing activity remains weak in key advanced economies, with the UK and US both reporting sub-50 PMI readings, while Asia’s post-Golden Week slowdown added further complexity to trade scheduling.

Global inflation indicators show slight improvement. Oil and bunker fuel prices have stabilised, but capacity imbalances continue to weigh on ocean and air markets. Strength in eCommerce and contract logistics offset by softer industrial freight and fragile consumer sentiment.

The IMF’s 2025 growth projection of 3% still stands, although downside risks remain tied to regulatory change, energy volatility, and geopolitically influenced routing. Across all modes, the industry focus remains on resilience and digitalisation to mitigate cost pressure and maintain service continuity.

Ocean Freight

Container shipping steadied in October following months of decline, as carriers implemented Freight All Kinds (FAK) and general rate increases (GRIs) across main east–west corridors. The brief rally reflects efforts to control sliding spot rates, with Drewry’s composite World Container Index rising 2%—its first increase in more than four months.

Despite the rebound, medium-term conditions remain weak. A persistent oversupply of capacity, high new-build deliveries, and subdued demand growth suggest renewed rate pressure heading into November. While congestion has eased at major ports, utilisation levels remain inconsistent, and rate stabilisation is likely temporary.

• Global freight index rose 2% after 17 consecutive weekly declines
• Asia–Europe rates up 6% to Rotterdam, 2% to Genoa following GRIs
• Transpacific spot pricing increased 1% as exports resumed post-holiday
• Further GRI attempts set for early November are expected to see limited success

Air Freight

The global airfreight market entered Q4 on mixed footing. European imports remain solid, with inbound tonnage about 4% higher year on year, supported by active restocking in the retail and technology sectors. Golden Week closures temporarily reduced Asia-origin volumes, but recovery was swift, leaving industry-wide capacity balanced and pricing largely stable.

Transatlantic markets stayed steady, with balanced trade in both directions. India–Europe flows strengthened significantly, offsetting softer performance on China–US lanes. Average rates were 4% lower year on year, indicating soft global pricing, although European routes continue to outperform most major trade lanes.

• Airfreight volumes down 3% week on week but up 4% YoY
• Imports into Europe increased 4%, confirming robust inbound demand
• Asia–Pacific tonnage declined 9% during Golden Week, then recovered
• Global rate average -4% YoY; Europe recorded only a 2% decline

Road Freight

European road freight indicators suggest incremental recovery, anchored by industrial restocking and manufacturing-led volumes. Spot indices are stabilising as reduced truck registrations and chronic driver shortages limit available capacity. Retail and FMCG flows remain subdued, but cross-border demand is improving.

Diesel prices fell earlier in Q2 before rebounding in late summer, keeping operational margins tight. Labour costs, now roughly 4% higher year on year, remain a leading inflationary pressure. Despite lingering weakness in consumer spending, haulage rates show resilience thanks to sector-wide cost discipline and moderate demand growth.

• EU truck registrations down 15%, restricting fleet expansion
• European freight rate index up 2.3 points in Q3
• Spot rates about 2% lower YoY, contract rates marginally higher
• Eurozone PMI approaching 50, indicating stabilising manufacturing activity

Contract logistics

Contract logistics continued to expand across the UK and Europe, supported by automation, eCommerce growth, and long-term service partnerships. Providers are increasingly capitalising on digital transformation and analytics to deliver cost-efficient and sustainable solutions amid rising labour and energy costs.

Investment in advanced fulfilment systems, robotics, and AI-driven warehouse management is accelerating. Clients are shifting toward integrated, scalable solutions that combine visibility, responsiveness, and ESG compliance. Although inflation persists, automation and longer-term contracts are helping buffer profitability and improve margins.

• 62% of new contract logistics business now secured on multi-year terms
• eCommerce and retail account for over 30% of total sector revenue
• Labour and energy remain the primary cost drivers across Europe
• Advanced automation adoption expanding rapidly among 3PL leaders

Warehousing

Warehousing performance remains strong, shaped by high occupancy, technology investment, and sustainability-led development. European and UK operators report steady demand for modern, flexible facilities, with automation and renewable energy integration now critical for competitive positioning.

Building pipelines continue to expand, moderating rent growth after several years of sharp increases. Developers are prioritising strategic locations near transport corridors and ports, while secondary markets experience rising availability. ESG-linked leases, automation incentives, and shared-user models are defining new industry standards.

• Average European and UK occupancy above 85% in Q4
• Prime rents up 4% YoY, easing from double-digit 2023 growth
• 40% of new warehouse projects incorporate automation or robotics
• Sustainability and energy-efficiency upgrades driving asset investment

Logicall is committed to supporting clients overcome supply chain challenges and volatility with confidence. Our data-driven, proactive approach leverages integrated digital solutions, supply chain visibility, and robust sector expertise.

Whether adapting to shifting rates, managing compliance challenges, or scaling operations to meet new sustainability targets, Logicall partners with customers to build resilient, future-ready logistics networks tailored to their market realities.