Freight market outlook 2025: Navigating uncertainty and change

The freight industry faces a challenging 2025, with ongoing diversions around Africa, potential labour strikes, and looming tariff changes shaping the air and sea freight landscape. 

While best and worst-case scenarios could unfold, the most likely outcome lies somewhere in between, creating a complex and dynamic environment for shippers and carriers alike.

Red sea disruptions and capacity adjustments

Persistent attacks in the Red Sea continue to divert container traffic via the Cape of Good Hope, extending transit times and keeping freight rates elevated. Even if hostilities end, a lengthy adjustment period is likely as shipping lines reintroduce Red Sea routes.

With carriers set to phase in new networks in February and March, further changes to accommodate Suez transits may not occur before August. This transitional phase could temporarily worsen congestion and delays. However, once stabilised, the market would benefit from restored transit times and reduced rates.

The reintroduction of capacity also raises concerns about overcapacity. Carriers are actively working to mitigate this risk through measures like scrapping older vessels, reducing charter fleets, slow steaming, and blank sailings. While these steps may stabilise rates, their effectiveness will depend on demand levels throughout the year.

Labour strikes and tariff impacts

Despite agreement on outstanding issues on the 8th January, the threat of strikes at US East and Gulf coast ports has not entirely lifted. And while they are theoretically unlikely, they could remain a possibility until Summer 2025.

Tariffs, on the other hand, remain a critical factor. New US tariffs in 2025, particularly on Chinese imports and goods from Canada and Mexico, could drastically reshape trade flows. Anticipation of these tariffs has already led to front-loading, as shippers move goods early to avoid higher costs. This behaviour may disrupt seasonality, creating spikes in demand and rates before tariffs take effect, followed by lower volumes afterwards. Additionally, tariffs could encourage sourcing shifts to countries like Vietnam and India, further altering global trade dynamics.

Air freight under pressure

Air freight, driven by strong eCommerce demand from Asia, enjoyed robust growth in 2024, but 2025 presents significant headwinds. Potential changes to the US ‘de minimis’ thresholds could curb eCommerce shipments, while Trump’s proposed tariffs may disrupt transpacific flows further.

Capacity constraints, already a challenge, could ease slightly if eCommerce demand slows. This would benefit transatlantic shippers, who saw air cargo spot rates from Western Europe to the US double during the 2024 peak season. However, other pressures loom, including the EU’s ReFuelEU Sustainable Aviation Fuel (SAF) mandate, which took effect on 1st January 2025, requiring a minimum of 2% SAF at EU airports—raising airline costs.

A potential second round of US port strikes beginning 15 January could also push up demand for air freight, driving rates higher if shippers turn to air transport to avoid delays.

A year of uncertainty

2025 will be a year of adjustment for the freight industry as carriers and shippers navigate geopolitical risks, evolving capacity challenges, and shifting trade policies.

Shippers must prepare for fluctuating demand and rates, anticipate potential disruptions, and stay informed. Flexibility and proactive planning will be key to navigating the complexities of 2025 and ensuring long-term success.

For urgent and sensitive shipments, Metro offers tailored airfreight, charter, and sea/air solutions. With block space agreements (BSA) and capacity purchase agreements (CPA), to guarantee space and competitive rates on the busiest routes.

In a volatile sea freight market, our fixed-rate agreements on popular shipping routes reduce risk and provide essential budgetary certainty. 

To explore how Metro’s carrier agreements could optimise your supply chains and save you money in 2025, please EMAIL our Managing Director Andy Smith.