Houthis 1440x1080 1

Red Sea Return Scuttled by Houthi Vessel Sinking

Jul 22, 2025 | , , , , , , , , , , , , , , , , , , ,

The deadly July 7 attack on the Eternity C cargo vessel by Yemen’s Houthi rebels marks one of the most severe escalations yet in the Red Sea shipping crisis, reinforcing the view that this vital trade artery will remain off-limits for carriers through 2025. 

The Red Sea, via the Suez Canal, typically handles 30% of global container trade, linking not only Asia and Europe but also acting as a vital transit point for goods moving between Asia and North America, the Mediterranean, and even parts of Africa and Latin America. 

With most container ships now rerouting via Africa’s Cape of Good Hope, what began in late 2023 as a regional security issue has become a global supply chain disruptor, sending shockwaves far beyond the Asia-Europe corridor.

The Global Supply Chain Butterfly Effect

Asia–North America East Coast
Goods from China, Southeast Asia, and India bound for the U.S. East Coast often transit the Suez Canal. Rerouting extends voyages by up to 14 days, tightening container availability, raising costs, and pressuring ports on both coasts to manage capacity mismatches.

Africa–Europe and Africa–Asia
African exporters, including agricultural and mineral suppliers, face longer, costlier routes to reach European and Asian markets, challenging businesses from cocoa traders in West Africa to cobalt miners in the DRC.

Middle East–Europe Energy
Beyond containerised cargo, 20% of global LNG trade and 30% of global oil flows pass through the Red Sea and Strait of Hormuz. Disruptions here drive up global energy prices, affecting industries and consumers worldwide, from European factories to Latin American fuel markets.

Global Shipping Networks
With more ships tied up on extended routes, the global pool of available vessels is effectively reduced, tightening capacity on other trades, including the transpacific (Asia–U.S. West Coast) and transatlantic (U.S.–Europe), even though they don’t pass through the Red Sea.

Industry Effect

Automotive: Impacting not just Europe, but also in North America, as Tier 1 suppliers depend on globally sourced components.

Retail & Fashion: Global brands with cross-regional supply chains face timing, cost, and margin pressures.

Food & Agriculture: Grain, rice, coffee, and fruit trades are experiencing higher freight costs, threatening price inflation in developing markets.

Electronics: Longer lead times impact consumer electronics and critical components like semiconductors.

What’s clear is that the Red Sea crisis is not just a regional challenge. It’s a global supply chain stress test, that will continue to demand resilience, agility, and innovation for some time.

Metro’s supply chain management expertise and advanced MVT technology help shippers adapt on the fly; rerouting cargo, shifting transport modes, and even switching suppliers with agility and precision. From high-level network redesign to SKU-level control, we empower you to overcome disruption with confidence. EMAIL Managing Director, Andy Smith, to learn more.

Med satellite 1440x1080 1

UK Bid to Join Pan-Europe Trade Area Blocked

Jul 22, 2025 | , , , , , , , , , , , , ,

The UK government’s attempt to join the Pan-Euro-Mediterranean (PEM) Convention, a framework that simplifies supply chains and reduces tariffs across Europe, North Africa, and parts of the Middle East has been blocked by the EU.

Established in 2012 and modernised in 2025, the PEM Convention allows manufacturers in member countries to “cumulate” inputs, counting components sourced from any PEM country as local when determining a product’s origin for tariff purposes. 

So, if a Turkish manufacturer made a machine from EU-sourced parts, the item would be considered as “made in Turkey” when exported to France, benefiting from preferential trade agreements. This enables goods like cars, chemicals, and processed foods to move across borders with reduced  paperwork and lower tariffs.

The convention’s 25 members include the EU, Norway, Switzerland, Turkey, Ukraine, Egypt, Morocco, and Israel. The UK, notably, is one of the few European countries not included.

Joining PEM could ease post-Brexit trade friction, particularly for UK manufacturers relying on complex, multinational supply chains. It would:

– Reduce rules-of-origin paperwork
– Provide greater sourcing flexibility
– Support industries like automotive, chemicals, and food processing

While some experts say the impact would be moderate, others argue it’s a pragmatic step that offers clear benefits without requiring a return to the EU single market or customs union.

Why Is the UK Blocked?
Despite initially signalling openness, the European Commission has withheld support for UK accession, citing concerns that UK-made goods could unfairly qualify for low-tariff access to EU markets.

Technically, incorporating PEM provisions into the EU–UK Trade and Cooperation Agreement (TCA) would require reopening parts of the Brexit deal and EU officials have indicated they want to stick closely to the “common understanding” agreed at the May UK–EU summit, to avoid further complications.

This block has frustrated UK trade bodies, including the British Chambers of Commerce, which see PEM as a practical tool to improve trade flows.

The UK government has said it will continue to review the potential benefits of PEM and engage with the EU and other PEM members. However, with Brussels signalling little appetite to renegotiate TCA terms, short-term progress may be unlikely.

Metro’s customs specialists design tax-efficient supply chains using bonded warehousing, IPR/OPR, duty drawback, and other regimes to protect your cash flow, minimise duty exposure, and keep you fully compliant. EMAIL Managing Director, Andy Smith, to learn more

LHR BA landing

Preparing for Air Cargo Peak Season Amid Tariff Uncertainty

Jul 9, 2025 | , , , , , , ,

Air freight markets are entering the second half of 2025 in a state of volatility, as early signs of peak season demand clash with consumer caution and a shifting tariff landscape.

Despite President Trump suggesting that the next round of US tariffs may not take effect until August, the legal reality is firmer: the executive order issued on 9 April mandates that reciprocal tariffs will be enforced from 12:01 am EDT on 9 July, unless a further Executive Order is made. This deadline is already influencing behaviour across key trade routes and sectors, with shippers attempting to front-load freight and adjust their sourcing strategies.

As expected, June saw a seasonal lull across many air freight corridors. Rates out of Hong Kong to both Europe and North America softened slightly month-on-month, falling by low single digits, while year-on-year declines were sharper to North America, reflecting weaker consumer demand and reduced eCommerce.

The removal of de minimis exemptions combined with the imposition of tariffs on many goods, has triggered a pronounced shift in flows: air cargo volumes from China to the US have fallen around 15% since March, while rates have dropped by more than 15% over the same period. In contrast, tonnage from China to Europe is up 15% year-on-year, supported by stable rates and reallocated capacity.

Transatlantic lanes also reflect the summer dynamic. With increased belly-hold capacity from passenger flights, rates between Europe and North America dipped slightly in June. However, spot freight prices on both directions of the transatlantic remain higher than a year ago, suggesting underlying resilience.

Spot Market Dominance and Capacity Volatility
One of the most significant developments this quarter has been the dramatic shift toward the spot market on Asia Pacific–US lanes. By June, more than 70% of general cargo bookings on these routes were made on spot terms, up from around 50% in the same period last year. This trend reflects carrier uncertainty, volatile demand, and diverging expectations around tariff timing and impact.

For comparison, spot market activity on Asia-Europe lanes has remained relatively stable, with roughly 47% of cargo moving under short-term rates. The growing disparity between contract and spot pricing points to the challenges of forecasting capacity needs in politically sensitive markets.

Peak Season Prospects: Uncertainty Over Tradition
Traditionally, air freight demand accelerates from mid-August as retailers ramp up inventory for back-to-school, autumn sales, and the holiday period. However, the current market is anything but traditional. Consumer confidence remains fragile due to rising living costs and trade friction, with the largest shippers increasingly hesitant to commit to long-term air freight contracts.

Global air cargo volumes rose by just 1% year-on-year in June, with capacity growth outpacing demand for the first time in over 18 months. This imbalance is likely to pressure rates across many lanes, even as jet fuel prices spike and geopolitical risks persist.

While some Southeast Asia–US routes saw modest rate gains in June, buoyed by pre-tariff demand and capacity rebalancing, overall expectations for Q3 remain muted. Analysts warn that weaker consumer spending and ongoing tariff complications could limit any meaningful peak season surge, especially on transpacific routes.

Outlook 
Despite the structural pressures, there are opportunities for shippers in the current environment. Short-term rates are more flexible, capacity is more available than in past peak seasons, and carriers are actively repositioning services to match evolving demand patterns.

The real wildcard remains US trade policy. Without a new executive order, 9 July marks the start of a new tariff chapter that will ripple across global supply chains, just as the air freight industry typically gears up for its busiest season.

Now is the time to plan ahead.
With more flexible short-term rates, improved capacity availability, and carriers adapting to demand shifts, shippers have a unique window to secure cost-effective and reliable air freight solutions before peak season pressure builds.

EMAIL our managing director, Andrew Smith today to assess your options and take advantage of current market conditions.

ship aerial 1440x1080 1

Europe Builds Momentum as Trans-Pacific Slowdown Deepens

Jul 9, 2025 | , , , , , , , , , , , ,

Global container shipping is evolving rapidly, with Asia–Europe trade lanes showing fresh strength just as the transpacific market enters a significant slowdown. This divergence is creating new challenges and opportunities for shippers.

On the Asia–Europe route, demand has been steadily rising, with spot freight rates climbing significantly since the end of May. After a sluggish start to the year, the peak season seems to have arrived, driven by stronger consumer sentiment in Europe, improved macroeconomic indicators, and renewed retailer confidence in stock building.

Forecasts for European imports have been upgraded. Instead of the previously expected 3.5% annual growth, volumes are now set to increase by 6% through 2025. This is being supported by lower inflation, falling unemployment, rising disposable income, and stronger euro/sterling, which is making imports from Asia more affordable.

A new UK trade agreement is also giving exporters a boost by reducing U.S. tariffs on inbound goods to 10%. Discussions with the EU are ongoing, and similar tariff terms could apply more broadly to European supply chains, further stimulating demand.

In contrast, container traffic from Asia to North America is heading in the opposite direction. The sharp increase in demand earlier this year, driven by front-loading stock ahead of tariff deadlines, has left warehouses full and order volumes slowing. With inventory levels high and economic uncertainty persisting, import activity is falling, and rates have dropped since early June from Asia.

Adding to this pressure is the looming reintroduction of US tariffs. Temporary suspensions on general and China-specific tariffs are set to expire in July and August respectively. While extensions are possible, the expected imposition of new duties, potentially rising to 55% for some Chinese goods, may suppress demand further and shift sourcing decisions in the second half of the year.

Although a short-lived spike in cargo arrivals at US West Coast ports may materialise in July, driven by attempts to beat the tariff deadlines, this is expected to be a temporary reprieve in a broader downtrend.

Meanwhile, carriers on the Asia–Europe route are preparing to balance higher demand with tighter capacity. Shipping lines plan to withdraw approximately 90,000 TEU of scheduled space in August compared to July, using blank sailings and capacity cuts to maintain pricing discipline. If volumes remain strong, this could lead to a second wave of rate increases before the end of summer.

Beyond commercial dynamics, security remains a key concern in the Red Sea. A bulk carrier was attacked this week using drone boats, rocket-propelled grenades, and small arms, in the first such assault since December. Analysts warn that the threat level to commercial shipping has risen significantly, with continued disruption to Suez-linked services.

As trade routes shift, tariffs tighten, and risks increase, the ability to adapt quickly and make informed shipping decisions is more critical than ever.

Metro’s sea freight team provides expert guidance to help you navigate volatile conditions, mitigate disruption, and make your supply chain more resilient. Whether you’re importing from Asia or exporting to global markets, we’ll keep your cargo moving and your costs under control.  EMAIL our managing director Andrew Smith.

Category: Foodstuffs

4PL | Air | Automotive | Chemical | China | eCommerce | Economics | EU | Exports | Foodstuffs | Hazardous | Hong Kong | International Trade | News | Project | Publishing | Retail | Sea | Supply Chain | United States

Latest News in this category