Sea Freight Market Review

Sea Freight Market Review

Mar 18, 2025 | , , , , , , , , , , , , , , , , , , ,

The global ocean freight market is undergoing a period of transition in 2025, influenced by regulatory changes, shifting trade patterns, and evolving carrier alliances. While demand remains strong in key regions, rate volatility persists due to supply chain disruptions and excess capacity.

The ocean freight sector is experiencing considerable adjustments as carriers adapt to regulatory and economic shifts. The EU ETS expansion now covers 70% of maritime emissions, leading to higher surcharges and operational costs for carriers.

Supply/Demand
Capacity growth is projected to slow to 5% in 2025 after record vessel deliveries in 2024. However, supply chain disruptions persist due to global port congestion and ongoing Red Sea diversions are soaking up excess capacity.

The restructuring of major shipping alliances is further shaping the industry landscape, with the dissolution of 2M, the formation of the Premier Alliance by THE Alliance, and the launch of Gemini Cooperation in February 2025.

Proforma scheduled liner capacity on the Asia-North Europe trade is set to be reduced by around 11% once the transition to the new shipping alliance set-up is complete. The combined weekly capacity drop of some 28,000 TEU equates to a total reduction of 221,000 TEU across all services. However, the number of individual weekly sailings between Asia and North Europe is expected to increase from 26 (under the previous alliances and standalone services) to 28, potentially improving frequency and flexibility for shippers.

Global port congestion remains a pressing issue, particularly in China and vessel utilisation remains high, with only 0.2% of the global liner fleet currently idle. The industry is also witnessing an increase in blank sailings, with 47 announced through mid-April, affecting Transpacific and Asia-Europe trade routes. The Transpacific market, in particular, is experiencing notable disruptions, with 43% of blank sailings concentrated in this corridor.

Expectations that Red Sea diversions would ease, returning an estimated 2 million TEU to global circulation, were dampened over the weekend following missile exchanges between the US and Yemen’s Houthi rebels. MSC CEO Soren Toft stated, “Suez simply isn’t safe to transit at the moment, and there’s no immediate prospect of a return.” This continued instability may prolong disruptions and return pressure on rates.

Market
Meanwhile, the Shanghai Containerised Freight Index (SCFI) has dropped 17% since January and despite strong cargo demand in select regions, the market remains vulnerable to downward pricing pressures.

Demand remains resilient but uneven, with North America and India seeing stronger performance, whereas Europe’s slower economic growth is weighing on export activity. Chinese exports have exceeded expectations, driven in part by early shipments ahead of potential tariff adjustments.

The Drewry World Container Index (WCI) has reached its lowest level since January 2024 and while rates are below their pandemic-era peaks they are still 79% higher than pre-pandemic averages from 2019.

At Metro, our fixed-rate agreements on popular shipping routes provide a practical safeguard against rate volatility, offering predictable costs for effective budgeting. Whether you’re managing high-volume trade lanes or seeking greater stability for your supply chain, our tailored solutions can help you thrive in 2025.

To discover how Metro can strengthen your business and provide peace of mind, EMAIL our Managing Director, Andy Smith, today.

Air Freight Market Review

Air Freight Market Review

Mar 18, 2025 | , , , , , , , , , , , , , , , , ,

The global air freight market in February and early March reflected moderate year-on-year (YoY) growth, with total worldwide tonnages up 5% in February and 2% higher YoY in early March.

However, market dynamics remain volatile, influenced by shifting trade policies, geopolitical factors, and eCommerce trends.

Asia-Europe air cargo showed strong demand recovery in March, with tonnages rising 4% week-on-week (WoW) and while average spot rates softened they remain 20% higher YoY. Meanwhile, transatlantic routes saw weaker demand from Europe, with London Heathrow and Frankfurt spot rates declining amid softer outbound trade.

Market Situation
Global air cargo tonnages rose 5% YoY in February, supported by an 8% surge from Asia Pacific and a 4% rise in North America and Europe. However, Middle East & South Asia (MESA) volumes declined by 6%, reflecting last year’s Red Sea-driven demand spike.

By early March (Week 10), Asia-Europe trade saw significant WoW volume gains:

  • China to Europe tonnages increased by 5%
  • Hong Kong to Europe volumes grew by 6%
  • Japan & Taiwan to Europe rose by 7%
  • Thailand & Singapore to Europe surged by 9%

Despite these volume increases, average spot price indices on Asia-Europe lanes declined by 3%. However, YoY spot rates remain significantly higher (+20%), supported by China (+14%), Hong Kong (+22%), Japan (+19%), and Thailand (+38%).

Global air cargo markets remained relatively stable through February and early March, with weekly demand fluctuations balancing out across key regions.

  • Asia-Europe: Despite a 4% WoW tonnage rebound in Week 10, rates dipped as supply-demand balances shifted.
  • Transatlantic (Europe to USA): Weaker outbound demand put spot rates under pressure at London Heathrow and Frankfurt.
  • Middle East to Europe: Demand weakened with Dubai-to-Europe tonnages falling 15% WoW.

Global air freight rates remained 6% higher YoY, though Asia-Europe pricing showed a mixed trend, with falls on all the major trade lanes, though rates remain significantly higher than last year.

  • Asia-Europe remains 20% higher YoY.
  • China to Europe still stands 14% higher YoY.
  • Hong Kong to Europe are up 22% YoY.

The Asia-Europe air cargo market rebounded in early March, with tonnage gains but slightly softer rates as market conditions adjusted. Meanwhile, transatlantic routes saw demand weakness, leading to rate declines from major European hubs. Moving forward, trade policies, geopolitical shifts, and capacity adjustments will continue to influence global air cargo pricing and volumes.

In a volatile air cargo market, securing capacity and competitive rates is critical. Metro’s air freight, charter, and sea/air solutions ensure your shipments move efficiently, even on the busiest trade lanes. With block space agreements (BSA) and capacity purchase agreements (CPA) in place, we guarantee space and stable pricing when you need it most.

Whether you’re shipping urgent, high-value, or sensitive cargo, our global expertise and strategic carrier partnerships keep your supply chain running on time and within budget.

EMAIL Elliot Carlile, Operations Director, today to explore how Metro’s air freight solutions can optimise your logistics.

Seven supply chain shocks in seven weeks

Seven supply chain shocks in seven weeks

Feb 19, 2025 | , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Just seven weeks into 2025, global supply chains have already faced a whirlwind of challenges.

From industrial action to trade barriers and shifting alliances, businesses must stay agile to navigate ongoing disruptions. Here are seven of the most impactful developments so far this year.

1. US east coast port strike averted (8th January)
A major disruption was narrowly avoided as the International Longshoremen’s Association (ILA) and United States Maritime Alliance (USMX) reached a tentative six-year agreement. The deal, approved on 7 February, prevented a strike that could have crippled US east coast ports for months. A final vote on 25 February will confirm its ratification.

2. Uncertainty over Suez Canal return (19th January)
Despite a fragile ceasefire in Gaza, container ships will not be returning to the Red Sea anytime soon. Carriers remain cautious, fearing renewed instability and prioritising the established Cape of Good Hope diversions. Even if ships do resume transit, severe disruption is expected, with schedules taking up to two months to stabilise.

3. Trump’s trade policies spark concerns (20th January)
Following his inauguration, President Trump swiftly reignited trade tensions, threatening tariffs on Colombia, China, Canada, and Mexico. Proposals include a 25% levy on steel and aluminium from Canada and Mexico, with reciprocal tariffs also being considered for UK imports. The potential trade war could have widespread consequences for global supply chains.

4. US air cargo demand under threat (1st February)
Trump’s decision to impose a 10% tariff on all Chinese imports and temporarily suspend the de minimis exemption for low-value Chinese shipments has sent shockwaves through the air freight sector. While the exemption was reinstated, changes to eCommerce regulations could significantly disrupt air cargo flows into the US, which is expected to receive 1.4 billion eCommerce packages this year.

5. New Asia shipping alliances reshape trade (2nd February)
The long-anticipated shift from three major container alliances (Ocean, THEA, 2M) to four key players (Ocean, Premier, Gemini, MSC) is now in effect. Asia-North Europe scheduled liner capacity will shrink by 11%, yet the number of weekly sailings will increase from 26 to 28. These changes will reshape global shipping networks for years to come.

6. European road freight rates stabilising (4th February)
After three years of decline, European road freight spot rates may have hit their lowest point. According to the European Road Freight Rate Benchmark, spot rates fell just 1% year-on-year in Q4 2024. While demand remains weak, cost pressures have kept rates 15% above pre-pandemic levels, with short-term volatility expected.

7. Carriers cut sailings to stabilise rates (14th February)
Shipping lines are aggressively blanking sailings to ease the transition to new alliance schedules and sustain freight rates. Between 17 February and 23 March, 51 sailings have been cancelled across key east-west trade routes, with February’s cancellations rising to 133 from 104 in January. Further capacity withdrawals and a general rate increase (GRI) could follow if demand fails to recover.

With trade disputes, shipping realignments, and geopolitical instability shaping global supply chains, the first quarter of 2025 has already presented significant challenges.

Staying ahead requires proactive strategy adjustments to mitigate risks and build resilience. That’s why we share these insights and why your Metro account management team is always by your side, ready to provide expert advice, share knowledge, and develop bespoke solutions tailored to your supply chain needs.

For high-level support, EMAIL Andrew Smith, Managing Director.

Container shipping braces for volatility as Red Sea routes beckon

Container shipping braces for volatility as Red Sea routes beckon

Jan 23, 2025 | , , , , , , , , , , , , , , , , ,

For over a year attacks on merchant vessels by Houthi militants has forced container carriers to reroute around the Cape of Good Hope. However, a newly established ceasefire and assurances from Houthi forces to limit attacks on non-Israeli vessels signal the possibility of a return to the Suez Canal route.

The ceasefire in Gaza and Houthi pledges to cease attacks on most vessels offer cautious optimism for carriers, who have stated that they will only return to Red Sea transits “when it is safe to do so”.

The assurance that ships will not be targeted, alongside a reduction in hostility towards vessels calling at Israeli ports, should pave the way for safer Red Sea transits.

However, the situation remains fragile. The Houthis have reserved the right to resume attacks should aggression occur in Yemen, and their targeting of Israeli-flagged or wholly Israeli-owned vessels persists. Furthermore, full implementation of the ceasefire agreement’s later stages is crucial for long-term stability.

Capacity oversupply threatens
While the reopening of the Red Sea route presents an opportunity to streamline shipping operations, it also introduces significant challenges.

Currently, close to 100% of container vessels avoid the Suez Canal, diverting around Africa and effectively removing over 12% of fleet capacity. This artificial tightening of capacity has driven freight rates to significantly higher levels in 2024, with spot rates more than tripling on some trades.

The return to shorter voyages through the Suez Canal will flood the market with capacity, dramatically altering the supply-demand balance. Analysts predict carriers will struggle to absorb the 1.8m TEU excess, with scrapping and slow steaming unlikely to offset the impact.

Operational challenges
Resuming Red Sea transits will also bring logistical hurdles. Carriers face the complex task of realigning schedules disrupted by the year-long diversions. Ships arriving earlier or later than expected at ports could lead to congestion and delays, adding to the strain on global supply chains.

Port congestion, particularly in Europe, is a key concern. A surge in vessel arrivals could overwhelm infrastructure, causing temporary backlogs that disrupt the smooth flow of goods. The shipping industry must also contend with record deliveries of new vessels, further compounding capacity issues.

While the reopening of the Red Sea route offers opportunities to reduce transit times and operational costs, the transition is unlikely to be smooth. The combination of excess capacity, volatile freight rates, and logistical challenges will create uncertainty in the short term.

With geopolitical risks casting uncertainty over the industry, building resilient supply chains, securing comprehensive cargo insurance, and managing budgets effectively will be essential for navigating the 2025 sea freight landscape.

In this volatile market, our marine insurance cover and fixed-rate agreements on key shipping routes help minimise risk and provide budgetary stability.

To discover how Metro’s insurance solutions and fixed-rate options can support your business in 2025, please EMAIL Managing Director Andy Smith.

Category: Middle East

4PL | Air | International Trade | Middle East | News | Retail | Sea | Sea/Air | Supply Chain

Latest News in this category