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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.

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Key Takeaways from TPM25

Mar 17, 2025 | , , , , , , , , , , , , ,

The 25th anniversary of the Trans-Pacific Maritime (TPM) Conference in Long Beach, California, reaffirmed its position as the premier global forum for senior supply chain executives carriers, and technology providers shaping the future of global trade.

This year’s event unfolded against a backdrop of intensifying geopolitical tensions, with supply chain resilience and service reliability emerging as dominant themes.

As hostilities between U.S. forces and Houthi rebels in Yemen resumed over the weekend, it is evident that safe passage through the Red Sea and the Suez Canal will remain compromised for the foreseeable future.

With security risks heightened, carriers are expected to continue rerouting vessels around the Cape of Good Hope, adding transit times, costs, and complexity to global trade.

Engaging with Industry Leaders
Metro’s Managing Director, Andrew Smith, and Head of Ocean Pricing, Chris Jones, played an active role in TPM25, engaging in key discussions on market volatility, geopolitical risks, and the evolving carrier landscape.

During in-depth conversations with carriers and customers, Metro explored strategies to mitigate ongoing disruptions in the Red Sea, as well as how emerging shipping alliances are reshaping service offerings. Understanding carrier market pressures and operational adjustments remains a priority for Metro, ensuring that we continue to deliver the most resilient and efficient logistics solutions for our clients.

Beyond TPM
Following the conference’s close, Andrew and Chris extended their commitment to direct client engagement with visits to Minneapolis and Chicago. Their series of meetings provided an invaluable opportunity to gain firsthand insights into the challenges facing shippers, including changing regulations, shifting trade dynamics, and the ongoing impact of global events.

By working closely with customers on tailored supply chain strategies, Metro continues to bridge the gap between industry-wide challenges and customer-specific solutions, reinforcing our role as a trusted partner in an unpredictable market.

A recurring theme throughout TPM25 was the industry’s relentless pursuit of stability amidst growing uncertainty. Discussions highlighted the urgent need for agile, data-driven solutions, with many industry leaders acknowledging that technology, real-time intelligence, and predictive analytics will be key differentiators in navigating the complexities of modern supply chains.

Metro remains at the forefront of this transformation, actively integrating AI-driven analytics, digital platform enhancements, and predictive modelling to help customers make informed, real-time decisions.

This commitment is clearly demonstrated this week, with Metro integrating CO2 emissions data directly into freight invoices, together with the launch of new tools that give customers greater financial control, reduced administrative burdens and enhanced efficiency.

As we reflect on the insights gained at TPM25 and our follow-up discussions with customers, Metro reaffirms its commitment to staying ahead of global trade challenges, ensuring that our partners remain competitive, informed, and prepared in a rapidly evolving landscape.

To discover how Metro can support your Transpacific or Transatlantic trade needs, or to discuss any of the issues highlighted here, please reach out to Andrew Smith via EMAIL

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Ocean freight market report

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

Global shipping dynamics are shifting, with rates under pressure, 5% growth in global container shipping capacity, and the impact of the US’ new trade policies.

The ocean freight market is navigating a complex landscape, marked by operational and regulatory shifts. The Shanghai Containerised Freight Index (SCFI) has dropped since the start of the year, primarily due to the resolution of the US East Coast port strike. However, freight rates remain volatile, driven by service disruptions, alliance reshuffling, and geopolitical tensions in the Red Sea. Market capacity is also under pressure, with 30% of Far East westbound sailings expected to be blanked.

Capacity

Liner capacity growth has slowed following a record increase in 2024 and is now forecasted at 5% for 2025.

  • Global port congestion hit a three-month high (10.3%), particularly at Chinese ports before Lunar New Year.
  • The liner sector remains fully utilised, with only 0.2% of vessels (30 ships) idle.
  • 16,000 TEU vessels are becoming the new standard as carriers shift away from ultra-large container ships (ULCS).

From February to April 2025, the ocean freight market is expected to be volatile, driven by the post-Lunar New Year slowdown and carrier alliance reshuffles:

  • February: Capacity shortages are anticipated on Asia–North America and Asia–Europe lanes, with Transatlantic routes also under pressure, potentially increasing freight rates.
  • March: Market balance may improve as new alliance networks stabilise, though capacity constraints could persist from Asia.
  • April: Conditions should stabilise.

Rates & Schedule Reliability

  • Freight rates are in decline across all trades, with:
    • SCFI falling 17% since the beginning of 2025.
    • WCI down 12%.
    • Drewry World Container Index 118% higher than pre-pandemic.
  • Despite strong demand leading up to Chinese New Year, rates have continued to fall due to service disruptions and alliance changes.
  • Global schedule reliability has remained between 50%-55%, but port congestion has reached a three-month high.
  • 10.5% of the global fleet (3.3 million TEU) is currently stuck in port congestion.

Demand Outlook

Demand trends remain mixed, with a rush in US-bound cargo ahead of potential tariff hikes, while the traditional seasonal slowdown is following Lunar New Year.

  • December PMI data shows continued global growth disparities:
    • The US is outperforming other developed economies.
    • India leads emerging markets.
    • Global business confidence has declined.

Looking ahead the Far East is projected to remain a critical driver of global container trade, contributing significantly to the 3.3% CAGR expected from 2026 to 2028. The region’s demand is forecasted to grow by 2.9%, underpinned by robust intra-Asia trade and strong export performance, particularly to North America and Europe. 

Despite ongoing trade challenges, including regulatory and tariff impacts, the Far East’s economic resilience, led by China and India, is expected to support continued growth in freight volumes.

On the Transatlantic, demand is projected to remain stable, with North America expected to see a 2.5% increase in trade volumes. However, carriers are reducing capacity on this route, potentially impacting freight rates and capacity availability. The shift towards smaller vessels and the restructuring of carrier alliances may lead to temporary disruptions, but the market is likely to stabilise as the new network configurations take effect.

Market Developments

The US continues to lead developed markets, while China’s exports have exceeded expectations despite export tax rebate cuts. However, market outlook was already cautious, with business confidence waning amid concerns over economic growth, particularly in Europe and the UK. And now the de-stabilising impact of President Trump’s aggressive trade policies need to be factored in.

  • Market imbalances persist across key trade routes:
    • Asia outbound capacity is strained, creating pressure on freight rates.
    • The Transatlantic trade lane has seen capacity reductions, with carriers downsizing vessels.
    • The upcoming alliance reshuffle is expected to disrupt operations, leading to short-term demand surges until new networks stabilise.
    • Demand exceeds capacity on multiple routes, particularly:
      • Asia–North America
      • Asia–Europe
      • Asia–Middle East
    • Some regional markets are more balanced, but capacity pressures remain high.

Conclusion

The ocean freight market continues to challenge, with rate volatility, capacity constraints, and shifting trade policies. While global liner capacity is set to grow by 5% in 2025, port congestion and alliance reshuffles are contributing to market instability, particularly on Asia–North America and Asia–Europe routes.

Despite the post-Lunar New Year slowdown and the impact of new US trade policies, demand from the Far East remains a key growth driver, underpinned by strong intra-Asia trade and export flows to North America and Europe. 

As geopolitical risks and market disruptions continue to impact global shipping, building resilient supply chains and ensuring budgetary certainty, to mitigate risks and maintain stability, are more crucial than ever.

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.

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Trump’s new tariffs could shake the UK and EU automotive sector

Feb 19, 2025 | , , , , , ,

New US tariffs on steel, aluminium, and auto parts threaten production costs, trade relationships and market stability, and for UK and EU carmakers, the implications of these policies could be severe, impacting everything from manufacturing costs to supply chain efficiency and trade competitiveness.

During a press conference on the 18th February, President Trump confirmed that auto tariffs would be set “in the neighbourhood of 25%.” Trump suggested that more clarity on the details would emerge by the 2nd April, coinciding with the conclusion of an investigation into international tariff policies. The move signals potential reciprocal tariffs against nations deemed to impose excessive duties on US imports.

The US president has already announced a 25% tariff on steel and aluminium imports from Canada and Mexico, reversing previous trade agreements and significantly increasing costs for North American carmakers. This move comes alongside a threat to impose similar 25% tariffs on auto parts, a policy that could upend the region’s deeply integrated supply chain.

The US-Mexico-Canada Agreement (USMCA) was designed to protect North American vehicle production, stipulating that 75% of a vehicle’s content must be produced within the region to qualify for duty-free trade. However, the proposed tariffs would undermine these rules, forcing manufacturers to absorb the costs or seek alternative sourcing strategies.

The risk to UK and EU carmakers

Trump’s administration has also pledged to introduce reciprocal trade measures, targeting countries with higher tariffs on US exports. The EU currently imposes a 10% tariff on imported vehicles, while the US applies only 2.5% on passenger cars. The White House sees this as an unfair imbalance and is now considering higher duties on EU automotive imports, further straining transatlantic trade.

The UK and EU have long relied on access to the North American market, with car exports forming a major part of trade with the US. If tariffs are introduced, UK and EU carmakers will face higher costs to sell vehicles in the US, making them less competitive.

An example of the potential impact is a leading German high-performance car manufacturer, which has seen the US overtake China as its largest market. The brand relies heavily on imports to supply its American dealerships and is particularly vulnerable as it has no quick fix to localise production.

Analysts suggest that if tariffs exceed 10%, it may have to consider shifting some SUV production to the US, but logistical and supplier challenges present significant hurdles.

The financial impact could be severe. Industry estimates suggest that a tariff increase to 10% could eliminate billions from German automakers’ earnings before interest and taxes. While high-margin luxury models could potentially pass costs onto consumers, more competitively priced models may struggle to remain viable in the US market.

New era of trade uncertainty

The North American automotive market is one of the most interconnected in the world, with carmakers and suppliers depending on seamless cross-border trade. The new tariffs could lead to supply shortages, higher production costs, and retaliatory trade measures from Canada and Mexico.

Retaliation is already on the horizon, with Canada, Mexico, and the EU preparing countermeasures. The European Commission has pledged to respond “firmly and immediately” if additional tariffs are imposed, warning that the US is undermining decades of global trade cooperation.

As global trade policies shift and new tariffs reshape supply chains, proactive planning is more critical than ever. At Metro, we leverage award-winning services and deep industry expertise to help automotive brands, manufacturers and OEM’s navigate evolving trade barriers, regulatory changes, and supply chain disruptions.

Whether you need to mitigate the impact of tariffs, ensure compliance with new regulations, or adapt sourcing/export strategies, our tailored solutions keep your supply chain resilient and competitive.

EMAIL Andy Smith, Managing Director, today to explore how Metro can safeguard your supply chain and support your business in 2025 and beyond.

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