2025 Q3 Global Freight Transportation and Logistics Trends

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August 2025 - Updated for Q3, our industry professionals compiled freight and logistics trends and market updates for 2025 to help your business stay prepared for the future.

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Global GDP forecasts have decreased from March projections, along with industrial production, while export projections have increased, and retail sales have contracted compared to March figures.

Key Macroeconomic Indicators Summary

Table showing the year over year growth as a percentage since 2022 and forecasting through 2025.

Key Macroeconomic Indicators Summary

Source: IHS-Markit: July 2025

Real GDP Quarterly Growth 2022-2025

Bar chart showing Real GDP quarterly growth as a percentage. Full year 2025 is expected to be on average 2.40%.

Real GDP Quarterly Growth 2022-2025

2025 Real GDP Forecast

Bar chart illustrating the quarterly Real GDP forecast comparison for March 2025 and July 2025 across global regions: US, EU, APAC, China and the World.

2025 Real GDP Forecast

Purchasing Managers' Index (PMI)

Purchasing Managers' Index line graph showing PMI results from US, Europe, China and Global perspectives.

Purchasing Managers' Index (PMI)

Sources: 1) WorldACD, 2) Accenture Cargo, 3) IATA, 4) EIA

Quarterly CPI Inflation Rate

Line graph showing the inflation rates from the US, Europe, China and Global perspectives quarterly from 2023 through 2025.

Quarterly CPI Inflation Rate

Sources: 1) WorldACD, 2) Accenture Cargo, 3) IATA, 4) EIA

Air Freight Industry Update

Global air cargo demand grew by +3% in the first half of 2025, with capacity keeping pace and will likely surpass demand in the coming months. Average spot rates were up +0.4% year over year during the same period.

Air Freight Demand vs. Capacity

Line graph showing the air freight demand and capacity from 2024 through June of 2025.

Air Freight Demand vs. Capacity

Sources: 1) Xeneta, 2) Accenture Cargo

* IATA Demand (WorldACD June)

** Accenture Demand does not capture low-value de Minimis eCommerce Demand

Air Freight Industry Rates

Bar chart showing the air freight market rates as a year over year percentage change by month since January 2024 through June 2025.

Air Freight Industry Rates

Source: WorldACD

Global demand growth has shown resilience despite continued geopolitical tension and global trade negotiations, but further volatility is likely in the coming months as deadlines approach on yet to be finalized deals.

Demand Growth
  • Global Air Cargo demand has grown +3% YoY through the 1H 2025, but showed signs of slowing in June growing just +1%.1
  • The outlook for the second half remains slightly less optimistic as tariff deadlines approach and continued limits on de minimis exemptions from Hong Kong and China.1
  • APAC demand continues to lead all regions growing +8.3% YTD (May) followed by LATAM and North America at +7.2% and +4.8% respectively.2
  • APAC-ISMEA has outpaced all regional lanes +19% YTD (May) with LATAM-EU (+13%) APAC-EU (+12%) EU-NA (+11%) and APAC-NA (+8%) all showing strong 1H growth.3

Implications: Demand growth will likely be slightly more muted in the second half of 2025 as the impacts of global trade uncertainty begin to catch up with the market.

Sources: 1) Xenata, 2) IATA, 3) Accenture Cargo

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Capacity and Rate Impacts
  • Capacity growth has kept pace with demand through the first half of the year, up +3.8% YTD with APAC-ISMEA (+17%), EU-APAC (+17%), ISMEA-EU (+12%) and EU-APAC (+8%) making up most of the international capacity growth.3
  • Widebody belly capacity has outpaced Freighter capacity growth, +4.2% vs. +3.5% YTD, with Belly capacity expected to significantly outpace freighter growth for the remainder of 2025.3
  • Average rates are relatively flat compared to the 1H of 2024, growing +0.5%.4
  • Spot rates have declined YoY for two consecutive months (May-June) as capacity overtook demand for the first time in over a year and a half.1

Implications: Rates may continue flat or decline as demand volatility is likely in the second half with capacity growth expected to continue.

Sources: 1) Xenata, 3) Accenture Cargo, 4) WorldACD

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Macro Trends and Global Disruptors
  • Tariff uncertainty continues to impact the market, but more deals seem to be solidifying with Japan confirming an agreement has been reached and progress reported on negotiations with the EU.6,7
  • Global GDP growth has been revised down with decreased expectations for the US, while EU/APAC remained flat and forecasts for China have improved.5
  • Global Manufacturing PMI bounced back above the neutral 50.0 in June, with the US (52.9) and Eurozone (49.5) manufacturing PMI reaching their highest level in years.5

Implications: Tariff impacts will continue to create volatility as negotiations with most US trade partners are still in process. Some positive numbers from recent PMI reporting and inflation projections point toward optimism for a more settled market over the third and fourth quarters of 2025.

Sources: 5) IHS Markit, 6) The Loadstar, 7) Bloomberg

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Tariff unpredictability remains the key disruptor impacting business decision making.

Logistics Insights
  • Institute for Supply Management (ISM) reported that the Transportation Equipment manufacturing sector is showing softening sales and consumer demand for the remainder of 2025 due to erratic US trade policy.1
  • TD Cowen/AFS Freight Index forecasts that their LTL rate index will increase for another quarter, as pricing discipline by carriers remains firm.2

Implications: Manufacturers are feeling the effects of weak consumer demand, forcing LTL carriers to focus heavily on their rate and cost strategy in the marketplace.

Sources: 1) ismworld, 2) yahoofinance

Industry Trends
  • A new paradigm of endless disruptions—geopolitical, trade policies, and weather—across supply chains is influencing logistical activity by shippers and carriers.3
  • Agility is becoming a permanent shift in how SMBs approach their supply chains, with flexibility and quick decision-making emerging as key components of a resilient business strategy.4
  • A bevy of M&A activity has hit the pharmaceutical logistics industry, as businesses seek to create integrated, end-to-end custom solutions and scale their reach.5

Implications: Businesses and carriers are collaborating to deliver resilient supply chain solutions in the new normal of complex disruptions.

Sources: 3) freightwaves, 4) Freightos, 5) stattimes

Economic Viewpoints
  • The US Bureau of Labor Consumer Price Index (CPI) reported the tariff impacts of duty-affected commodities, with inflation rising to 2.7% in June, up from 2.4% the prior month.6
  • The Port of Los Angeles saw cargo volumes rise following a decline in May, yet the impact of new US administration tariffs and resulting uncertainties continues to negatively affect importers and retailers—and could adversely impact Christmas season sales.7

Implications: Tariffs are here to stay, and freight forwarders can help shippers manage them by staying abreast of regulatory changes, developing efficient routes, and supporting effective strategic planning.

Sources: 6) ismworld, 7) ajot

Ocean Freight Industry Update

Rate levels are expected to decline further in the second half of 2025 as the underlying overcapacity in the market mitigates the impact of disruptions.

Demand vs. Capacity

Line graph showing the ocean freight market demand vs. capacity for the TransPacific and East-West trade lanes from 2019 through 2025.

Demand vs. Capacity

Sources: 1) Drewry Container Forecaster, 2) National Retail Federation

Rates

Line graph showing the ocean freight rates for China-US East Coast, China-US West Coast, and China-European Union from August 2024 to July 2025.

Rates

Sources: 1) Drewry Container Forecaster

Ocean Freight Industry Drivers

The on-again, off-again tariffs from the US administration, along with persistent congestion in Asia and Europe, are complicating the global supply and demand balance.

Rampant Congestion Throughout North Europe
  • Severe congestion at North European ports (Antwerp, Hamburg, Rotterdam, Bremerhaven) is causing berthing delays, high yard utilization (>92%), and growing transit times.1
  • Inland operations are heavily strained, with carriers reporting long delays for truck and barge transport; some terminals have paused empty container redelivery.1
  • Irregular vessel arrivals—exacerbated by routings around the Cape of Good Hope, reshuffled alliance networks, labor unrest, and strong demand in the Asia–Europe trade—are adding to the pressure.2

Implications: Carriers are adding record capacity on Asia–Europe routes to meet demand. But blank sailings and skipped ports may cause service disruptions. Shippers should book early to secure space.1

Sources: 1) JOC, 2) JOC

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Tariffs Driving Volatile Trans-Pacific Capacity Management
  • After a tariff-driven slowdown in shipments from China to the US in April, capacity was pushed into the trade starting in May in anticipation of a demand surge.3
  • Now, carriers are pulling back on capacity deployment as demand has faltered and rate levels are declining.3
  • Starting in August, capacity from Asia will drop 6.2% to the US West Coast and 1.7% to the East Coast. Carriers are cutting space through blank sailings, smaller ships and service suspensions.3

Implications: Tariff uncertainty is making it harder to balance supply and demand. With limited vessel flexibility, shippers may face delays and service disruptions.

Source: 3) JOC

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USTR Port Fees for Chinese Carriers and China-built Vessels
  • Starting October 2025, USTR fees could add about $180 per FEU for non-Chinese carriers and $511 per FEU for Chinese carriers, according to Drewry.4
  • To avoid passing these additional fees on to shippers—and risking a loss of competitiveness—it is likely that carriers will remove China-built vessels from US trades wherever possible.4
  • Drewry estimates about 75 China-built vessels may be replaced with South Korean or Japanese ships. This could cause temporary gaps, schedule changes or port rotation shifts.4

​Implications: A major fleet reshuffle could cut capacity, disrupt schedules and affect service reliability, creating market shifts and possible rate volatility.

Source: 4) Drewry Container Forecaster

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Evolving Trade Policies and Tariff Updates: Impacts on International Trade

Increased Global Trade Uncertainty amid Continued Tariff Shifts​
  • Aluminum Derivatives (June 28): Imports missing smelt and cast country-of-origin info must be labeled “UN” and will automatically incur a 200% Section 232 duty. If not on the invoice, “UN” is applied by default.1
  • FDA-Regulated Products (July 9): All imports under FDA oversight regardless of value, must be submitted for review prior to entry.3
  • Tariff Expansion (Aug 1): Up to 40% duties may apply to imports from 20+ countries unless trade deals are updated.2

Implications: Importers are seeing significant cost increases and compliance burdens. Importers should prepare for stricter paperwork for aluminum and FDA imports.

Sources: 1) CSMS #65340246, 2) The White House, 3) strtrade

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Canada: Steel Imports Regulations Adjustments and Customs Priorities
  • Steel TRQs (Effective June 27): Temporary quotas apply to five steel categories from non-FTA countries. Imports within limits need shipment-specific permits; excess imports face a 50% surtax plus existing duties.4
  • Starting August 1, 2025, TRQs will be extended to FTA countries (except the U.S. and Mexico) and reduced for non-FTA steel imports.5
  • A new Order (SOR/2025-147) expands the scope of products eligible for remission of duties paid or payable under the China and US surtax orders.6
  • CBSA Compliance Focus (July 2025): Semi-annual verifications will now include imports subject to China and U.S. surtaxes.7

Implications: Canada is adjusting its regulations and tightening oversight. Importers of steel products under China and US surtax orders should prepare for increased CBSA scrutiny.

Sources: 4) canada.ca,  5) canada.ca,  6) gazette.gc.ca,  7) cbsa-asfc.gc.ca

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AI and Automation in Action: Meeting CBP Demands and Global Trade Enforcement
  • UFLPA Expansion: The Entity List now includes 68 entities, increasing forced labor scrutiny. Importers must prove compliance, especially in textiles, electronics, and aluminum, as the EU and Canada pursue similar laws.9
  • IPR Enforcement (July 2025): CBP is ramping up efforts, seizing 32M+ counterfeit goods in FY2024 and modernizing enforcement with automation and better digital tools for rights holders.
  • AI Integration: CBP is using AI-driven analytics to boost security, adding UFLPA-specific upgrades to systems like ACE and the Advanced Trade Analytics Platform to spot evasion patterns.8,10

Implications: Global enforcement on forced labor and IP is tightening. Importers are turning to AI for supply chain mapping, traceability, and automated risk detection.

Sources: 8) CBP.gov,  9) CBP.gov,  10) CBP.gov

Global Logistics & Distribution Highlight

Policy uncertainty and warehouse automation are reshaping the logistics industry

Contract Logistics Market Growth

Bar chart that shows the growth of the contract logistics market since 2022 and forecasted through 2028. There is a forecasted 4.1% increase in CAGR between 2024 and 2028.

Contract logistics market continues to outpace projected global GDP (2025-2026 YoY 3.3%).²

Tariff & Policy Change Pressure

Warehouse employees walking through aisle

Tariff & Policy Change Pressure

Implications: Contract logistics providers are seeing rising demand from global importers for customs-compliant warehousing, such as bonded warehouse and foreign trade zones, and value-added services.

Source: 1) US National Industrial Report

Implications: Contract logistics providers face rising fixed costs, but investor activity signals a reshaping of warehouse portfolios, especially in inland hubs. This may lead to increased competitive pressure or the consolidation of underperforming facilities.

Sources: 2) Cushman & Wakefield Q2 2025 Report, 3) Partners Real Estate, 4) Business Insider,  5) Industrial & Logistics | CBRE

Technology & Automation Investment

top view of container ship terminal

Implications: Leading contract logistics providers are acquiring or merging with automation and AI providers to integrate tech, reduce labor dependence, and secure competitive advantage as margins tighten.

Sources: 6) How AI is Changing Logistics & Supply Chain, 7) Warehouse Automation Market, 8) Geekplus Lists on HKEX

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This document is for informational purposes only. It does not constitute legal advice. Information herein was obtained from government, industry, and other public sources. It has not been independently verified by UPS and is subject to change. Recipient has sole responsibility for determining the usability of any information provided herein. Before recipient acts on the information, recipient should seek professional advice regarding its applicability to the recipient's specific circumstances.

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