Freight and Logistics News and Market Update

Air

• Geopolitical and regulatory developments continue to disrupt global supply chains. Recent military activity involving Israel, Iran and the United States has led to regional airspace restrictions, prompting some airlines to suspend certain routes. There are also growing concerns that Iran may close the Strait of Hormuz, a key chokepoint for global oil and cargo shipments, which could significantly disrupt ocean freight operations.
• Global air cargo spot rates declined approximately 4% year-over-year in May 2025, marking the first annual decrease since April 2024, despite a 6% increase in demand. While demand continues to grow faster than available capacity, uncertainty stemming from geopolitical tensions, regulatory instability and broader market sentiment is putting downward pressure on rates.
• In 2025, exports from India to the US have seen notable growth, especially in the smartphone sector. India has surpassed China to become the largest exporter of smartphones to the US, a shift that began gaining momentum in late 2024. US tariffs on Chinese imports have contributed to the change, pushing volumes toward India and other markets. However, exemptions on some electronics, including smartphones, could lead to some of that volume returning to China and Hong Kong.

Ocean

• Global vessel schedule reliability remains low due to congestion at major transshipment ports and reduced sailing speeds driven by stricter International Maritime Organization (IMO) carbon regulations. At the Agriculture Transportation Coalition (AgTC) conference, experts advised cargo owners to prepare for continued delays as carriers have less flexibility to make up lost time. While alliances like Gemini report strong performance on select routes, widespread challenges persist across the broader network, particularly on feeder services and at heavily congested hubs like Singapore and Tanger Med.
• Container carriers operating on the India to US East Coast trade lane are entering peak season with confidence, highlighted by aggressive rate hikes such as the $4,000 peak season surcharge (PSS) announced by Maersk, effective July 16. Contributing factors include tight vessel space, a rise in container rollovers and reduced capacity caused by blank (void) sailings. These conditions are supporting the push for higher rates. However, inconsistent pricing from some Asian carriers and additional capacity introduced by CMA CGM may limit a full rate recovery.
• Imports at the ports of Los Angeles and Long Beach fell 24% in May, marking the lowest volume since July 2023, due to steep tariff hikes on Chinese goods. A temporary 90-day tariff reduction from 145% to 30% is expected to boost import volumes in June and July. However, without a long-term trade agreement, the National Retail Federation (NRF) warns that imports could sharply decline starting in August.

Air

• Air cargo volumes from China and Hong Kong to the United States fell 10% week over week (WoW) and 19% year over year (YoY) in the first full week of June, following a brief rebound in May driven by a pause in US import tariffs. Spot rates on the trade lane also declined 5% WoW and 17% YoY. The drop contributed to a 3% global decrease in weekly tonnage, with wider declines across the Asia Pacific region influenced by Eid holidays in Southeast Asia and Memorial Day in South Korea.
• Malaysia has launched the Selangor Aero Park (SAP) at Kuala Lumpur International Airport (KLIA) Aeropolis to strengthen its position as the top air cargo hub in the Association of Southeast Asian Nations (ASEAN). The 600-acre industrial park is expected to generate RM55.2 billion in annual aerospace revenue and create over 32,000 high-income jobs by 2030. SAP will focus on attracting aerospace manufacturing companies and those involved in maintenance, repair and overhaul (MRO). GE Aerospace has already been confirmed as the anchor tenant.Transport Minister Anthony Loke said Malaysia’s competitive edge in regional aviation and logistics comes from KLIA’s size and connectivity and strategic partnerships with countries like China.
• In May 2025, Hong Kong International Airport (HKIA) handled 422,000 tonnes of cargo, a 1.4% increase YoY. The growth was mainly driven by a 12.7% rise in transshipments, with notable gains on routes connecting to Europe and the Middle East.

Ocean

• Rosatom, Russia’s state nuclear corporation, expects a 50% increase in Chinese shipping through the Northern Sea Route this summer as exporters look for alternatives to traditional Asia–Europe trade lanes. Despite this growth, the route remains limited by weak infrastructure, seasonal ice conditions and concerns about secondary sanctions. Most Chinese activity along the route consists of one-way shipments, mainly focused on transporting Russian energy, rather than balanced two-way container trade.
• Transpacific shipping rates have fallen sharply, with spot rates from Shanghai to the US West Coast dropping to about $3,000 per 40-foot container, a 27% week-over-week (WoW) decline. The drop is driven by overcapacity and weaker-than-expected cargo volumes following the mid-May US-China tariff pause. Carriers had increased capacity by up to 17% for July, but demand has not kept up, prompting steep rate cuts. Rates to the East Coast remain more stable, although excess vessel supply and limited charter alternatives are starting to apply downward pressure.

Ground

• China is expanding trade and transport links with Central Asia through new infrastructure and shipping routes. Key developments include the launch of the Aktau Port Container Hub in Kazakhstan, which is China’s first logistics hub on the Caspian Sea, and new water-rail freight services from Wuhan. Since 2013, trade between China and the five Central Asian countries—Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan—has grown by 116%. This growth is supported by increased exports of new-energy vehicles (NEVs) and green technologies. The cooperation also promotes sustainable development through wind farms and joint industrial projects.

Air

• Recent airspace closures across the Middle East have disrupted thousands of flights after Israeli strikes targeted sites in Iran. Major carriers, including Air France-KLM and Ryanair, were forced to cancel or reroute flights, affecting key Europe to Asia routes. On one day alone, about 1,800 flights were impacted. Airlines are now diverting traffic over Egypt, Saudi Arabia and Turkey, which has increased fuel costs and extended travel times. The disruption has also caused a drop in European airline stocks and raised concerns about higher jet fuel prices following a rise in oil prices. With limited airspace access, European carriers are facing growing operational challenges.
• Air freight demand in Europe is expected to remain steady through June, with overall capacity staying balanced, especially on outbound routes to North America and Asia. However, certain specialized sectors, including pharmaceuticals and aerospace, may experience localized rate increases and transit delays. These impacts are more likely for temperature-sensitive or hazardous shipments. No major tariff or regulatory changes are expected, but shippers remain cautious because of ongoing economic uncertainty and geopolitical tension in eastern Europe.

Ocean

• Freight rates for Russian oil shipments to India have fallen as more tankers become available, following a drop in Urals crude prices below the Group of Seven (G7) price cap of $60 per barrel. This has led to a return of Western shipowners, particularly from Greece, who had previously exited the market. However, a proposal by the EU to lower the cap to $45 could again limit access to Western shipping services, which may tighten vessel supply and push rates back up. These developments reflect the influence of EU policy on global maritime logistics.

Ground

• The Emmerich to Oberhausen railway line, a key section of the Betuwe Route linking the Port of Rotterdam to Germany, is being upgraded to increase capacity and improve efficiency. The project includes building a third track along 46 kilometers, with 22 kilometers being completely rebuilt. The final 3 kilometers approaching Oberhausen will be expanded to four tracks. The upgrade is scheduled for completion by 2026 and is essential for handling rising freight volumes between the Netherlands and Germany.

Air

• Following recent US military strikes on Iran and escalating tensions between Iran and Israel, airlines continue to cancel flights to affected areas in the region. Major carriers such as United Airlines, American Airlines and Air France-KLM have suspended flights to key hubs including Dubai and Doha. While Qatar Airways and Emirates have maintained cargo operations, delays and diversions are likely as carriers reroute to avoid restricted airspace.
• Saudia Cargo has signed two new global logistics partnership agreements, one with Scan Global Logistics (SGL) and the other with Air Logistics Europe. The agreement with SGL grants the company priority access to Saudia Cargo’s international network to support efficient air freight operations and shared growth. The partnership with Air Logistics Europe is focused on strengthening Saudia Cargo’s presence in Europe and expanding flexible cargo services between the United Kingdom and Saudi Arabia. Both agreements are part of the carrier’s strategy to expand its global footprint and improve service offerings.

Ocean

• The Saudi Ports Authority, also known as Mawani, has announced the launch of a new shipping service called IM2 at Jeddah Islamic Port. Operated by Emirates Line and Wan Hai, the service aims to support the competitiveness of Saudi ports, enhance global trade, and improve operational efficiency. The IM2 route connects Jeddah with Mundra in India, Alexandria in Egypt and Mersin in Turkey, with a handling capacity of 2,800 twenty-foot equivalent units (TEUs). Jeddah Islamic Port features 62 multi-purpose berths, two container terminals with a combined capacity of 7.5 million TEUs, a logistics park for warehousing and re-export, direct truck access and other facilities including general cargo terminals, dry docks and marine service berths. The port’s total handling capacity reaches 130 million tonnes.
• Indian exporters are urging the government to shift cargo operations from Iran’s Bandar Abbas port to Chabahar port, which is operated by India Ports Global Limited (IPGL), to protect trade routes with Central Asia, Afghanistan and Russia. The suggestion comes amid rising regional tensions and increased freight costs. Shipping rates to the Middle East have become more expensive, with ocean freight to Europe and the Mediterranean rising by $1,000 per twenty-foot equivalent unit (TEU), and transport costs for a 20-foot container increasing by $500 to $600. Exporters are concerned that further escalation could threaten port security and disrupt access to the Strait of Hormuz, a critical route for more than 80% of India’s oil imports.

• Tariffs imposed under the International Emergency Economic Powers Act (IEEPA) will remain in effect while the Court of Appeals for the Federal Circuit reviews the case. This follows the court’s decision to pause a lower court ruling that had declared the tariffs unlawful. Although the Court of International Trade had ordered the government to stop collecting the tariffs within ten days, that order is now on hold. As a result, IEEPA-based tariffs, including those applied to goods from China, Canada and Mexico, will continue to be enforced. The appeals court has scheduled a full court review with oral arguments set for July 31, citing the case’s broad implications.

• The Bureau of Industry and Security has announced that starting June 23 at 12:01 a.m. Eastern Time, the 50% Section 232 tariff on steel will also apply to the steel content in certain derivative products, excluding those from the United Kingdom. Affected goods include:

  • Combined refrigerator-freezers (HTSUS 8418.10.00)
  • Dishwashers (HTSUS 8422.11.00)
  • Small and large dryers (HTSUS 8451.21.00 and 8451.29.00)
  • Washing machines (HTSUS 8450.11.00 and 8450.20.00)
  • Chest and upright freezers (HTSUS 8418.30.00 and 8418.40.00)
  • Cooking appliances such as stoves, ranges and ovens (HTSUS 8516.60.40)
  • Food waste disposers (HTSUS 8509.80.20)
  • Welded wire racks (HTSUS 9403.99.9020)
  • These tariff changes apply to the steel content in the listed products under Section 232 and are part of ongoing trade enforcement measures.

• The Department of Commerce has released guidance for how United States auto manufacturers can apply for offsets to the 25% Section 232 tariff on auto parts, which took effect on May 3. Auto parts under the United States-Mexico-Canada Agreement (USMCA), excluding knock-down kits, are temporarily exempt until tariffs are applied only to non-US content.
  Manufacturers can claim offsets based on vehicles assembled in the US. For vehicles built between April 3, 2025 and April 30, 2026, the offset equals 3.75% of the manufacturer's suggested retail price (MSRP). For vehicles built through April 30, 2027, the offset is 2.5%. Only authorized importers may apply offsets against Section 232 auto part tariffs.
  Applications open June 13 and must include production and tariff-related data. Approved offsets may be carried forward until used. However, no new offsets will be issued after April 30, 2027.