2025 Q2 Global Freight Transportation and Logistics Trends

Global and Regional Demand Growth Muted

• International Air Cargo demand has grown +3% YTD through Q1 2025, significantly down from the +11% seen in Q1 2024.¹
• Demand from the APAC, Latin America and North America regions lead global regions in international Cargo-Tonne-Kilometers (CTK) growth through February with +6.4%, +7.3% and +7.0% respectively.²
• eCommerce disruption has begun due to new regulations and tariff updates but will likely remain a significant contributor to overall global air cargo demand growth.^3,4
• Forecasts project lower demand growth in Q2, with APAC → EU/NA and EU → NA leading all trade lanes.⁵

Implications: Demand growth will continue to be muted relative to 2024, but continued volatility in the geopolitical space will likely impact trade lane shifts globally.​

Sources: 1) WorldACD, 2) IATA, 3) Xeneta, 4) Loadstar, 5) Accenture Cargo

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Capacity and Rate Impacts

• Capacity growth exceeded demand through the first two months of 2025 with supply up +3.7% through February, with APAC and Latin American capacity making up the majority of global growth.²
• Scheduled capacity will likely remain flat or contract slightly over the next five months (May-Sep), with widebody belly capacity increasing in the busy summer travel months and freighter capacity decreasing.⁵
• Globally, rates have continued to increase through Q1 2025, with average global rates up +2.6% YoY from the first quarter of 2024.¹

Implications: Capacity will likely continue shifting towards high volume ex-APAC lanes, providing space as demand growth consolidates, with rates likely to remain volatile as geopolitical negotiations continue.​

Sources: 1) WorldACD, 2) IATA, 5) Accenture Cargo

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Tariff Disruptions and Macroeconomic Trends

• Tariff updates pose a threat to global supply chains, but the volatile situation has not yet caused massive disruptions as the industry adapts while the situation continues to unfold.⁴
• GDP growth projections have remained unchanged from earlier forecasts, with a 2.5% increase expected, driven by growth in APAC and China, which is expected to outpace overall growth.⁶
• The Global Manufacturing PMI has remained above the neutral 50.0 mark for the first three months of 2025, with China increasing to 51.2 in March and the US Manufacturing PMI falling to 50.2 in March from a peak of 52.7 in February.⁷

Implications: Global macroeconomic indicators remain relatively positive despite geopolitical tensions and ongoing updates to supply chain norms. The industry will likely continue to slow play the situation which may temper demand growth in the near term.

Sources: 4) Loadstar, 6) IHS, 7) S&P

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Industry Trends

• Network optimization has become top of mind for businesses due to rapidly changing global trade policies and weather disruptions on their supply chains.¹
• Supply chain visibility offers freight transparency in real time and predictive freight visibility to anticipate challenges, using data analysis to identify trends for shippers.¹
• Supply chain diversification continues to remain a pivotal strategy with ongoing geopolitical tensions, technological advancements and climate disruptions.

Implications: Businesses will continue to focus on how to create flexible, cost-effective supply chains in the midst of geopolitical concerns and weather challenges.​

Source: 1) Supply Change Dive

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Hospital Supply Executives Maintain Concerns Over PMI Data

• ISM Hospital PMI decreased to 51% from the prior month’s 56% due to tariffs and US government funding reductions, giving cause for concerns about future volume growth.²
• The ISM Hospital survey reported executives concerned about lower month-over-month surgical volumes and inventory levels decreasing due to high respiratory illnesses depleting supplies.²

Implications: Hospital supply executives will remain uneasy about the impacts of tariffs and government funding reductions, even with their prior planned initiatives in response to cost pressures.

Source 2) Institute for Supply Management

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Less-Than-Truckload (LTL) Carriers Keeping Rates Static in Freight Market

• LTL carriers are piloting effectively in a low-volume landscape, focusing on cost-effective lanes, customer relationships and reliable freight, instead of chasing volume with rate concessions.³
• Truckload (TL) carriers typically feel the impact of macroeconomic headwinds and trade policies, while LTL carriers experience a delayed reaction, allowing logistical plans and strategic options to develop.³

Implications: LTL carriers remain volume-focused as uncertain economic outlook, coupled with transformative trade policies, have delayed an expected freight market recovery in 2025.

Source: 3) Freightwaves

Fees Announced for China-Built Vessels

• Effective October 14, 2025, a service fee of $120 per container will apply to vessel operators of Chinese-built containerships.^1​
• Fees are roughly four times higher for Chinese-built containerships with Chinese vessel operators.¹ ​
• Fees can be charged up to five times per year, per vessel and will be charged per voyage rather than per US port call.¹​
• ​Various exemptions are in place, most notably the ability to remit fees for up to three years if a vessel operator orders and takes delivery of a US-built vessel.²

Implications: These new port fees are intended to curb China’s influence in shipping but are likely to lead to significant disruption to global trade and increased costs for US shippers and consumers.​

Source: 1) CNBC, 2) FreightWaves

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Supply and Demand Outlook​

• The global fleet grew by 380K TEU in 1Q25, bringing the active fleet to 31.2M TEU. The global orderbook is now surpassing 9M TEU and Drewry has forecasted global capacity growth at 6% in 2025, after 11% growth in 2024.³
• Demand forecasts have declined significantly as a result of recent political developments in the US with Drewry revising Asia – North America volume forecast down from +10.2% to +2.1% YoY.^3​
• The National Retail Federation has also significantly revised forecasts downward with US import TEUs for May, June, July, August declining -20.5%, -26.6%, -27%, -26.8% YoY respectively.⁴

Implications: Significant downturns in demand, combined with a growing global fleet, suggest market rate declines, with Drewry forecasting a 15-17% decrease in the average global rate YoY¹. However, trade war volatility and uncertainty around a Red Sea return could bring unpredictable consequences for the global market.​
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Sources: Sources: 1) CNBC, 2) FreightWaves, 3) Drewry Container Forecaster, 4) National Retail Federation, 5) JOC

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Early Tariff Impacts​

• The trans-pacific trade lane is seeing impacts with multiple blank sailings announced from China to US West Coast.⁵
• While utilization out of China is falling, vessels in Southeast Asia are reaching the 90-100% range for utilization as US shippers seek to frontload cargo during the 90-day window from reciprocal tariffs.⁵
• Prolonged back-and-forth between the US and China will force carriers to consider their trans-pacific networks and whether there is opportunity to adjust rotations away from China to Southeast Asia.⁵

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Implications: Should a significant advancement of cargo take place in Southeast Asia over the next 90 days, serious disruption could arise due to a lack of equipment and a lack of port calls in the region.​

Source: 5) JOC

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IEEPA, de minimis and 232 Tariffs Remain Key Factors Shaping US Trade Policy

• On April 9, 2025, the US President issued an Executive Order updating previous directives on reciprocal tariffs.¹
• Effective April 10, 2025, tariff rates for all trading partners - except China, Hong Kong and Macau - have been paused and reset back to 10%. Most goods originating from China, Hong Kong and Macau are now subject to an additional ad valorem rate of duty of 125%. These tariffs, in addition to the IEEPA tariffs from February 2025, result in a total tariff rate of 145% on US imports when China, Hong Kong SAR or Macau is the country of origin.^1​
• Effective May 2, the de minimis threshold for China and Hong Kong will be eliminated.²
• Section 232 tariff goods are excluded, with exceptions listed in Annex II.³

Implications: Importers should assess their sourcing strategies to understand the financial impact. It may be necessary to renegotiate contracts, evaluate alternative suppliers or explore tariff mitigation strategies. ​

Sources: 1) White House Fact Sheet, 2) Executive Order for de minimis, 3) Annex II

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Canadian Trade Under Scrutiny

• CARM: Importers will now have until 3 AM EDT on May 20, 2025, to post their financial security in the CARM system, following CBSA’s extension of the transition period by 30 days.⁵

Implications: Importers who do not post financial security in CARM by 3 AM EDT May 20, 2025, will no longer be able to benefit from electronic release at the border prior to payment of duties and taxes.

• Financial Transactions and Reports Analysis Centre of Canada (FINTRAC): Effective April 1, 2025, FINTRAC will share financial intelligence with Canadian provinces to support asset seizures tied to criminal activity—highlighting the need for strong importer compliance programs.⁵

Implications: Importers may face seizures if financial dealings connect (even indirectly) to suspected criminal activity; having a strong compliance program is important. ​

• Forced Labor: Certain entities and government institutions are required to submit an annual report to the Minister of Public Safety by May 31. The report must outline the actions taken in the previous financial year to prevent and reduce the risk of forced or child labor in their operations and supply chains.^4​

Implications: Businesses must prepare to comply with the updated reporting requirements of the Supply Chains Act to address the risks of forced and child labor in their supply chains.

Sources: 4) Reporting Obligations, 5) Canada CA

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