AIR FREIGHT

AIR FREIGHT: FROM +19% TO -37% MIDDLE EAST DRIVES SHARP REVERSAL IN GLOBAL AIR CARGO DEMAND

• Global air cargo growth slowed in early 2026 as the Middle East conflict triggered a 3 percent decline in volumes from March, with the region seeing a sharp 37 percent drop, according to WorldACD Market Data.

• Figures based on year-on-year changes in chargeable weight show that worldwide tonnage increased by 8 percent in January and February, before declining by 3 percent from March to mid-April. This resulted in overall growth of 3 percent for the period from January to mid-April.

• The Middle East recorded the most significant shift. After a 19 percent increase in the first two months of the year, volumes dropped sharply by 37 percent following the start of the conflict in March.

Worldwide tonnage dropped -3% YoY since the start of the war in the Middle East, ranging from -37% from the Middle East to +6% from Central & South America

Source: Air Cargo Week

AIRFREIGHT RATES – BALTIC EXCHANGE AIRFREIGHT INDEX

Source: Air Cargo News

Baltic Exchange Airfreight Index (BAI) powered by TAC Data

Rates are based on spot and contract prices provided by freight forwarders

OCEAN FREIGHT​

OCEAN FREIGHT RATE MOVEMENT (MARKET AVERAGE) IN THE PAST 3 MONTHS

Source: Xeneta

OTHER LOGISTICS NEWS YOU MIGHT BE INTERESTED IN:

Trade Lane Shifts Reshape Air Flows (Read)

Source: JOC

Breakbulk26: Data center, electricity demand buoy project cargo industry (Read)

Source: JOC

ITS Logistics April Supply Chain Report: Hormuz Crisis Strains Freight Markets Heading into Q2 (Read)

Source: Yahoo Finance

The Largest Ports are Failing Shippers (Read)

Source: Sea Intelligence

Iran allows 15 ships through Strait of Hormuz (Read)

Source: .Seatrade Maritime News

OCEAN FREIGHT: March 2026 Global Schedule Reliability Joint-Highest for the Year

• Sea-Intelligence has published issue 176 of the Global Liner Performance (GLP) report, with schedule reliability figures up to and including March 2026. As the 120-page report is quite comprehensive and covers schedule reliability across 34 different trade lanes and 60+ carriers, this press release will only cover highlights from the full report.

• In March 2026, global industry schedule reliability increased by 3.9 percentage points M/M to 62.2%, making this the joint-highest figure for 2026. On a Y/Y level, schedule reliability was higher by 5.2 percentage points. With improving schedule reliability, the average delay for LATE vessel arrivals also improved, decreasing M/M by -0.14 days to 5.48 days. Despite this, on a Y/Y level, the March 2026 figure was 0.36 days higher...

Global Schedule Reliability

Source: Sea Intelligence

$12.5 billion 'down payment' brings air traffic control out of 1990s.
Now, more money is needed for new software and AI

• Washington – The Department of Transportation is eliminating antiquated paper strips, copper communications wiring and computer floppy discs, but it says more money is needed to keep upgrading the decades-old air traffic control system and integrate new technologies like artificial intelligence and software to streamline US flights. At a news conference at the DOT headquarters on Tuesday, the agency showed the progress it has made in almost a year since it announced plans to build a new air traffic control system.

• Congress allocated $12.5 billion in President Donald Trump’s spending bill – which the administration calls a “down payment” – but there’s still more to be done, said Transportation Secretary Sean Duffy.
• “We are going to need more money for the software side of this build,” Duffy told a room full of reporters and officials. “(Congress is) going to have to find a pathway to get us the rest of that money. It’s going to take us time to develop it, deploy it, debug it, train on it.”
• The decades-old system has been under scrutiny by lawmakers, aviation officials and the public after a series of crashes and other high-profile incidents, spotlighting the stress controllers are under....

Source: CNN US

OTHER INNOVATION NEWS YOU MIGHT BE INTERESTED IN:

Tech layoffs top 73,000 in 2026 as AI drives cuts at Meta, Oracle, others (Read)

Source: MSN

China's DeepSeek releases long-awaited new AI model (Read)

Source: Money Control

AI impact: Are companies using AI to grow—or just to cut? (Read)

Source: Logistics Business

AI optimises logistics solutions (Read)

Source: Real Economy News

Amazon pushes AI use and closely tracks adoption, even as some employees push back (Read)

Source: Business Insider

AIR FREIGHT

CARGO CAPACITY STILL IN RECOVERY MODE​​

• Global air cargo capacity is still in recovery mode following the Middle East war. Rotate data shows international widebody capacity last week was 11% below pre‑Chinese New Year levels, improving from the 20% drop immediately after fighting began. The decline is mainly due to heavily reduced flying by Middle East airlines, like Qatar Airways and Emirates, which are operating limited schedules.

• Routes via the Middle East remain the most affected: capacity from Asia Pacific to the Middle East is down 39%, and Middle East to Europe down 36%. To offset this, carriers have increased direct Asia Pacific–Europe flying by 19%.

• At the same time, air cargo rates are rising quickly, with Hong Kong–Europe spot rates now above $5.15/kg, nearly 30% higher than before the conflict. Rates from India have also surged, up 60% to the US and 80% to Europe

Total air cargo capacity growth

Tonnes, 11 Mar 2026 – 18 Mar 2026, growth vs 4 Feb 2026 – 11 Feb 2026

Source: Air Cargo News,

Airfreight Rates – Baltic Exchange Airfreight Index

Source: Air Cargo News​

Baltic Exchange Airfreight Index (BAI) powered by TAC Data​

Rates are based on spot and contract prices provided by freight forwarders​

OCEAN FREIGHT​

TRANSHIPMENT HUBS DRIVE GROWTH IN GLOBAL PORT VOLUMES​

• Throughput at the world’s leading container ports again exceeded forecasts in 2025, rising an estimated 5.2% (2024: 7.5%), as volumes were driven by both higher trade demand and widespread disturbance in the liner shipping network. Recording a second year of solid growth, the figure was above the 4.7% increase seen in the general container trade. This reflected the serious operational disruption seen during the year, including largescale re-routing and supply chain disorder. The threat - and temporary imposition in April - of US tariffs resulted in major cargo redistribution, particularly in Southeast Asia, while the ongoing effect of the Red Sea closure continued to divert cargo to other ports.

• Geopolitical events also influenced key US and Middle East ports. Volume growth at Los Angeles/Long Beach was far below the international average, at less than 1%, as US tariff policy deterred shipments into the country.

• Port volumes in China (excluding Hong Kong) also grew at a much quicker pace in 2025, registering a growth rate of 8.3% in 2025, up from 3.5% a year earlier, driven principally by activity at the country’s top-10 ports.

Top 30 ports in 2025 (2024 ranking in brackets)

Source: Alphaliner 2026-11

Ocean Freight Rate Movement (Market Average) in the Past 3 Months

Source: Xeneta

AIR FREIGHT

Asia airfreight rates ease after Chinese New Year, but year on year gains hold​

• Seasonal events are impacting air cargo traffic and rate development in the week ending 15 February. After a run of five consecutiveweek-on-week increases in global airfreight tonnage, worldwide volumes dropped as all flowers had been delivered for Valentine'sDay and global trade activity slowed down in the run-up to the Lunar New Year (LNY) holiday that started on 17 February.​

• Airfreight rates show mixed short-term movements: modest week-on-week gains in some regions, declines in others, but year-on-yearcomparisons remain strong in Asia and London, while Frankfurt andChicago lag behind.

• According to WorldACD, the global tonnage was +7% higher than a yearago within 9 to 15 February, driven by traffic originating Asia Pacific (+22%)and MESA (+9%).

• Overall, worldwide average pricing after the is showing a slightly positivetrend, but with factories in much of Asia closed in LNY, demand and ratesare likely to experience headwinds similar to last year during LNY,triggering reductions and shifts in capacity.

Source: Air Cargo News, WorldACD​

Airfreight Rates – Baltic Exchange Airfreight Index​

Source: Air Cargo News​

Baltic Exchange Airfreight Index (BAI) powered by TAC Data​

Rates are based on spot and contract prices provided by freight forwarders​

OCEAN FREIGHT​

Overcapacity and weak demand stall 2026–27 service contract deals​

• The ocean freight industry is entering 2026 under heavy pressure from overcapacity and weak demand, with spot rates on Asia–U.S.routes falling sharply since January and showing little sign of stabilizing. Rates to the West Coast have dropped more than 20% this yearto around $1,600 per FEU, while East Coast rates are down 21% to about $2,400 per FEU, both significantly lower year on year. ​

• Carriers have continued to add capacity—expected to reach 1.4million TEUs in March—but importers are holding back on signing2026–27 service contracts, anticipating further declines andpreferring to wait until after the TPM26 conference in early March.

• This dynamic has created a clear shippers’ market, where retailersand importers are leveraging falling spot rates to delaycommitments, while carriers struggle to balance supply withdemand. Meanwhile, Asia–Europe trade lanes are also weakening,with rates sliding despite reduced capacity, highlighting broaderfragility in global shipping. Looking ahead, 2026 is expected to bedefined by persistent overcapacity, challenging contractnegotiations, and potential geopolitical risks in the Red Sea thatcould further disrupt liner networks.

Container spot rates from ​North Asia to US West and East coasts, in USD per FEU

Source: JOC, freightwaves​

Ocean Freight Rate Movement (Market Average) in the Past 3 Months

Source: Xeneta

AIR FREIGHT

GLOBAL AIR CARGO SET TO GROW 2.6% IN 2026 DESPITE TRADE SLOWDOWN

• The International Air Transport Association (IATA) projects that global air cargo will grow 2.6% in 2026, demonstrating remarkable resilience even as overall world trade growth slows sharply.

Key Growth Drivers for 2026

• Air cargo's continued expansion will be driven by several critical factors, including AI-driven investment, rising demand for high-value and time-sensitive goods, and the accelerating shift toward e-commerce. The sector has proven its "unique stabilizing role" in the global economy by helping businesses adapt to volatile trade policy environments and enabling rapid rerouting of goods in response to tariff changes. These structural trends are expected to persist through 2026, positioning air cargo as the preferred logistics option when speed and reliability matter most.

Trade Adaptation and Frontloading Impact

• The resilience of air cargo in 2025 was bolstered by aggressive frontloading in early quarters, where exporters rushed shipments ahead of announced tariff deadlines. Between January and August 2025, Chinese exporters shifted trade away from the United States while simultaneously increasing exports to alternative markets (India, Thailand, Hong Kong, Vietnam, and the EU). The value of trade transported by air rose 25% year-over-year during January-August 2025, compared to just 7% for overall trade and less than 1% for sea freight.

Projected Slowdown in 2026

• While air cargo growth remains positive, the outlook for 2026 is more cautious than 2025. The World Trade Organization projects global trade volume growth will slow dramatically to just 0.5% in 2026, down from 2.4% in 2025. This deceleration reflects the fading of the frontloading effect, higher inventory levels, and a slowing global business cycle. IATA notes that the one-time boost from frontloading is unlikely to repeat, and trade growth is expected to remain below 1% next year. Projected global air cargo volumes will reach 71.6 million tonnes in 2026.

Source: AsiaCargoNews

Airfreight Rates – Baltic Exchange Airfreight Index

Source: Air Cargo News

Baltic Exchange Airfreight Index (BAI) powered by TAC Data

Rates are based on spot and contract prices provided by freight forwarders

OCEAN FREIGHT​

Trans-Pacific ocean rates swing as New Year looms while Trans-Atlantic capacity injection overtakes market demand

• The trans-Pacific container market exhibited volatility in Q4 2025, with West Coast rates climbing 8% due to carrier blank sailings and bi-weekly General Rate Increases (GRIs) during low-demand periods, while East Coast rates dipped 3% before surging on daily spot pricing.

• Asia-Europe trade lanes saw robust gains, with Asia-North Europe rates up 11% and Mediterranean routes rising 15%, fueled by disciplined capacity management, rising pre-Lunar New Year demand, and European importers front-loading orders ahead of China factory shutdowns. Freightos analyst noted sustained residual gains above early October lows, anticipating durable increases as Lunar New Year 2026 nears on February 17, with factories slowing from late January and halting for 1-3 weeks, prompting inventory builds amid 10-20% capacity drops and 10-30% rate hikes.

• Red Sea disruptions persist despite Maersk and ONE testing voyages after two years, a full reopening could unleash 2 million TEUs, triggering European port bunching and Far East equipment shortages.

• Looking ahead to 2026, US import demand stays uncertain amid record trans-Atlantic capacity from North Europe to US East and Gulf coasts—over 435,000 TEUs in January and 390,000 TEUs in February per eeSea, all-time highs despite blank sailings—pressuring weak spot rates stuck since early November according to Platts.

Container ship capacity on North Europe–US East and Gulf coast services, deployed and blanked, with planned capacity

Planned trans-Atlantic capacity swells to record high in January

Source: JOC, freightwaves

Ocean Freight Rate Movement (Market Average) in the Past 3 Months

Source: Xeneta

Trans-Pacific ocean rates swing as New Year looms while Trans-Atlantic capacity injection overtakes market demand

• Yusen Logistics has announced the launch of a new weekly ocean service, providing dedicated LCL (Less than Container Load) consolidation boxes from Hong Kong to Strančice, Czech Republic, ideal for shipments originating in South China or elsewhere in Asia.

• This service is tailored to address the growing demand for flexible, cost-effective, and reliable solutions for shipping components and finished goods from Asia into the heart of Central and Eastern Europe, particularly for the robust automotive and electronics supply chains.

Yusen Logistics Completes Acquisition of Walden Health, Strengthening Global Healthcare Logistics Capabilities:

• Yusen Logistics Group hammered out the acquisition of the Walden Group subsidiaries Movianto, Eurotranspharma, Transpharma International, and Walden Digital, which are the top healthcare logistic solution providers in Europe, on December 10, 2025.

• By combining Walden Health’s expertise with Yusen Logistics global network, we further reinforce the leadership in European healthcare logistics sector and demonstrate our unwavering commitment to delivering best-in-class transportation and logistics solutions for the healthcare industry.

Yusen Logistics and AGL Kenya Form Strategic Joint Venture in Kenya:

• Yusen Logistics Global Management Co., Ltd. (YLGM) and AGL Kenya signed a Memorandum of Understanding (MoU) in Paris to establish a strategic partnership in Africa, in April 2025. Leveraging AGL Kenya as a key gateway, we dedicated to strengthening the logistics capabilities including freight forwarding, multimodal transport, contract logistics, and customs brokerage across the East African.

AIR FREIGHT

De Minimis Policy Shifts

• Global air freight markets have firmed slightly in November, with Asia-Pacific spot rates rising about 2% to $3.99/kg and pushing the global average to $2.78/kg. China–US lanes saw a 5% increase, driven by e-commerce and AI server shipments, while Asia–Europe also ticked up modestly. Despite these gains, rates remain 4% below last year, reflecting a softer peak season.

• At the same time, regulatory changes are reshaping small-parcel flows: the EU announced on Nov 13 it will phase out its €150 duty-free exemption by 2028, following the US’s earlier elimination of its de minimis threshold. Together, these moves signal higher compliance costs and reduced duty-free e-commerce volumes, adding structural pressure to global air cargo alongside short-term rate volatility

• On the other hand, global capacity remained stable week on week. A two-week comparison shows a slight 1 per cent decline in available bellyhold space between weeks 44 and 45 versus weeks 42 and 43. Reduced passenger bellyhold capacity after the end of the summer season on 25 October was offset by an increase in freighter operations.

Source: Flexport, Transporto Europa

Airfreight Rates – Baltic Exchange Airfreight Index

Source: Air Cargo News

Baltic Exchange Airfreight Index (BAI) powered by TAC Data

Rates are based on spot and contract prices provided by freight forwarders

OCEAN FREIGHT​

Suez traffic shows first signs of recovery

• Suez Canal transits have begun to rise, with weekly averages increasing from 229 ships earlier in 2025 to 244 in October and 269 in November. While this remains well below the pre‑crisis level of nearly 500 weekly crossings, it marks the first signs of recovery. The rebound follows the Houthis’ announcement of a pause in maritime attacks, linked to the ceasefire between Israel and Hamas. This comes two years after the hijacking of Galaxy Leader, which triggered the Red Sea crisis

• Suez Canal Authority’s spokesperson stressed that restoring stability in the Red Sea requires carriers to return to Bab El‑Mandab and the canal. The authority is holding meetings with major carriers to encourage their return.

• Analysts forecast that if peace holds in Gaza, many operators may return by the first half of 2026. Diversions around the Cape of Good Hope have tightened supply: 10–11% for containerships, ~2% for crude/product tankers, and smaller percentages for LNG, LPG, and dry bulk.

• Looking ahead, the Suez Canal Authority is actively courting additional vessel categories beyond containerships. Multiple agency representatives have called for targeted incentives for oil tankers, bulk carriers, and LNG vessels, which require less time to adjust sailing schedules.

Source: : Worldports, G Captain

CMA CGM remains the leading Suez Canal user among the global carriers

• Recent Suez Canal transits by the CMA CGM BENJAMIN FRANKLIN and her sister vessel CMA CGM ZHENG HE sparked speculation that major East–West carrier alliances might soon revert from the Cape of Good Hope back to the shorter Red Sea route. Despite some easing of tensions in the region, current network schedules do not support this assumption.

• According to Alphaliner, CMA CGM continues to be the top carrier transiting the Suez Canal, maintaining its lead among global operators. The French line accounted for 17.5% of total container ship transits, ahead of MSC at 16.2% and Maersk at 13.4%.

• This confirms CMA CGM’s strategic reliance on the Suez route, even as carriers adjust to geopolitical risks and alternative pathways.

• The Suez Canal remains a critical artery for global container trade, with CMA CGM’s position underscoring its scale and influence in east–west shipping.

Source: Alphaliner 2025-45, Global Maritime Hub

Ocean Freight Rate Movement (Market Average) in the Past 3 Months

Source: Xeneta

AIR FREIGHT

Air cargo finds its next lift in Southeast Asia

• The Southeast Asia airfreight market is expanding as global manufacturers shift production from China, driven by high demand for AI servers, semiconductors, and consumer electronics, focused on Southeast Asia, particularly Thailand, Vietnam, Malaysia, and Singapore. Asia Pacific to US air trade in January to July 2025 was up 11% YoY, led by high-tech electronics from Taiwan and Vietnam.

• The demand for air cargo from Southeast Asia to North America grew 50% YoY in 2025 (Jan to July), and in July 2025 alone, the growth was at 68%, according to the data from air cargo consultancy firm, while actual spot rates have fallen or stalled due to increased regional capacity and diversified routing through Northeast Asia, the Middle East, and Europe.

• Meanwhile, the Trans-Pacific airfreight demand is rising in October as shippers front-load shipments ahead of anticipated 100% tariffs on Chinese goods, though prices have largely steadied due to ample capacity. Freight volumes into the US are up, with carriers quickly mobilizing capacity and yoy China–US capacity increasing about 21% (24% week-over-week after the tariff news).

Source: stattimes, JOC

Airfreight Rates – Baltic Exchange Airfreight Index

Source: Air Cargo News

Baltic Exchange Airfreight Index (BAI) powered by TAC Data

Rates are based on spot and contract prices provided by freight forwarders

OCEAN FREIGHT​

Inflation-adjusted spot rates below 2019

• The spot rates measured on Asia-Europe and Asia-USEC are clearly below pre-pandemic 2019 levels, when taking inflation into account. Asia-USWC is only 11% above 2019.

• Per the analysis from Sea-Intelligence, and look into the spot container shipping rates in a way people don’t usually do—by considering inflation. Most rate indexes show prices in today’s dollars, so if rates seem the same as ten years ago, they’re actually worth less money now due to inflation.

• After factor in inflation, spot freight rates now (October 2025) are not only back to pre-pandemic levels—they’re actually lower than late 2019 across all routes.

• Specifically, rates are down 3% for Asia–USEC, 17% for Asia–North Europe, and 13% for Asia–Mediterranean, compared to 2019. That means rates really aren’t “high” anymore. And with lots of new ships on the way and the Suez Canal reopening sometime soon, Sea-Intelligence forecasts there’s even more downward pressure coming for carriers.

Source: SeaIntelligence738

Ocean Freight Rate Movement (Market Average) in the Past 3 Months

Source: Xeneta

AIR FREIGHT

Tariffs throw US airfreight into turbulence

• Air cargo volumes from India to the US have continued to decline in September due to new tariffs, with a reported 8% drop week-on-week in the second week of Sep. This decline follows earlier decreases of 12% and 11% in the preceding weeks, contrasting with a spike of 28% in late Aug as shippers rushed to send goods before the tariffs took effect.

• In contrast, exports from India to Europe saw a slight decline of 1% in week 37, but overall volumes remain above last year's levels. Other regions, such as Dubai, also experienced a decrease in cargo volumes to the US, with tonnages more than a third lower than the July–August average.

• FedEx has shifted freighter capacity away from the transpacific trade lane in favour of Asia-Europe as tariffs on e-commerce shipments have taken their toll on demand levels to the US. The express firm had reduced its own-controlled transpacific capacity by 25% compared with last year and by 10% compared with the previous quarter.

Source: Air Cargo News, CAAS

Airfreight Rates – Baltic Exchange Airfreight Index

Source: Air Cargo News​

Baltic Exchange Airfreight Index (BAI) powered by TAC Data​

Rates are based on spot and contract prices provided by freight forwarders

OCEAN FREIGHT​

Are shipping lines removing Chinese vessels?

• The global shipping industry faces transformation as new U.S. regulations target Chinese vessels, effective October 2025. Sea Intelligence analyzes whether carriers are removing Chinese-built vessels from their operations, focusing on Transpacific and Transatlantic trades.

Transpacific Trade

• Early signs of reduction in Chinese-built vessel deployment

• Share decreased from 25-30% to 20-25% in recent weeks

• More pronounced impact visible on Asia-North America West Coast trade

• Similar trend (though less pronounced) on Asia-North America East Coast trade sea-intelligence.com

Transatlantic Trade

• No material statistical impact observed yet

• Individual vessel redeployments occurring but not creating widespread changes

• Data doesn't support notion of systematic removal of Chinese-built vessels

Transpacific routes demonstrate clear, quantifiable shifts in Chinese-built vessel usage, while Transatlantic operations show only isolated redeployments without broader pattern changes.

Share of Vessels Built in China

Transpaciifc (3WK Rolling Avg.)

Source: Sea Intelligence

Ocean Freight Rate Movement (Market Average) in the Past 3 Months

Source: Xeneta

AIR FREIGHT

Tariffs throw US airfreight into turbulence

• In 2025, the U.S. airfreight industry is experiencing significant disruption due to fluctuating tariffs imposed on trade with China. These tariffs have led to increased costs and forced companies to reevaluate their supply chains, inventory management, and shipping strategies. The elimination of the $800 de minimis exemption for Chinese goods is particularly impacting low-value e-commerce shipments, which represented approximately 1.2 million tons or over 50% of goods shipped from China to the U.S. by air.

• Since 2018, the share of these shipments has grown from 5% to its current level due to changes in tariff policy. Airlines are reallocating capacity in response to these changes, with approximately 70 freighters temporarily ceasing operations on Transpacific routes and some services redirected to other regions. The uncertainty surrounding tariffs has created a challenging environment, leading to potential long-term implications for demand in the airfreight sector.

• With e-commerce demand has in part displaced general cargo (or contains general cargo shipped under de minimis rules), therefore in reality around 25% of China-US demand may be at risk with changes to de minimis rules.

• According to the whitepaper released by TIACA, e-commerce air cargo volumes could double within the next decade.

Source: Aircargonews, Aircargoweek

Airfreight Rates – Baltic Exchange Airfreight Index

Source: Air Cargo News​

Baltic Exchange Airfreight Index (BAI) powered by TAC Data​

Rates are based on spot and contract prices provided by freight forwarders

OCEAN FREIGHT​

COSCO Group leads Far East-India/Middle East/Red Sea trade

• A review of the Far East – India Subcontinent/Middle East/Red Sea trade lane shows that COSCO Group is the most dominant player in that market.

• Unsurprisingly, Asian carriers account for the vast majority of lines on this route, and the Europeans involved are generally mainline operators. The only exception here is Denmark’s Unifeeder, which is however controlled by the Dubai-based DP World, so that the route corridor is one of Unifeeder’s home turfs.

• COSCO Group is in lead position with about 250,000 teu of capacity deployed, which represents 12.7% of all operated slots in the trade. The Chinese group is also the only player that operates ‘Megamaxes’ on this corridor. Its ‘MEA5’ service, part of the OCEAN Alliance network, is run with five such vessels, averaging some 19,000 teu, as of the start of July. Maersk, despite being the global number two, only operates some 4% of all slots in this trade lane, landing it in ninth place.

Far East - India / Middle East / Red Sea: capacity deployment of the top-15 carrier

Source: Global Marine Hub

Ocean Freight Rate Movement (Market Average) in the Past 3 Months

Source: Xeneta

AIR FREIGHT

JAL plans instant air cargo orders to offset Trump tariff uncertainty

• Japan Airlines (JAL) is implementing instant air cargo orders to mitigate uncertainties from Trump-era tariffs affecting U.S.-Japan trade. This strategy aims to enhance supply chain efficiency and provide faster delivery options, helping businesses adapt to fluctuating market conditions and maintain competitiveness despite changing trade policies.

• Following the U.S. reciprocal tariff deadline extension, demand for inbound cargo has remained stable, with no significant upward pressure on rates. As the August 12 expiration of U.S. tariffs on China nears, air cargo trends show Southeast Asia to the U.S. rates steady at $4.84/kg, while China-U.S. prices have dipped 7% to $5.17/kg. Rates from South Asia are down 4% to $4.55/kg, and transatlantic rates decreased 2% to $1.77/kg.

• This stability indicates that shippers are not rushing to move goods ahead of the deadline, likely due to expectations of trade deals or further extensions, along with prior frontloading during recent pauses.

Image source: Nikkei

Source: Freightos, Nikkei

Airfreight Rates – Baltic Exchange Airfreight Index

Source: Air Cargo News

Baltic Exchange Airfreight Index (BAI) powered by TAC Data

Rates are based on spot and contract prices provided by freight forwarders

OCEAN FREIGHT​

Asia-NAWC: Back to square one

The trade war induced spike is now all but gone on the Transpacific to the West Coast.

Planned weekly capacity for June, July and August, Asia-NAWC

Planned weekly capacity for June, July and August, Asia-NAEC

• In June, carriers added capacity for the Asia-NAWC trade to meet early demand, but the weekly average remained slightly above early May levels, and the expected surge did not materialize. For July, plans for a significant capacity increase have been adjusted downward, and August forecasts indicate a clear reduction in capacity expectations.

• In contrast, the Asia-NAEC trade did not reach anticipated levels but is seeing a sustained capacity increase in July, contributing to the narrowing spread in spot rates between Asia-USEC and Asia-USWC. Similar declines in planned increases for August are observed for both trades.

Source: Sea Intelligence 724

Drewry: Ocean rates fall for fifth straight week

• Drewry’s World Container Index reported a 2.6% decline in ocean freight rates as of July 19, marking five consecutive weeks of decreases. This trend indicates a shift in market dynamics following the volatility caused by U.S. tariffs in April and a subsequent China-U.S. tariff pause. Rates rose in May and early June but have dropped steadily since mid-June.

• Trans-Pacific spot rates are also affected, with prices from Shanghai to Los Angeles down 4% to $2,817 per forty-foot equivalent unit (FEU) and rates to New York down 6% to $4,539 per FEU. However, both routes remain higher than 10 weeks ago, with Los Angeles rates up 4% and New York rates up 24% since May 8.

• The decline in spot rates is attributed to weakening demand, which is expected to continue. Drewry’s outlook anticipates further weakening of the supply-demand balance in the second half of 2025, impacting future rates based on trade policies and potential tariffs

Drewry’s spot container rates for major trade routes

Source: Yahoo Finance

Ocean Freight Rate Movement (Market Average) in the Past 3 Months

Source: Xeneta

AIR FREIGHT

General Air Cargo In Decline As China-us E-commerce Boom Slows

• Airlines prioritized surging e-commerce shipments on trans-Pacific and Asia-Europe routes over the past few years at the expense of general air freight. But as US tariffs curb low-value imports from China, carriers are finding traditional markets have also declined.

• In 2024, air cargo experienced a record 12% growth in global volume, primarily driven by e-commerce demand. However, the elimination of the U.S. duty-free exemption on May 2nd has resulted in decreased air cargo demand on the trans-Pacific route. As a result, airlines that heavily focused on e-commerce are now seeking opportunities in traditional forwarder-driven markets, which have weakened due to various economic and geopolitical factors.

• Since May 2nd, there has been a drop in air cargo demand on the trans-Pacific. The data shows freighter capacity deployed on the eastbound trans-Pacific from May 12–18 fell 8% yoy to 82,000 tons while increasing 19% yoy to 74,000 tons on Asia-Europe.

• The air cargo rates from Hong Kong to the US surged 50% ahead of the May 2nd deadline, according to Xeneta. Since then, rates have declined.

Asia Pacific to North America air freight capacity with weekly percentage change

Image source: spglobal

Airfreight Rates – Baltic Exchange Airfreight Index

Source: Air Cargo News

Baltic Exchange Airfreight Index (BAI) powered by TAC Data

Rates are based on spot and contract prices provided by freight forwarders

OCEAN FREIGHT​

June Expected To Be Peak For Niche Carriers In The Trans-pacific: Analyst

• Niche carriers, smaller operators with limited deep-sea capabilities, represented 7%-10% of the total weekly capacity on the Asia-North America West Coast (NAWC) in 2019. During the pandemic, new entrants capitalized on high freight rates and strong consumer demand, increasing niche carriers' share to 10%-15% by mid-2021. However, as market conditions stabilized, these new entrants phased out their services by June 2023. By January 2024, niche carriers increased their capacity share to 13%, indicating a return of opportunistic carriers to the market due to favorable conditions.

• According to Sea-Intelligence, recent months have seen niche ocean carriers deploying 4.6% of the weekly capacity in trans-Pacific by the end of June in which the capacity “is back at the level” seen during the height of the pandemic. The draw for the niche carriers is the strength in spot freight rates, Sea-Intelligence said, although those rates have already started to soften amid the broader injection of fresh capacity.

• Sea-Intelligence believe current conditions mirror those of the pandemic. If history repeats, they may quickly withdraw capacity once the market normalizes. The data sees the current surge in niche carrier capacity is ending fast, the weekly niche carriers will account for 3.8% of capacity by the end of July, with that amount dropping to 2.6% by mid-August

Niche Carrier Cap Share of Weekly Asia-NAWC Cap (3wk avg.)

Source: JOC, SeaIntelligence718

Vessels Now Keeping to Omani Waters in Strait of Hormuz Traffic Scheme

• Shipping traffic through the Strait of Hormuz is currently adhering more strictly to established sea lanes within Omani waters, avoiding Iranian territorial waters in response to heightened regional tensions and recent U.S. military actions against Iran. Vessels entering and leaving the Arabian Gulf are navigating closer to the Omani coast in the Gulf of Oman approaches and maintaining routes wholly within Omani waters at the strait’s narrowest point, a shift from previous patterns that often included Iranian waters. This adjustment aims to reduce risk amid concerns over potential conflict escalation, while the strait remains open and commercially active with routine traffic levels. However, concentrating ships into narrower lanes near Oman and the Emirati coast increases collision risks. Maritime authorities continue to advise caution, especially given Iran’s military reach and ongoing geopolitical instability in the region

• Concurrently, the escalating Israel-Iran conflict has triggered a sharp rise in shipping insurance costs in the Middle East. Insurance premiums for vessels transiting the Persian Gulf have increased from 0.125% to 0.2% of a ship’s value, with war risk rates also climbing for the Red Sea and Israeli ports seeing a more than threefold surge. The validity period for insurance quotes has been shortened due to market volatility, and some shipowners are rerouting to avoid the Strait of Hormuz, causing a modest decline in voyages through the region.

Ships in the Straits of Hormuz identified by vesselfinder.com

Source: MaritimeExecutive, MaritimeExecutive-2, CNBC

Ocean Freight Rate Movement (Market Average) in the Past 3 Months

Source: Xeneta