As we navigate the complexities of the first quarter of 2025, the transport market continues to evolve under the influence of geopolitical events, economic policies, and shifting market dynamics.
Air Freight: Riding the E-Commerce Wave
The air freight sector has experienced significant growth, propelled by the booming global parcel delivery market, particularly in the Asia-Pacific region. This surge has led to a 5% compound annual growth rate since 2020, with projections reaching €700 billion by 2028. Consequently, contract rates for 2025 have risen by approximately 10% for long-haul and intra-Asian routes. However, capacity constraints and geopolitical tensions, especially on North China to U.S. lanes and Asia-Europe routes, continue to create bottlenecks, tightening space and pushing rates upward.
Sea Freight: Navigating Capacity Challenges
The sea freight sector remains dynamic yet challenging. The global container shipping fleet grew by 10.6% over 2023, adding 2.92 million TEU of new capacity. Notably, Asia-Europe routes saw a sharp 31% rise in fleet capacity, primarily due to ongoing disruptions caused by the Red Sea crisis. This crisis has extended sailing distances, requiring more vessels to maintain schedules and consequently limiting the actual weekly capacity growth on Asia-Europe lanes to just 8.8%. Additionally, potential labor disruptions at U.S. East and Gulf Coast ports could further impact operations, with carriers preparing contingency plans, including surcharges, to mitigate potential delays.
EU Road Freight: Advocating for Harmonization
The road freight sector is calling for a modernized and harmonized EU customs framework. With 85% of road freight operators being SMEs, inconsistent customs procedures across Member States disproportionately impact the sector, causing delays and unnecessary penalties. Streamlining and digitalizing customs systems is crucial to ensure that the EU's borders facilitate trade rather than hinder it. Delays in IT system developments pose risks to the full implementation of the 2016 customs legislation, with a deadline approaching in December 2025. The coalition is pressing legislators to address these challenges and ensure alignment with global frameworks like eTIR to boost international trade efficiency.
Strategic Considerations
In light of these developments, supply chain professionals should consider the following strategies:
Diversify Supply Chains: Explore alternative sourcing options to mitigate risks associated with geopolitical tensions and economic policies.
Invest in Technology: Adopt advanced analytics and real-time data integration to enhance operational efficiency and resilience against market fluctuations.
Strengthen Partnerships: Collaborate closely with logistics providers to gain better access to capacity and navigate the complex freight landscape effectively.