Back in December 2024, this newsletter was mentioning that going to 2025, the freight markets would not ease and that shippers would face new challenges.

Indeed, the month of March was marked by a significant global trade uncertainty, that had a direct impact on freight markets.

AIR FREIGHT

The market is excepted to remain tight: airfreight rates continued to rise worldwide lately, as firms looked to move goods before the USA announce what are expected to be their most far-reaching range of tariffs yet.

Baltic Air Freight Index figures show that overall prices increased by 2.4% in the last week of March and are up by 5.1% compared with a year ago.

Overall rates have been on the rise since early March - it is the third week in a row that the overall index has risen.

Earlier this week, the USA announced the automobile tariffs, which will come into effect on April 2nd, while those on parts will be implemented no later than May 3rd.

These new US tariffs of 25% on automobiles and automobile parts coming into the USA will drive up costs and put enormous pressure on supply chains.

Indeed, the USA import around 8 million cars per year, while US manufacturers are reliant on parts manufactured in other countries, particularly Mexico and Canada.

Around 60% of cars made in the US use imported parts.

As far as airfreight out of Asia is concerned, the Chinese market is experiencing a significant pressure due to increased demand and limited capacity, pushing rates up and leading to operational challenges.

In Beijing, the high demand from major exporters like Apple and Tesla has driven up rates significantly with solid booked capacity.

Shanghai is seeing a rebound in air freight, with e-commerce driving a surge in demand. Capacity is tightening and rates are increasing rapidly.

SEA FREIGHT

Long-term global container trade is expected to grow by 3.6% on average per annum from 2024 to 2028.

With no sign of immediate return to the Suez canal, and a worsening port congestion in Europe, capacity is tied up.

This could disrupt schedules of the ships returning to Asia in next 2 months, which could reduce the available capacity.

Besides, the recent new episodes in the Red Sea crisis predict a still solid supply/demand balance, although less vigorous than during the 2024 peak season, due to the continuation of tonnage deliveries - provided that demand growth continues.

Also, because of geo political instability, the global schedule reliability is at 52%.

In comparison, the historic norm has been at around 75%.