Freight and Logistics News and Market Update

Air

• Trans-Atlantic air cargo rates have surged recently as airlines redirect capacity from Europe to the more profitable Asia-Pacific region, driven by booming eCommerce demand. A reduction in passenger flights has further limited available cargo space, contributing to rates rising over 50% in recent weeks.
• In 2024, eCommerce significantly boosted air cargo demand from Asia-Pacific hubs to North America and Europe, while the non-eCommerce sector experienced more modest growth. Recent announcements from the US and EU have increased scrutiny on eCommerce shipments, a trend expected to continue into 2025. Additionally, the upcoming US administration plans to implement further tariffs on imported goods, particularly from China, which could dampen the growth of eCommerce air cargo volumes from China and other Asia-Pacific markets compared to the previous year.

Ocean

• Maersk anticipates a 5-7% increase in global trade for 2025, primarily driven by robust US demand. However, potential challenges include possible East Coast port strikes, anticipated tariff hikes under President-elect Trump and security threats such as Houthi attacks in the Red Sea, which may lead to increased rerouting costs.
• US President-elect Donald Trump has expressed support for union dockworkers, asserting that automation threatens jobs and emphasizing the importance of investing in workers over machinery. The International Longshoremen's Association (ILA) hopes his backing will prompt employers to reconsider their modernization proposals.
• Starting January 2025, ocean carriers will introduce surcharges to comply with stricter EU emissions regulations, such as the EU Emissions Trading System (ETS) and FuelEU Maritime rules. These charges are designed to offset increased costs from carbon taxes and fuel intensity limits.

Air

• In October 2024, Latin American carriers reported an 18.5% YoY increase in air cargo demand, the highest among all regions, while capacity grew by 5.8%.

Ocean

• Starting January 1, 2025, MSC and CMA CGM will implement new surcharges for transits through the Panama Canal. This move follows the Panama Canal Authority's (ACP) modifications to its transit reservation system, which include changes in tariff structures and the introduction of new fees. Both carriers have set the surcharge at $40 per TEU for all cargo types on services connecting Asia to the US East and Gulf Coasts, aiming to offset the increased costs associated with the ACP's new system.
• Following a large investment from China into the Chancay Megaport in Peru, the United States announced new investment in the modernization of the Port of San Antonio in Chile. The investment will be targeted at improving the port infrasctructure to ensure it will remain a competitive shipping hub in South America for Trans-Pacific trade.

Air

• APAC markets have driven over half (56%) of the global +12% YoY air cargo growth in 2024, with Hong Kong, Dubai and Shanghai leading growth in outbound tonnages. The region’s share of global outbound air cargo has risen to 41%. APAC’s air cargo growth was dominated by general cargo (64%), particularly driven by substantial volumes of eCommerce shipments transported as consolidated cargo, while special cargo, especially high-tech products, made up the remaining 36%. Worldwide air cargo capacity increased by 2% in October, and average rates rose by 12% YoY, with APAC and MESA seeing the highest rate increases.
• APAC airlines saw a 13.4% YoY growth in air cargo demand in October, driven by rising eCommerce in the US and Europe amid ocean shipping capacity limits. Globally, air cargo demand rose 9.8%, with Latin America leading at 18.5%. IATA cautioned about potential disruptions in 2025 due to geopolitical factors, including proposed tariffs under the incoming US administration.
• Ezhou Huahu International Airport, Asia's first all-cargo hub, surpassed 1.2 million metric tons of cargo throughput by December 2024. Operating 83 routes, including 30 international, the airport focuses on air-to-air transfers and aims to rank among the world's top 20 cargo airports. Since opening in 2022, it has attracted over 80 logistics companies.

Ocean

• A pre-Lunar New Year cargo rush and severe weather are causing delays of up to five days at major Asian ports like Shanghai, Ningbo, Tokyo and Manila. Congestion from earlier typhoons and rising volumes is disrupting trade, with delays at European ports like Rotterdam adding to global supply chain challenges.
• Wan Hai Lines will expand its trans-Pacific network in February 2025 by partnering with Ocean Network Express (ONE) on the PS6 service, providing faster connections from China to the US West Coast. To improve transit times, the AP1 service will exclude Shanghai and Ningbo. These adjustments are part of Wan Hai's strategy to strengthen its US operations, which account for 28% of its revenue.
• US retailers are increasing imports to mitigate potential disruptions from labor strikes, new tariffs and the early Lunar New Year. December imports are expected to rise 14.3% year-over-year, with total imports for 2024 projected to increase by 14.8%. This strategy aims to minimize disruptions despite a slight decline in imports in October.

Ground

• ASEAN aims to boost trade by improving transportation networks, including digitalizing ports and expanding rail links like the ASEAN Express cargo rail service. Challenges remain in simplifying customs and reducing bureaucracy. Thailand’s land bridge project seeks to ease Malacca Straits congestion, but experts stress the need for seamless, affordable infrastructure for successful economic integration.

Air

• The Dutch government plans to reduce annual flight movements at Schiphol Airport from 500,000 to 478,000 to decrease noise pollution. KLM and air cargo groups oppose this move, citing economic risks and legal concerns. Schiphol Airport also faces criticism for planned rate hikes and the recent resignation of its head of cargo amid controversy.
• American Airlines Cargo has expanded its operations at London Heathrow Airport by relocating to a new facility that increases its space by 15,000 square feet, totaling 120,000 square feet. This move consolidates their import and export operations into a single location, enhancing efficiency. Additionally, the company has implemented digital advancements by integrating its iCargo platform with Worldwide Flight Services' CargoSpot system, further streamlining processes.

Ocean

• Ocean Network Express (ONE) will launch three new North Europe Transatlantic services in February 2025, in partnership with CMA CGM, COSCO, OOCL and Evergreen. These services will connect North Europe with the East Coast and Gulf regions of North America, covering 14 direct ports. Additionally, ONE and HMM will collaborate on a North Europe-USWC service.

Air

• Qatar Airways Cargo has launched the Digital Lounge portal, enabling seamless online bookings for interline partners with instant confirmations. The portal eliminates manual email exchanges and offers features like tracking, tracing and handling multiple shipment dimensions, driving digitalization and enhancing customer experience in the cargo industry.
• Thai Airways has appointed Globe Air Cargo India as its GSSA for Bengaluru and Cochin, enhancing cargo operations with 15 tons and 2.5 tons capacity, respectively. Globe Air Cargo, handling 40% of India’s exports, will streamline transport for key goods like pharmaceuticals, perishables and automotive parts.

Ocean

• Khalifa Port and CMA CGM have inaugurated a new container terminal in Abu Dhabi, resulting from a joint venture between AD Ports Group and CMA CGM Terminals with an investment of USD 845 million. This expansion increases Khalifa Port's annual container capacity by 23% to 10 million TEUs, boosting efficiency. Equipped with rail connectivity, the port is further positioned as a major trade hub in the Middle East.
• India’s leading seaports, Paradip and Kandla, have surpassed an impressive milestone of 100 MT cargo handling capacity in the current financial year. The Paradip port has overseen containerized cargo volumes which has increased 123.09% in addition to major commodities like iron ore, pellet, coastal thermal coal, gypsum and flux. Kandla port has handled import commodities like phosphoric acid, liquid chemicals and timber logs and exports commodities like edible oils, salt, sugar and steel coils.
• Sri Lanka's Hambantota Port is set to enhance its coastal shipping network by introducing a feeder service to Colombo. The port has invested $41 million in new equipment, including four quay cranes and thirteen rubber-tyred gantry cranes, boosting its annual container handling capacity to one million TEUs. These cranes feature automation and anti-collision technologies, promoting efficient and safe cargo operations. With this development, Sri Lanka's ports aim for a combined capacity of 10 million TEUs by 2025-2026.

Ground

• dnata Logistics reported that it will be setting up an innovative warehouse in Dubai with an investment of AED 100 million (USD 27 million). The warehouse features a total area of 57,000 square meters and it is equipped to handle 400,000 tons of cargo annually. Equipped with automated storage and retrieval systems (ASRS), automated truck loading and offloading and an AI-driven warehouse management system (WMS), the warehouse aims to improve efficiency. Sustainable features include solar panels, rainwater harvesting and energy-efficient HVAC systems, targeting LEED certification within a year. Completion is scheduled for November 2025.
• LTS Global Solutions, a UK-based supply chain and freight forwarding provider, has opened a new regional headquarters in Delhi, India. This office will serve as a central hub for operations within the subcontinent, providing logistics and freight forwarding services to both existing and new customers across the region. The strategic location of Delhi offers efficient connectivity between major global markets, making it an ideal gateway for trade between Europe, Asia and beyond. This expansion is part of LTS Global Solutions' broader strategy to enhance its global footprint, following the opening of a regional office in Hong Kong earlier this year.
• India’s Uttar Pradesh state is developing multimodal logistics parks (MMLPs), aimed to promote connectivity through integration of different modes of transport, such as road, rail and water. The state government has identified 17,000 acres of land dedicated to logistics projects and will offer subsidies for the companies that are setting up facilities in the state.

• On November 4, 2024, US Customs and Border Protection (CBP), with approval from the Department of Homeland Security, determined that aluminum extrusion products imported from Kingtom Aluminio S.R.L., a Chinese-owned company in the Dominican Republic, were produced using forced labor. CBP's investigation identified several forced labor indicators, including abuse, intimidation, deception, wage withholding, physical and sexual violence, movement restrictions and excessive overtime. The finding applies to various aluminum extrusions and profile products under specific HTSUS subheadings, used in industries such as transportation, construction, furniture and electronics.
• The November 27 Customs Bulletin and Decisions includes proposed revocations and modifications to US Customs and Border Protection (CBP) classification rulings, with comments due by December 27. CBP proposes reclassifying certain forklift attachments, currently categorized as parts under HTSUS 8431.20.00, into new subheadings: snowplow blades to HTSUS 8430.20.00 (duty-free), "Pallet Saver" to HTSUS 7326.90.86 (2.9% duty) and magnetic fork covers to HTSUS 4016.99.60 (2.5% duty). Additionally, CBP suggests reclassifying Cub Cadet utility vehicles from HTSUS 8704.31.0020 (25% duty) as motor vehicles for goods transport to HTSUS 8703.21.01 (2.5% duty), reflecting their design for passenger transport and safety features.
• The US Trade Representative (USTR) has announced increased Section 301 tariffs on certain Chinese imports, including tungsten products, solar wafers and polysilicon, effective January 1, 2025. The tariffs on solar wafers and polysilicon will rise to 50%, while those on specific tungsten products will increase to 25%. USTR argues that these increases are necessary to reduce US reliance on China, protect national security and boost domestic production in industries such as aerospace, defense and medical sectors. Despite opposition from some groups, who argue the tariffs could increase costs and harm US competitiveness, USTR believes the changes will help US manufacturers compete against China’s excess capacity and encourage diversification of supply chains.
• A Goods and Services Tax/Harmonized Sales Tax (GST/HST) exemption is in effect across Canada on grocery and holiday essentials until February 15, 2025. The relief applies to qualifying goods that are delivered to the purchaser and paid for during the relief period. It also applies to qualifying goods imported into Canada via the postal, Courier Low Value Shipment (CLVS) and commercial streams from December 14, 2024, to February 15, 2025. Complete details on this GST/HST relief initiative, including a complete description of the qualifying goods and CBSA administration of the exemption on imports are available at Customs Notice 24-43.
• Canada Post workers have returned to work following a decisive ruling by the Canada Industrial Relations Board (CIRB). Canada Post advises the company will work through the mail and parcel backlog on a first-in, first-out basis. Canada Post also announces on their website that “new commercial volumes will not be accepted into the network until Thursday, December 19” and “delays should be expected through the remainder of 2024 and into January 2025”.