Freight and Logistics News and Market Update

Air

• The recent suspension of de minimis exemptions for Section 321 goods from China, Canada and Mexico by the US administration is anticipated to significantly affect air cargo demand and rates. These shipments are often eCommerce goods, and processed de minimis shipments have seen staggering growth over the past year, up over 40% per day YoY in 2024. Shippers, including Chinese eCommerce giants, are considering a number of options, including US warehousing and changes in modality, to negate some of the impacts.
• Air cargo demand continues to outpace capacity, leaving the industry in a bind as carriers grapple with an aging freighter fleet and delays in conversions and deliveries of new aircraft. Capacity is expected to lag behind demand growth in 2025, with the expectation for elevated rates to continue as carrier networks are reworked to provide needed capacity on certain trade lanes.
• Conference Board’s Consumer Confidence Index (CCI) fell by 5.4 pts in January to 104.1. The decline represents consumers' assessment of current business and labor market conditions, as well as their short-term outlook for these conditions and income. The Expectations Index factor of CCI signals a possibility of a recession ahead.

Ocean

• Ocean freight rates are decreasing due to increased competition among alliances, with spot rates on major Asia-Europe and trans-Pacific routes falling significantly since January. The Ocean Alliance dominates crucial trade lanes, while MSC leads in Asia-Mediterranean routes. A price war is developing as carriers struggle to fill capacity amid declining demand. Uncertainty persists regarding the Red Sea crisis, and HSBC forecasts that Suez Canal transits may not return to normal until mid-2025, introducing further volatility.
• MSC has launched iReefer, a real-time monitoring system for perishable cargo with live tracking and temperature control. iReefer Essential is available now for free, while iReefer Pro and Ultimate, with advanced features, will launch on March 1. This system decreases spoilage, boosts security and enhances regulatory compliance.
• The International Longshoremen’s Association (ILA) is launching a month-long initiative to gain member approval for a six-year labor contract with maritime employers, ensuring stability at US East and Gulf Coast ports. The agreement features a 62% wage increase over six years and guarantees minimum staffing for semi-automation. A final vote is expected by late February, with the contract effective in March.

Air

• The peak export season for South American flowers for Valentine’s Day has begun at Ecuador’s Quito airport. The peak shipping season will run through February 8 and expects YoY growth of 3-5% over 2024. The primary destinations are cargo hubs across the US and Europe.
• Argentina has signed a bilateral air connectivity agreement with Turkey, which generates more efficient and flexible routes to Europe, Asia and the Middle East. The new agreement eliminates existing restrictions on frequencies and allows for more flexible routing options and unlimited frequencies on both passenger and cargo flights moving forward.

Ocean

• Newly appointed head of the US Federal Maritime Commission (FMC) is questioning the equitable operation of the Panama Canal by a Hong Kong-based Hutchison Port Holdings. In response, the Panamanian government has begun an audit of the firm’s offices in the country. The FMC is questioning Hutchison’s lack of financial contribution to the government of Panama and expressed worries of further control of the vital waterway by Chinese interests.
• The government of Panama is mulling over the cancellation of its contract with Hong Kong-based Hutchison Ports for the operation of two ports along the Panama Canal. The move comes in response to threats from the new US administration and is part of a set of concessions, including free passage for US warships through the waterway.
• The "China-Europe Express," a direct sea route connecting Ningbo, China, and Wilhelmshaven, Germany, now offers point-to-point service without intermediate stops, cutting shipping time from 45 to 26 days and enhancing trade efficiency for high-value industries like automotive, lithium batteries and solar energy.

Air

• The Chinese government has taken a cautious approach in their response to US tariffs from the new administration. The US announced a 10% tariff on Chinese goods beginning this week, as the administration has been looking into trade relationships with the US’s largest trade partners. Shortly after, the Chinese announced tariffs on around 80 US goods, or roughly $14 billion in US products. Sources state that the restrained response is targeted to preserve relations with the US, as the country finds itself in a somewhat precarious economic situation and has more to lose in an extended trade war with the new administration.
• Global rates for air freight are on the rise as the Lunar New Year holiday approaches. Rates on ex-APAC lanes showed the highest growth with increases of 6% over the previous week. Tonnages are up around 6% over 2024 with rates up 24% over the same period. APAC to US rates showed substantial YoY growth, up +28% YoY, while China-US rates were up just +5% comparably.

Ocean

• Trans-Pacific carriers are quoting 25% higher contract rates for the 2025–26 shipping year to recover last year's losses. Initial offers are $2,500 per FEU for the West Coast and $3,500 for the East Coast. However, uncertainty over Red Sea disruptions, potential Trump tariffs and post-Lunar New Year demand is causing shippers to delay contracts. Experts expect final rates to settle between $2,000 and $2,500 per FEU for the West Coast, with many importers waiting until April to evaluate capacity and pricing trends.
• China has extended Maersk’s cabotage trial to December 31, 2027, adding Lianyungang as a port and easing vessel-sharing regulations with the goal of speeding up domestic import/export cargo transshipment through Shanghai, cutting transit times by approximately two days. Maersk, the sole foreign carrier, has managed over 100,000 TEUs in the pilot program since 2022.
• Gemini Cooperation, led by Maersk and Hapag-Lloyd, is aiming for 90% schedule reliability as a way to lower costs for shippers. Launching February 1, the hub-and-spoke network will reduce port calls and disruptions, enhancing transit consistency. Features include dedicated shuttles, upgraded hubs and efficient mainline loops.

Air

• The European Union is looking to get ahead of any trade of tariff updates from the US government with early engagement on trade negotiations. The European Commission hopes to protect European interests and avoid any disruption on one of the heaviest trafficked trade lanes globally. European representatives hope to focus on areas with the interests of both parties overlap including emerging technologies.
• Hong Kong Air Cargo has announced they will begin a new service to Scotland’s Glasgow Prestwick Airport this month. Beginning on February 10th, Hong Kong Air Cargo will be the first Far East airline operating flights into Glasgow. The move is part of an ongoing network expansion into Europe with routes launched in 2024 to Birmingham, Budapest and Oslo. The carrier is looking to take advantage of ongoing demand growth for eCommerce goods on the APAC—Europe trade lane.

Ocean

• One of the final hurdles for DSV’s takeover of DB Schenker is regulatory approval from the European Commission and the US regulatory bodies. DSV is confident the deal will be finalized by the end of the first half of 2025. The Danish carrier anticipates the full integration of DB Schenker to take about two years following final approval.

Air

• Oman Air Cargo and Nav Aero have partnered together to streamline and improve air cargo operations by developing innovative solutions to customers. The partnership will offer more value-added services including expanded flight networks, schedule flexibility and specialized services with the help of Nav Aero’s connected GSSA network which will ensure comprehensive connectivity to all destinations.
• Ethiopian Cargo reported it will expand its current fleet with the addition of new Boeing B777 freighter to improve its air cargo capacity and cater to growing customer demand. The strategic expansion underscores Ethiopian Cargo’s commitment to serve customers better by expanding its global network.
• Saudia Cargo has reported a strong year of growth in 2024 with its cargo volumes increasing +27% as compared to 2024. The airline has transported 577,870 tons of freight with E-commerce shipments accounting for 64,107 Tons and the high-value shipments comprised +54% of the total volumes. It will further expand its fleet operations, leverage sustainable transportation solutions, invest in Automation and AI-enabled digital infrastructure to improve operational efficiency and accurate cargo tracking.

Ocean

• Saudi Ports Authority (Mawani) has achieved a stellar growth record of 320 million tons cargo throughput in 2024, a +14.4% increase compared to 2023. The port has handled 2.81 million outbound TEUs, which is +8.8% increase compared to 2.58 million TEUs in 2023. Inbound containers totaled to 2.98 million TEUs, a +13.8% increase compared to 2.61 million TEUs in 2023. In December, the port registered a cargo throughput of 27.4 million tons, 9.27% increase compared to 2023. The port aims to improve operational efficiency by leveraging modern technology and infrastructure developments.
• India has reported it will be establishing a $2.9 billion (250 billion rupees) maritime development fund to provide long-term financing for shipbuilding and repair industry. The government will contribute 49% to the fund and the remainder will be raised through public and private partnerships. It will further promote shipbuilding cluster zones for developing ship production capabilities. This initiative is expected to strengthen India’s maritime industry, increase self-reliance and will drive economic growth.
• The Suez Canal Authority (SCA) has requested the major shipping lines including A.P. Moller- Maersk, Mediterranean Shipping Company (MSC) to resume their maritime operations via Egypt’s key waterway as the region returns to a stability. The Red Sea crisis is slowly returning to normal as Yemen Houthis halt attacks; however, major shipping lines still prefer the Cape of Good Hope for Asia to Europe transits due to potential fears of another attack. The disruption of Suez Canal route cost Egypt around USD 7 billion of lost revenues in 2024.

Ground

• Dubai South and Expeditors have announced they will setup a new advanced logistics facility, spanning 23,200 square meters, in Dubai’s southern logistic district to develop new innovative logistics solutions and expand regional footprint to cater ever growing demand for logistics services in the region. The solutions offered will include warehousing and fulfillment services, container freight station (CFS) operations which is set to help position Dubai as a global logistics hub.
• DP World reported the launch of its rail-based multimodal service named SARAL-3, which connects Gandhidham in Gujarat to NCR in New Delhi. The dedicated weekly rail service is equipped with advanced tracking technology offering real-time visibility of freight. With this connectivity, DP world’s new service will offer customers an affordable logistics solution in a dynamic market environment.

• The US has postponed additional tariffs on imports from Canada and Mexico until at least March 1, avoiding their planned implementation on February 4. However, no delay agreement has been reached for China. A revised Executive Order and Federal Register notice are anticipated to confirm the new March 1 implementation date for Canada and Mexico. For China, a 10% tariff will be applied to goods from both China and Hong Kong under HTSUS 9903.01.20, with origin determined by substantial transformation. These tariffs will be in addition to existing duties, including normal tariff rates, Section 301 duties, and any applicable antidumping or countervailing duties (ADD/CVD). For example, a product with an 8% normal duty, a 7.5% Section 301 duty, and a 100% ADD will now face a total duty rate of 125.5% when the additional 10% tariff is applied.
• The USDA Agricultural Marketing Service (AMS) has postponed the implementation of the new user fee structure for Section 8(e) inspections, originally set for January 29, to March 20. This delay allows department officials additional time for review and evaluation in alignment with the President's January 20 memorandum. The rule, published on December 30, 2024, modifies the fee structure for Section 8(e) import inspections by shifting from a per-carlot to a per-pound basis. These changes aim to help AMS more accurately recover the costs associated with inspecting imported fresh fruits, vegetables, and other products.
• Starting February 4, 2025, most Chinese-origin goods, including those from Hong Kong, will no longer qualify for duty-free entry under the de minimis exemption and must be formally entered with applicable tariffs. Shipments filed before the deadline but arriving after will have pre-arrival clearance canceled. Importers must monitor shipments for compliance, as ACE will reject ineligible entries with new error codes. Customs and Border Protection (CBP) advises trade professionals to stay informed, with additional guidance available through the Cargo Systems Messaging Service (CSMS).