2025 Q1 Global Freight Transportation and Logistics Trends

• International Air Cargo demand has grown +13.1% YTD through October 2024, down slightly to first half growth of +14.3%.¹
  
  
• Growth from APAC and Middle East regions remain elevated compared to global figures up +15.3% and +15.0% YoY through October 2024, heavily influenced by eCommerce volume.¹
  
  
• eCommerce is expected to remain the primary driver of demand growth (+14%/year through 2026) moving into 2025 with increased demand for semiconductors (+10-15%) also expected to drive growth with heavy concentrations on APAC shipping hubs.^2,3
  
  
• Implications: Demand growth will continue to limit available capacity with more dramatic effects on heavily trafficked ex-APAC lanes impacted by eCommerce and semiconductor business.

Sources: 1) IATA, 2) Xenata, 3) Loadstar

• Capacity growth has lagged demand through October, up +10.4%, down slightly from +12.2% through first half of 2024.¹
  
  
• Scheduled capacity is expected to decrease -4.7% through the next 10 months (Nov-Aug) with slight growth from widebody belly capacity and a decrease in available freighter capacity.⁵
  
  
• APAC international capacity grew +18.7% through October, slightly outpacing demand from the region.¹
  
  
• Globally, rates have continued to increase over the previous nine months (Mar-Nov), with global rates up +8.7% YoY in November and down -2% YTD.⁴
  
  
• Implications: Carriers are likely to continue shifting capacity to high volume and profitable ex-APAC lanes, providing needed space but not enough to offset demand, further driving targeted rate growth.

Sources: 1) IATA, 4) WorldACD, 5) Accenture Cargo

• Global GDP growth has been revised down with positive updates for US forecasts while China/APAC decreased.⁶
  
  
• Global Manufacturing PMI decreased below neutral in December, marking 6 months at or below neutral to end 2024, with US and European numbers below the 50.0 benchmark over the same period, while China remained slightly above for the three months to end the year.⁷
  
  
• Ongoing conflicts in Ukraine and the Middle East show no signs of near-term resolution and will likely continue to impact trade routes and modality through the first half of 2025 and potentially further.​
  
  
• Implications: GDP forecasts and other economic indicators show a decrease in consumer optimism among the major global economies, potentially leading to market volatility in addition to potential changes brought by the new Trump Administration.

Sources: 6) IHS, 7) S&P

• Shippers contracting with a 3PL for a full-service dedicated trucking solution that includes trucks management, drivers, technology, and management and operating personnel.¹
  
  
• Less-than-truckload (LTL) will see growth from along the US-Mexico border due to nearshoring and reshoring as businesses seek to reduce risk and shorten their supply chain.¹
  
  
• Customers continue to seek lower costs and look to their carrier to help them do so.¹
  
  
• Implications: Shippers seek dedicated solutions to get more control over their supply chain and a migration to private fleets over for-hire truckers will rise.​

Source: 1) Supply Change Xchange

• Increasing demand for 3PL services to manage complex supply chain of pharmaceutical products, medical devices, and medical equipment.²
  
  
• Legislative and regulatory changes supporting pharma growth is a key driver of the market.²
  
  
• Implications: Canada’s healthcare logistics market necessitates a seamless flow and cohesion of freight forwarding services such as warehousing, inventory management and transportation.

Source: 2) Technavio.com

• Critical vulnerabilities in healthcare supply chains have been exposed by events like pandemics and natural disaster.³
  
  
• Healthcare logistics organizations are focusing on building more resilient supply chains using innovative strategies to reduce supply chain risk.³
  
  
• Implications: The healthcare logistics industry seeks to diversify suppliers, incorporate consistency into logistics networks, and use regional distribution hubs to mitigate unexpected disruptions.
  
  

Source: 3) gouspack.com

• President Trump announced that, upon his inauguration on January 20, 2025, he will take immediate action to impose higher tariffs on imports from China, Canada and Mexico. He plans to sign an executive order imposing a 25% tariff on all products from Canada and Mexico until they take measures to stop illegal immigration and drug trafficking into the US.¹
  
  
• Implications: Importers should act now to consider how to avoid, mitigate, or recover the anticipated cost increases should they move forward.
  
  

Source: 1) ST&R

• Under CARM’s current deployment schedule, Release prior to payment (RPP) participants who register will automatically be enrolled in the RPP without posting financial security. Financial security will be mandatory April 19, 2025.²
  
  
• Implications: Importers may need to seek alternative suppliers outside China to avoid the surtax, prompting a shift in sourcing strategies.

Source: 2) CBSA.ca

• On January 1, 2025, the General Preferential Tariff (GPT), the Least Developed Country Tariff (LDCT) and the Commonwealth Caribbean Countries Tariff (CCCT) will change following updates to Canada’s unilateral preferential tariff programs. All details, including exemptions and impact on rules of origins (mainly for apparel products), and on direct shipping and transshipment requirements at Customs Notice 24-41.³
  
  
• Implications: Importers relying on these tariff preference programs will need to adjust their sourcing models to mitigate the potential higher tariffs from countries that have become ineligible to these tariff preference programs.

Source: 3) Customs Notice 24-41

• Mexican President Claudia Sheinbaum has banned the "border-skipping" strategy used by many US ecommerce sellers, where Chinese goods are imported to Mexico and then sent across the border duty-free under Section 321 (de minimis). The decree increases duties on many textile products and excludes certain finished products from the IMMEX program.The changes were announced on December 19 and are effective immediately.⁴
  
  
• Implications: US importers of apparel and textile who fulfill US orders in Mexico should be prepared for higher costs in Mexico.

Source: 4) Freightwaves