Freight Market Update

TL;DR: Global Freight Market Update August 2025:

Global container rates are sliding again (-3.3% WoW to US$2,517/FEU; six straight weeks), with the tariff-rush fading, weaker demand, and more blankings; further easing likely into H2-2025 amid new US/EU tariff moves. Intra-Asia fell 13% to US$704/FEU (stabilising near month-end). Australia/NZ buck the trend: spot rates and PSS/RR are rising into peak season; weather/congestion trimming capacity; equipment tight (reefers, 40’ GP). New services: MSC’s direct Oceania–US East Coast “Eagle” weekly starts Feb 2026. Macro: Growth cooling in US/EU/CN; policy divergence keeps trade volatile; AU exports softer on commodity prices; current account deficit wider. Geopolitics: Red Sea attacks, tariff brinkmanship, US–China rivalry, and regional disputes lifting costs, transit times and compliance risk. US market: demand/spot rates down; capacity cuts in play; new fees on Chinese vessels from Oct 2025. Reliability: improving (~67%), but hotspots persist across China, Europe, Africa & ME; cancellations set to rise late Jul–Aug (~7% of sailings, wks 31–35). Sustainability: alt-fuel vessel orders +78% YoY; infrastructure and rules will drive adoption. Airfreight: mid-July volumes softer; rates broadly stable. AU/NZ terminals: mostly 0–2 day delays; isolated industrial/fee changes to watch. Actions: book early for peak, add buffers, diversify routings, re-screen counterparties, and lock critical equipment.

In this freight market update, we see shipping rates are on the slide again, with global demand cooling after the recent tariff-driven rush. And look at what’s behind the drop, how new tariffs and regional disruptions are reshaping global trade, and why Australia is bucking the trend with rising rates and new peak season surcharges. Plus, we’ve got updates on new services, equipment shortages, and what to expect as we head into the back half of 2025.

Rates / Services

Global

Container shipping rates continue to fall (3.3% last week to $2,517 per 40-foot container), marking its sixth consecutive weekly decline in freight market rates, with the recent tariff-driven surge quickly subsiding. As the rush to ship ahead of US tariff increases ends, spot rates on transpacific routes are declining, and more sailings are being cancelled. Forecasts point to continued rate drops through the second half of 2025, influenced by future US tariffs and possible restrictions on Chinese vessels.

Intra-Asia

Intra-Asia container rates fell 13% in early July, down to $704 per 40-foot container and 31% lower year-on-year. Despite softer demand, freight market rates are expected to stabilise by month-end.

Australia

With higher import volumes and peak season nearing, carriers are increasing rates and surcharges for Australia and New Zealand. Spot rates are rising, while weather and congestion are causing delays and reducing capacity.

Major carriers are increasing peak season surcharges and rate restorations for Asia and Middle East shipments to Australia and New Zealand from August 2025. Several lines will also adjust terminal handling charges and apply new tariffs on specific routes

MSC Launches Direct Oceania–US East Coast Service from 2026

From February 2026, MSC will launch a direct weekly Eagle Service between Australia/New Zealand and the US East Coast, with extended links to Europe and the Americas. Key ports include Philadelphia, Savannah, Auckland, Sydney, Melbourne, and Tauranga.

Global Trade Outlook

In the second half of 2025, the US economy is slowing due to tighter policy and rising tariffs, while Europe and China are grappling with weak demand and falling prices. Brazil and Russia are weakening further, but southern Europe is performing relatively well. Central banks are taking different approaches to boost growth, and global trade remains volatile amid ongoing tariff and policy uncertainty. The US Federal Reserve has paused its easing cycle, the ECB has cut rates, and many Asia-Pacific central banks are moving aggressively to stimulate growth.

Global trade volumes rose 6.6% year-on-year in March, driven by front-loaded shipments ahead of new tariffs. However, they fell 1.4% in April, reflecting ongoing volatility in global demand.

Trade Outlook for Australia

Australia’s trade performance has softened due to sluggish global demand for key commodities, leading to weaker export earnings and a widening current account deficit. While direct exposure to US tariff hikes is minimal, Australia remains vulnerable to the global ripple effects of trade tensions, particularly through falling commodity prices and reduced global investment appetite.

Export pressures: Export prices and volumes remained weak over the past year due to declining demand for major commodities like iron ore, coal, and natural gas.
Current account: Australia’s current account deficit rose to 1.9% of GDP in 2024, as export receipts fell and imports increased by 5%.
Tariff exposure: Direct exposure to US tariffs is limited, with the US accounting for just 5% of Australia’s exports, but broader trade tensions are weighing on prices and sentiment.
GDP slowdown: Quarterly GDP growth slowed to 0.2%, missing expectations and marking the first time in nearly seven years that public demand detracted from growth.
Inflation easing: Headline inflation dropped to 2.1% in May, while trimmed mean inflation eased to 2.4%, boosting expectations for further interest rate cuts.
Labour market: Employment remains stable, but job growth is expected to slow, particularly in non-market sectors like health and aged care.

Australian Border Force Cargo Reporting Data

In May 2025, air cargo rose 12% and sea cargo increased 9% year-on-year. Combined, 14 million cargo reports were lodged in June, up 12% from last year.

Geopolitical Issues

Global Trade Uncertain as Trump Tariffs are back on the agenda

Renewed tariffs and short-term trade deals are increasing unpredictability in global markets. The recent EU–US agreement avoided harsher 30% tariffs but imposed a 15% levy, dampening sentiment and raising costs. Exporters and supply chain planners are facing an environment of sudden policy shifts and rising political brinkmanship, making agility essential.

US–China Rivalry Deepens

Tensions are escalating with new trade restrictions, tech controls, and military activities. The US continues to counter China’s influence, while China increases military manoeuvres, especially around Taiwan. These actions, along with China’s expanding nuclear arsenal, heighten risks for miscalculation in the region.

Middle East Conflict Disrupts Global Shipping

Conflict among Iran, Israel, and the US is disrupting key shipping lanes and airspace. Major carriers have suspended or rerouted services, and threats to close the Strait of Hormuz have pushed up shipping and oil costs. Air freight routes are frequently altered, resulting in higher prices, delays, and the need for more flexible logistics.

Cambodia–Thailand Dispute Interrupts Trade Flows

A border dispute has forced closures and rerouting of trade through Vietnam and Laos, leading to cost increases and transit delays for goods moving across Southeast Asia. Although a ceasefire was reached, logistics networks remain strained, highlighting the necessity for diversified supply chain strategies in the region.

India Bans Pakistan’s Trade

India’s ban on Pakistan-origin cargo has led to sharp rises in freight costs and shipping delays of up to 50 days. Crackdowns on disguised shipments and mother vessel rerouting have intensified pressure on Pakistan’s export sector, underscoring how regional tensions are further stressing global supply chains.

Red Sea Update

Houthi militants have resumed attacks on merchant vessels in the Red Sea, sinking two Greek-operated cargo ships—Eternity C and Magic Seas—in July, with crew casualties and captures reported. These assaults, allegedly linked to Israeli port activity, bring the total number of attacks since November 2023 to over 100. Despite some renewed transits through the Suez Canal under discount incentives, major carriers continue rerouting via the Cape of Good Hope due to security concerns. The crisis has sharply increased insurance costs and added 18 million tonnes of CO₂ emissions in 2024, reversing prior gains in maritime carbon reduction.

US Freight Market Update

US Shipping Hits the Brakes Amid Tariff Turbulence

US ocean freight faces falling demand, plunging spot rates, and ongoing tariff uncertainty. A temporary pause on new tariffs until 1 August brought some relief, but front-loaded imports have led to sharp drops in rates—down 60% on the West Coast and 30% on the East Coast in recent weeks. Carriers are reducing capacity to stabilise the market, with August set to be a key period as tariff decisions loom.

CMA CGM Phoenix Joins US Flag Fleet

CMA CGM has reflagged the CMA CGM Phoenix in Charleston, now the largest US-flagged containership at 9,300 TEU. This move supports maritime jobs, cadet training, and national security as part of a $20 billion investment to strengthen the US fleet.

Pentagon to Prioritise Shipbuilding

The US Department of Defense is prioritising shipbuilding, committing $5.9 billion to revitalise the nation’s maritime industrial base. Congress is considering a larger $36.9 billion plan, driven by concerns over China’s rapid shipbuilding growth and the need to restore US sea power.

USTR Update

From October 2025, new US fees on Chinese vessels will increase costs and add regulatory challenges for global shipping.

Tariff Update

The US will add a 10% tariff on UK imports and set 25% reciprocal tariffs for Japanese goods from 1 August. A new US–Vietnam agreement imposes 20% tariffs on many Vietnamese exports, and a US–EU deal establishes a 15% baseline tariff. These changes add further complexity for global shippers.

Shipping Competition

ACCC Approves Silk Logistics Acquisition

The ACCC has approved DP World’s takeover of Silk Logistics, despite industry concerns about reduced competition and higher costs for smaller operators. The deal will expand DP World’s logistics capabilities.

China Cosco Boosts Confidence in CK Hutchison Ports Sale

Investor optimism in CK Hutchison’s $19 billion port sale has increased as China Cosco joins the buyer group, easing political concerns. However, regulatory reviews continue to impact the deal’s timing.

Global Schedule Reliability

Shippers should continue to monitor conditions closely and plan for potential disruptions.

Reliability Improves

Global schedule reliability reached over 67% in June 2025, moving closer to pre-pandemic levels. Leading carriers like Maersk and Hapag-Lloyd are performing well, while the new Gemini Cooperation leads with over 90% reliability. MSC’s standalone network holds steady at 75%. Despite progress, issues like weather and geopolitics require ongoing adaptability and careful planning. South Africa and parts of Oceania show encouraging progress, Europe continues to experience severe bottlenecks, and North Africa and East Africa are facing extended wait times. Weather, infrastructure limitations, and labour constraints remain critical factors affecting global port performance.

While some regions show gains, persistent weather, infrastructure, and labour challenges mean shippers should plan for ongoing disruption.

Global Schedule Hotspots

Port congestion is mixed worldwide.

China: Shanghai, Ningbo, and Shenzhen are facing increased vessel backlogs and equipment issues as peak season nears.
Africa & Middle East: Severe delays persist in Algeria and Zanzibar, while South Africa shows improvement.
UK: London Gateway and Southampton are experiencing delays due to busy lineups and infrastructure issues.
Asia & Oceania: Weather disruptions hit Sydney, Fremantle, and Auckland, but Tauranga and Auckland are stabilising.
Europe: Major hubs like Hamburg and Rotterdam face labour shortages and delays. Southern Europe sees some recovery, but high congestion remains in key ports.

Cancellations

Geopolitical tensions and capacity issues are driving renewed volatility in container shipping rates and demand. While blank sailings dropped sharply in July, they are set to rise again from late July through August, mainly affecting Transpacific, Asia–Europe, and Transatlantic routes. Between Weeks 31–35 (28 July–31 August), 48 blank sailings, 7% of the 713 scheduled, have been announced.

Cancellations are projected to rise over the coming weeks as carriers adjust schedules to manage supply, but most sailings will still proceed. Ongoing market stability will depend on carrier responses and evolving trade policies. Shippers should remain flexible and vigilant.

Australia Cancellations

On the China–Australia trade, June’s data shows 10 blank sailings out of 151 scheduled, reflecting a cancellation rate of 6.6%, a rise from May’s rate, which was just under 5%.

The increase in blank sailings also underscores the ongoing volatility in this trade lane, with implications for schedule reliability and planning for both importers and exporters.

In June, 6.6% of China–Australia sailings were cancelled, up from May, reflecting either softening demand or continued efforts by carriers to manage capacity and stabilise freight rates. This rise highlights ongoing market volatility and the need for importers and exporters to plan for changing schedules.

Sustainability

Reaching net-zero emissions in shipping by 2050 remains challenging due to reliance on fossil fuels and fragmented regulations. In 2025, orders for alternative-fuelled vessels surged 78%, led by container lines, with LNG still dominant but methanol, ammonia, and hydrogen adoption growing. Success will depend on expanding green fuel infrastructure and reducing costs, alongside stricter industry rules and greater investment.

Equipment

Australian exporters are facing equipment shortages, particularly for reefer and 40′ general-purpose containers.

Global Airfreight

Global air cargo demand softened in mid-July, with volumes down 2% week-on-week due to seasonal slowdowns, not tariffs. Asia Pacific to Europe volumes fell, while Asia Pacific to the US saw a modest rebound. Spot rates were mostly stable, with global average rates up 1% week-on-week but still 1% lower year-on-year.

Terminals and Ports

DP World Automation

DP World’s new semi-automated cranes at Fremantle face union backlash over job security, raising the risk of wider industrial action. DP World has introduced OptiBook, a new container booking system at Brisbane, improving efficiency, visibility, and truck utilisation.

Flinders Adelaide Container Terminal Reaches Agreement with MUA

Flinders Adelaide has reached a new enterprise agreement with the MUA, aiming for stable operations and supply chain continuity through 2029.

Fremantle Ports Defends Fee Increases

Fremantle Ports will raise fees from October to support $360 million in upgrades, saying the impact on supply chain costs will be minimal and necessary for growth.

Patrick Terminals

Brisbane: Delays approx. 0 – 1 day
Fremantle: Delays approx. 0 – 1 days
Sydney: Delays approx. 1 – 2 days
Melbourne: Delays approx. 1 – 2 days

DP World Terminals

Brisbane: Delays approx. 0.5 – 1 day – still issues with outages
Fremantle: Delays approx. 0 – 1 days
Sydney: Delays approx. 1 – 2 days
Melbourne: Delays approx. 1 – 2 days

VICT

Melbourne: Delays approx. 0.5 day

Flinders Adelaide Container Terminal (FACT)

Adelaide: Delays approx. 0.5 day

AAT

Brisbane: Working with minimal delays.
Port Kembla: Working with minimal delays.
Melbourne – Appleton Dock: Working with minimal delays.
Melbourne – Webb Dock (formerly MIRRAT): Working with minimal delays.

New Zealand

Auckland: minimal delays, approx. 0.5 – 1 day
Tauranga: minimal delays, approx. 0.5 – 1 days
Napier: minimal delays, approx. 0.5 – 1 day
Lyttleton: minimal delays, approx. 0.5 – 1 day

Magellan Logistics provides freight and logistics services to all industries, including sea freight, air freight, customs clearance, and a digital freight portal, offering 24/7 visibility of all your shipments. Keeping customers informed about changing market conditions is crucial to our approach.

Our dedicated and professional team would be delighted to assist your business. If you have questions about the freight market update, please get in touch with one of our freight specialists or call us at AUS 1800 595 463 or NZ (09) 974 4818.

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About David Thatcher: David, founder of Magellan Logistics, has built a global career in freight forwarding. With international leadership experience and Harvard training, he remains committed to client needs and nurturing his team.

Sources: With thanks to the Freight and Trade Alliance for their freight market update.