TL;DR:
The global freight market is softening again, with the Drewry WCI down 7% WoW to US$2,115/FEU—the first fall after six weeks of gains—driven by weaker US-bound demand post tariff-pause and rising uncertainty. Transpacific spot rates from Shanghai to LA/NYC are down 10–20% (but still ~70–80% above six weeks ago), while Europe-bound rates are up and the Intra-Asia index sits at US$707 (+8% but -27% YoY). Carriers are rolling out broad rate restorations and GRIs into Australia/NZ (typically US$300/TEU, US$600–800/FEU) alongside higher terminal access charges and tighter rules on empty pick-ups. Port congestion remains severe at Shanghai, Ningbo, major EU hubs and key transhipment ports, with blank sailings at ~7% of departures globally and ~10% China–Australia, even as schedule reliability improves to ~56%. Macro indicators (World Bank/OECD) point to weak global growth and sub-3% trade expansion, but Australia is a relative bright spot, albeit with ongoing equipment shortages, especially reefers. Airfreight spot rates are stable around US$2.41/kg with APAC-led growth and capacity still constrained. Shippers should plan for continued volatility: book early around tariff deadlines and peak season, build transit buffers, diversify routings, closely monitor congestion and tariffs, and secure critical equipment and air capacity in advance.The global freight market showed signs of softening in July, with spot rates dipping after a period of sustained increases and volatility. Weaker demand for US-bound cargo and mounting global uncertainties—ranging from tariff shifts to congestion at major ports—are putting downward pressure on rates across key trade lanes. While Europe-bound rates climbed slightly, Asia–Australia lanes are experiencing widespread rate restorations as carriers adjust to market conditions. Continued port disruptions, weak global trade growth, and shifting capacity remain central themes as we enter the second half of 2025.
Freight Market Rates / Rate Restorations
- The Drewry World Container Index (WCI) fell by 7% this week to $2,115 per 40-foot container, marking the first decline in freight market rates in over a month after six consecutive weeks of gains.
- Weaker demand for US-bound cargo, following the end of a temporary pause on higher US tariffs, drove this drop.
- Freight market rates from Shanghai to New York decreased by 10% to $6,584 per 40-foot container; rates to Los Angeles fell by 20%. Despite these falls, both remain up 81% and 73% over the last six weeks, highlighting recent volatility.
- Europe-bound rates increased: Shanghai to Rotterdam rose 12% to $3,171, and Shanghai to Genoa edged up 1% to $4,075 per 40-foot container.
- Analysts expect further downward pressure on spot rates in the second half of 2025, as the supply-demand balance weakens, with US tariff policies and capacity deployment likely to influence rates.
- Drewry’s Intra-Asia Container Index (IACI) rose 8% in early June to $707 per 40ft container but is still 27% below last year, reflecting softer year-on-year rates despite recent gains.
- Port congestion, shifting trade flows, and uncertainty over US tariffs are current drivers of spot rate movements in the region.
For Australia
- COSCO will introduce a rate restoration effective 1 July 2025: USD 300 per TEU and USD 600 per FEU for southbound shipments from Northeast and Southeast Asia to Australia.
- ZIM will apply a Rate Restoration of USD 300 per TEU (dry and reefer) effective 1 July 2025 for exports from Northeast and Southeast Asia to Australia.
- MSC will increase rates by USD 300 per TEU for cargo from China, Hong Kong, Japan, Korea, and Taiwan to Australia and New Zealand, effective 15 July 2025.
- ANL will implement a Rate Restoration of USD 300 per TEU and USD 600 per FEU (dry and reefer) from 15 July 2025 for shipments from Northeast Asia to Australia and New Zealand, in addition to the current Spot/FAK rates and applicable surcharges.
- ANL will introduce a General Rate Increase (GRI) effective 23 July, 2025: USD 400 per TEU and USD 800 per FEU (dry, high cube, and reefer) for shipments from Northeast Asia, Southeast Asia, the Indian Subcontinent, the Middle East, and the Gulf to PNG, Gladstone, and Townsville.
- ANL and CMA CGM, effective 23 June 2025, require a “Required Date (REQD)” for empty container pickup with each export booking to improve container stock management.
- Hutchinson Ports Terminal Access Charges (TAC) increased from June.
Supply / Demand
Supply
Port congestion intensified in June, leading to significant delays at major global container hubs, including wait times of up to 10 days at Rotterdam, Ningbo-Zhoushan, and Cape Town. Yard space in Singapore is nearing capacity, while strikes and low river levels disrupt barge traffic in northern Europe. Chinese ports are under pressure from pre-tariff export surges, and ongoing issues in Durban and Cape Town reflect the broader impact of Red Sea disruptions and poor weather conditions.
Market indicators point to continued weak freight demand. Despite earlier optimism, the rising number of empty container exports from Los Angeles and Long Beach, along with a high number of blank sailings into August, highlights a cautious outlook. Imports to Los Angeles in May fell 25% short of expectations, and labour constraints are already apparent. Until tariff negotiations progress, international trade flows are likely to remain subdued.
Freight rates between Shanghai and Sydney have remained steady for two months, well below the levels at the start of 2025. On the Asia–Europe corridors, rates remain stable despite heavy congestion at transhipment hubs, with North Asia to Northern Europe edging up to USD 2,500/FEU and Mediterranean rates holding at USD 4,400/FEU. Ongoing disruptions continue to delay vessels and extend transit times, with some service adjustments underway. While carriers hint at possible mid-June rate increases, most expect only slight improvements to spot pricing as fleet capacity shifts toward trans-Pacific routes.
Vessel supply continues to grow, but demand remains unpredictable due to geopolitical uncertainty, labour shortages, and front-loading. This is resulting in volatile capacity and operational pressure across global networks as the summer peak approaches. Carriers have managed to ease some disruption through restoring services and redeploying fleets, but persistent tariffs and congestion could challenge even the most resilient networks.
Demand
Ongoing trade tensions and policy uncertainty are slowing global economic growth. The World Bank predicts global GDP will rise just 2.3% in 2025, the slowest non-recession growth since 2008, with most countries facing weaker outlooks. Although a recession is not expected, this is the slowest start to a decade since the 1960s, with developing economies outside of Asia particularly affected. Global trade is expanding at less than 3%, well below historical averages, while higher tariffs and tight labour markets keep inflation elevated.
The OECD also forecasts declining global growth, expecting a drop from 3.3% in 2024 to 2.9% in both 2025 and 2026, including significant slowdowns in the US, China, and Canada. While inflation is easing, price pressures from tariff hikes and supply chain challenges are lingering.
Australia stands out with improving growth projections for the next two years. For the shipping and logistics sector, these global trends signal ongoing weak demand and soft confidence. Recovery potential depends on resolving key trade disputes and renewing international cooperation; however, caution remains the standard for now.
Regional Trade Trends
Asia–Oceania shipping continues to face challenges from excess vessel capacity and weak demand, resulting in steady freight rates. Carriers are managing supply by implementing blank sailings to support rate stability across the trans-Pacific routes. Transatlantic rates have eased following earlier front-loading linked to tariffs, while China–Mediterranean rates remain firm, supported by strong bookings.
Despite slow economic growth in Europe, Asia–Europe container volumes have increased by 17% over the past two years, with recent freight rate increases from Shanghai to Rotterdam and Genoa. Carriers have shifted some capacity out of this market to help maintain or improve rates.
Transpacific volumes surged after the recent tariff pause, but forecasts show only temporary strength. Shippers anticipate steady activity through August, but a significant decline in US container imports is expected in September and October, as uncertainty persists.
Near-Term Freight Market Sentiment
Market optimism has faded in June, with transpacific volumes slowing after last month’s tariff-driven surge. Imports from China to the US are set to decline sharply in September and October. Europe is experiencing ongoing port congestion, with rising geopolitical tensions adding further uncertainty. Falling demand and global risks are making the upcoming peak season outlook unclear.
Key Risks in the Freight Market at Present
- Driven by labour shortages, weather, and geopolitical tensions as peak season approaches, port congestion is increasing delays and costs ahead of peak season.
- Changes in vessel capacity between routes are causing schedule disruptions and reducing service reliability on secondary trades.
- Most key trade negotiations ahead of the upcoming US tariff deadline have stalled, with many exporters potentially facing new tariffs from 9 July.
- Only a few countries have reached agreements, while others are still seeking exemptions or relief, which adds to the overall uncertainty.
Australian Border Force (ABF) Cargo Reporting Data for May 2025 saw year-on-year growth, with both air and sea cargo reporting higher than in 2024:
Sea Freight Market
- Up 4% year-on-year
- Slight decrease compared to April
Air Freight Market
- Up 16% year-on-year.
- Slight increase compared to April
Total Freight Reports (Air + Sea)
- 14million cargo reports lodged in May
- Up 16% year-on-year
Geopolitical Issues
US Freight Market – Latest Tariff Impacts
With the 9 July US tariff deadline approaching, most trade negotiations remain unresolved. Only the UK has secured an agreement, while talks with China, the EU, and other partners face delays and significant issues. Many countries are seeking exemptions or rushing to finalise deals, creating uncertainty for global supply chains.
- All Far East–US West Coast services have been re-instated after a temporary spike in demand due to the 90-day tariff pause, but cargo volumes are now declining.
- May volumes at the Port of Long Beach dropped 8.2% year-on-year, with imports down 13.4% ahead of the tariff deadline.
- China’s exports grew 6.3% in May, though supply chains are continuing to shift towards Southeast Asia.
US / UK Trade Deal
With the 9 July tariff deadline approaching, most US trade partners have yet to finalise agreements, creating uncertainty for global supply chains. Many countries are still negotiating, and businesses are accelerating shipments to avoid potential tariff increases.
Straight of Homuz
Vessel traffic through the Strait of Hormuz dropped in late June due to rising tensions and security concerns, following conflict between Israel and Iran. Daily transits fell well below average as shipowners avoided the area. Despite a ceasefire, the region remains unstable, posing ongoing risks to global energy trade and shipping.
India–Pakistan Relationship
Ongoing tensions between India and Pakistan are disrupting regional trade and supply chains through mutual trade bans. Diplomatic strains have increased following US involvement claims, adding complexity to India–US relations during sensitive trade talks. Both countries are navigating the situation carefully to protect their strategic interests.
Red Sea Shipping Update
The Suez Canal has reopened to large containerships, but most carriers remain cautious due to ongoing security risks and high costs. Many ships continue to divert around the Cape of Good Hope, causing longer journey times and higher expenses. These disruptions are leading to ongoing delays and equipment shortages across global supply chains.
Shipping Competition
- China Cosco Shipping is in talks to join a consortium acquiring Li Ka-shing’s global port assets, including key Panama Canal ports. The deal faces regulatory challenges and uncertainty over completion.
- X-Press Feeders and COSCO have formed a partnership to expand global network coverage and may use joint services to navigate US trade restrictions.
- QVC and Cornerstone filed a $20 million complaint against Ocean Network Express (ONE) for breaching shipping contracts and imposing unjust surcharges, seeking compensation and regulatory action.
Mergers/Acquisitions
The ACCC will announce its decision on the proposed acquisition on 10 July 2025, having delayed the original June timeline to gather additional information.
Schedule Reliability
Global schedule reliability reached a 14-month high in May at 56.3%, with fewer delays and improvements across major trade routes. However, ongoing blank sailings, rerouting, and geopolitical tensions still pose risks to future reliability.
Cancellations – Blank Sailings Decline
Blank sailings are rising across key East–West trade routes, with 7% of scheduled departures cancelled between late June and late July. Most cancellations affect the Transpacific and Asia–Europe lanes. Spot rates have dropped sharply for Transpacific routes, while rates for Asia–Europe routes have increased slightly. Reliability is improving, but capacity and congestion challenges continue.
On the China–Australia route, blank sailings doubled in June to 10%, reflecting continued market volatility and the need for proactive planning.
Global Port Congestion Hotspots
Severe port congestion persists at Shanghai and Ningbo, with over 100 vessels waiting. Antwerp, Hamburg, Rotterdam, Gibraltar, and Singapore remain heavily impacted, while Busan now ranks among the top ten most congested ports.
Equipment
Exports of empty containers from Los Angeles and Long Beach remain low, indicating weak demand and ongoing trade imbalances. Australian exporters are facing equipment shortages, particularly for reefers, and ANL now requires a preferred empty pickup date to be specified at booking.
Enterprise Agreements
There are still no updates from VICT regarding their negotiations with the unions on a new enterprise agreement, leaving the possibility of short-term industrial action unchanged.
Global Air Freight Market
Spot Rates
Global air freight spot rates remain steady at US$2.41/kg, just 1% lower than last year. Asia Pacific rates to the US fell 2% week-on-week, and MESA rates saw the largest annual drop at 22%.
Tonnage
Global air freight volumes were steady, with Asia Pacific posting 2% weekly growth. Shipments from Asia Pacific to the US rose 6%, led by rebounds from China and South Korea. Tonnages in MESA and South Asia fell, while the UAE saw a sharp increase.
Air Freight Market Trends
Market volatility from US–China tariffs is driving airfreight demand, particularly among the e-commerce and tech sectors, as volumes on the Asia–Europe and Transpacific routes return to pre-April levels. China and Hong Kong traffic is close to 2024 peak-season highs. Asia Pacific, led by China, Vietnam, Indonesia, and Taiwan, has driven year-to-date growth. Intra-Asia-Pacific volumes are up 13% YoY, Europe–North America by 8%, and Asia Pacific–North America by 3%.
Capacity
Airfreight capacity remains limited, with demand expected to exceed supply in 2025 due to ongoing delays in aircraft production.
Sustainability
Ocean Network Express (ONE) has introduced a Green Ship Recycling Policy, ensuring that all vessels are recycled at certified, environmentally responsible facilities, ahead of new global regulations set to take effect in 2025. Meanwhile, the shipping industry is preparing for significant changes as the IMO’s upcoming net-zero emissions rules drive investment in clean fuels, technology, and workforce development across the sector.
Terminal and Port Update
Hutchinson Ports Terminal Access Charges (TAC) increased as of last month
Patrick Terminals
- Brisbane: Delays approx. 0 – 1 day
- Fremantle: Delays approx. 0 – 1 days
- Sydney: Delays approx. 1 – 2 days
- Melbourne: Delays approx. 1- 2days
DP World Terminals
- Brisbane: Delays approx. 0.5 – 1 day (Still issues with outages)
- Fremantle: Delays approx. 0 – 1days
- Sydney: Delays approx. 1- 2 days
- Melbourne: Delays approx. 1- 2days
VICT
- Melbourne: Delays approx. 0.5 day
Flinders Adelaide Container Terminal (FACT)
- Note: MUA stop work meeting on 1 July
- 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- 1days
- 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.
