Freight and Logistics News and Market Update

North America

Air

• Airlines across the US canceled over 1300 flights due to the operational impacts of heavy winter weather. This weather disturbance has affected flights and airports across a broad area of the country, with further disruptions anticipated as additional winter storms are forecasted.
• eCommerce is anticipated to continue being the primary catalyst for air cargo volume growth into 2025. In 2024, this sector contributed to double-digit growth in air cargo, and it is expected to maintain its momentum as carriers adjust their networks to meet the increasing demand for capacity. Although regulatory changes and the new Trump Administration could influence growth, the outlook for eCommerce volume remains positive.
• Canadian Prime Minister Justin Trudeau's departure coincides with the anticipated imposition of a 25% tariff on Canadian goods by incoming US President Donald Trump, effective January 20, 2025. The absence of a stable Canadian leadership during this transition may hinder effective negotiations to mitigate these tariffs, potentially disrupting trade flows between the two nations.

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Ocean

• Container carriers are expected to maintain strong financial performance into 2025, supported by high spot rates and sustained demand. Capacity constraints and early peak seasons have tightened supply, leading to higher rates and strained shipper-carrier relationships. A major restructuring of carrier alliances starting in February 2025 is likely to enhance competition and improve service levels in the market.
• Several shipping lines, including CMA CGM, Yang Ming and Hapag-Lloyd, are introducing surcharges of $1,125 to $1,700 USD per FEU ahead of a potential longshore strike on the US East and Gulf coasts starting January 15. These surcharges aim to cover anticipated disruptions and higher handling costs. Spot rates for Asia-to-US shipments have surged, with East Coast rates reaching $6,400 USD per FEU. Other carriers, such as MSC and Zim, are also planning similar surcharges in response to the strike threat and alliance changes.
• In 2024, US West Coast ports saw an increase in import share, driven by labor disputes on the East and Gulf coasts and concerns over tariffs. Despite this gain, rail container backlogs continue to be a problem. As we approach 2025, cargo flows are expected to stabilize, although peak intermodal volumes might strain capacity. The East and Gulf coasts could potentially regain market share due to improved labor stability and geographic benefits. Additionally, changes in trade routes, such as the renewed use of the Suez Canal, might impact the West Coast's share.

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Latin America

Air

• US importers were unprepared for new regulatory changes and tariffs implemented by the Mexican government. Apparel importers expect to be heavily impacted as many of the largest American brands run their fulfillment through Mexican distribution centers and cross-border shipping. This unexpected move aims to protect Mexico's textile industry.
• In 2024, Colombia's air cargo sector ranked among the top in Latin America, driven primarily by agricultural exports and a diverse range of other products. The country is committed to further developing this industry through ongoing investments in logistical infrastructure and a focus on sustainability.

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Ocean

• Starting January 2025, Mexico will enforce stricter customs rules for eCommerce imports, imposing a 19% tax on courier-delivered goods from non-free trade countries like China. The $50 USD de minimis threshold will now only apply to US and Canada imports, while other countries must provide detailed product information to combat tax fraud and smuggling. Mexico's eCommerce market, the second-largest in Latin America, is expected to reach $64.97 billion USD by 2029.

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Asia-Pacific

Air

• In November 2024, Asia-Pacific airlines saw a 10.5% YoY increase in international air cargo demand driven by eCommerce growth, maritime disruptions and preemptive export orders ahead of US tariff hikes. Despite this growth, ongoing supply chain disruptions and global economic uncertainty continue to challenge APAC carriers.
• Boeing's World Air Cargo Forecast anticipates that air cargo volumes between South Asia and East Asia will nearly quadruple over the next two decades, driven by South Asia's expanding manufacturing sector and increasing eCommerce demand. Southeast Asia is projected to experience the fastest growth, with air cargo volumes increasing by over 15% annually until 2030, led by countries such as the Philippines, Vietnam, Thailand and Indonesia.

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Ocean

• Container spot rates from Asia to the US have surged due to a potential labor strike, the early Lunar New Year and tariff concerns. West Coast rates are in the mid $4,000s USD per FEU, while East Coast rates range from the mid $5,000s to low $6,000s USD per FEU. Tight vessel space, overbooked ships and rail congestion are creating logistical challenges, and rates are expected to remain high through January as import volumes continue to rise.

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Ground

• Transport Intelligence founder John Manners-Bell suggests that President Trump's tariff policies may inadvertently bolster China's Belt & Road Initiative by encouraging Chinese manufacturers to relocate production to neighboring Southeast Asian countries. This shift could enhance China's influence in the region through the development of rail networks like the Laos-China railway, which transported 4.22 million tons of freight by 2023. However, political and security challenges may complicate the expansion of these infrastructure projects.

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Europe

Air

• Severe winter storms have caused widespread delays and disruptions across Europe, with several airports in the UK temporarily closing due to heavy snowfall, as they are not accustomed to handling such conditions. Germany also saw cancellations and closures from winter weather, along with a nationwide technical outage that delayed operations for hours.
• Following its takeover of Asiana’s cargo operations, Air Incheon plans to expand its network to Europe and the US. Previously focused on Asia, the carrier will add Brussels and several US destinations to its routes. This integration of Asiana Cargo will add 11 aircraft to Air Incheon’s fleet, making it South Korea’s second largest cargo carrier.

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Ocean

• The EU's FuelEU regulation, effective January 1, mandates ships to reduce greenhouse gas emissions by 2% in 2024 with a target of 80% by 2050. The rule will increase costs for fossil fuel-reliant shipping companies due to rising carbon taxes under the EU Emissions Trading Scheme (ETS). Compliance will require new contracts, data management systems and low-carbon fuels. Non-compliance penalties are expected to exceed ETS costs by 2035, creating both challenges and opportunities for companies aiming to lower emissions.
• Severe port congestion in Asia and Europe due to pre-holiday rushes, bad weather, labor shortages and vessel bunching is causing delays of up to a month on Asia-Europe trade routes. Key ports like Shanghai, Ningbo and Hamburg are experiencing lengthy berthing delays, with intra-Asia services most affected. Equipment shortages in China and Vietnam, along with holiday closures and labor disruptions in European ports such as Rotterdam and Genoa, have further compounded the delays, resulting in multi-week schedule slippages for some vessels.

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India, the Middle East and Africa

Air

• Ethiopian Airlines has launched ET-eCom, an eCommerce-focused airport-to-airport courier service offering guaranteed cargo space, secure handling and better connectivity. The service includes eCOM-Standard for fast imports and exports and eCOM-Lite for services like consolidation, deconsolidation and repacking at its 15,000 sqm facility in Addis Ababa (ADD), which can process 1 million parcels daily. With strong regional presence and logistics capabilities, Ethiopian Airlines is well positioned to meet growing eCommerce demand.
• Emirates SkyCargo has launched a weekly Boeing 777 freighter service from Dubai World Central (DWC) to Copenhagen Airport starting January 1, 2025. The new route brings the airline’s dedicated freighter destinations to 38 and offers 85 tons of capacity for cargo from Copenhagen, Norway and Sweden. In 2024, Emirates saw 20% growth from Denmark, driven by pharmaceutical and medical goods. The airline now operates 38 weekly freighter flights to 11 European destinations, enhancing its network across the region.
• Emirates SkyCargo’s Vice President Trevor Howard highlighted rising risks from improperly packaged dangerous goods in eCommerce shipments, posing safety concerns for cargo handlers and airlines. He emphasized the need for robust screening procedures and improvements to the Know Your Customer (KYC) framework to verify cargo origins, screen shippers and enhance security checks, mitigating potential risks from hazardous shipments.

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Ocean

• Saudi Ports Authority (Mawani) announced a new maritime route connecting King Abdulaziz Port in Dammam, Saudi Arabia, with Umm Qasr Port in Iraq. The route aims to strengthen trade ties between the two countries and improve maritime connectivity, facilitating smoother marine trade within the region.
• India’s Syama Prasad Mookerjee (SMP) Port in Kolkata plans to increase its cargo handling capacity by 50% within five years through public-private partnership projects, with an investment of INR 2,000 crore. The port currently handles 50 million metric tonnes of cargo annually and aims to increase its capacity to 74 million metric tonnes by 2030 through infrastructure upgrades and modernization efforts.
• DP World has begun construction of the Port of Ndayane in Senegal, aiming to modernize the country’s maritime infrastructure and establish it as a major trade hub in West Africa. Phase 1 includes an 840-meter quay and a 5-kilometer channel to accommodate the largest container ships, with an annual capacity of 1.2 million TEUs. Phase 2 will add a 410-meter quay. The project builds on the success of the Port of Dakar and is expected to strengthen Senegal’s position as a key regional trade hub.

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Ground

• Cushman and Wakefield reported that demand for industrial and logistics space in India will reach 50 to 53 million square feet across eight major cities. This growth is driven by the expansion of the engineering and manufacturing sectors, along with rising demand from eCommerce and retail industries.
• Sindi Multimodal Logistics Park is expected to begin operations in early 2025, connecting Indian exports to Bangladesh through riverine routes. The move aims to reduce delays faced by rail and road transport, enhance transit speed and lower transport costs, making Indian exports more competitive in the region.

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Customs Brokerage

• Starting January 1, 2025, tariff rates on certain Chinese tungsten, wafer and polysilicon products will increase, with a 50% duty on specific polysilicon and wafer items and a 25% duty on tungsten products, requiring importers to use specific tariff headings for payment.
• Mexican President Claudia Sheinbaum has implemented a decree, effective December 20, 2024, to protect Mexico's textile and apparel industries by increasing tariffs on certain products and restricting the temporary import of finished goods under the IMMEX program. The decree raises import duties on apparel and textiles and excludes certain finished products from the IMMEX program, impacting supply chains, especially for companies fulfilling US eCommerce orders from Mexico.
• The Biden administration has launched a new Section 301 investigation into China’s practices in the semiconductor industry, which could lead to additional tariffs on Chinese imports. The investigation focuses on China’s efforts to dominate the global semiconductor market using unfair trade practices, such as market share targets and capacity expansion, which may impact critical industries in the US like defense, automotive and medical devices. The investigation will include public comments and hearings, with a final determination expected by late 2025.
• 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 updates to Canada’s unilateral preferential tariff programs. For all details on direct shipping, including exemptions and impact on rules of origins (mainly for apparel products) and transshipment requirements, refer to Customs Notice 24-41.

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