Policy-driven changes, unforeseen geopolitical events, shifts and evolving dynamics: The second quarter of 2025 has presented both challenges and opportunities for businesses reliant on efficient global supply chains. In this article, we’ll delve into the key developments that shaped the sea and air freight markets, offering insights into the forces at play and shedding light on their impact.
Forto Logistics Pulse – Q2
For a deeper dive into Q2 2025, you can check out our webinar recording, featuring logistics experts discussing these changes in depth.
Market dynamics in Q2 2025
Sea freight: Tariffs, alliances, and resilient trade
In Q2 2025, the sea freight market was shaped by disruptive forces and structural changes. US tariff announcements were an important factor, causing volatility in rates and capacity, particularly across East-West trade lanes. On top of that, the full rollout of reshaped ocean alliances, such as MSC’s standalone structure and the Gemini Cooperation’s hub-and-spoke model, added complexity to network operations. Despite ongoing geopolitical tensions, container trade remained resilient as many lanes had already adapted to these challenges in the previous months.
Sea freight capacity trend Q2 2025
Capacity trends on East-West trade lanes exhibited short-term volatility. Between late May and early July, weekly capacity on Trans-Pacific Eastbound (TPEB) and Far East Westbound (FEWB) routes saw notable shifts. These changes reflected reactions to US tariff threats and a brief pause agreement from April 14 to July 9. Trans-Pacific lanes initially experienced sharp capacity reductions following a 30-35% volume drop from China, but quickly rebounded with policy clarity. In contrast, Asia-Europe routes remained comparatively stable, though vessel deployment and weekly departure schedules showed increasing pressure.
Sea freight rate trends Q2 2025
Rate trends also reflected this tariff-driven volatility. SCFI data highlighted a sharp spike and drop on the TPEB lane: an increase of +USD 3,334 per FEU followed by a fall of USD 3,517 within just 10 weeks. Far East Europe lanes responded with more measured and delayed rate adjustments. North Europe saw gradual increases, while South Europe experienced more pronounced short-term hikes, followed by a correction in July due to reduced volumes for August ETAs.
Do you want to know more about the latest sea freight developments?
Make sure to check out our dedicated FortoBites podcast episode to learn more about the Q2 developments in sea freight, as well as the outlook for Q3.
Air Freight: Geopolitical shocks and shifting demand
The global air freight market in Q2 2025 was a real mix of resilience and volatility. While tariff-driven pre-orders and modal shifts from sea to air sustained demand in several lanes, external shocks, particularly the Israel-Iran conflict, led to severe operational constraints. Route disruptions, rising fuel and insurance costs, and uneven regional demand contributed to an increasingly unpredictable environment. Despite these headwinds, structural trends like sourcing diversification and e-commerce demand continued to shape the long-term trajectory of the sector.
Air freight market growth Q2 2025
Global air cargo market growth was projected at 1.5% year-over-year in Q2, a modest pace after 3% growth in Q1 and an 11% surge in Q1 2024. This indicated a return to more normalized demand patterns. However, with demand softening, the market became more exposed to external shocks such as geopolitical tensions, regulatory changes, or economic uncertainty. Without strong baseline demand, volatility in rates and capacity planning was likely to persist.
Air freight rate development Q2 2025
Rate developments in Q2 reflected this instability. While global average air cargo rates rose by 4% YoY in Q1 and increased 3.9% month-over-month in March, trends varied significantly by region:
- China to North America: Rates declined by 7% to $4.92/kg, slipping below the $5.00 mark for the first time since August 2024.
- China to Europe: Rates fell 13% to $3.14/kg, reflecting soft post-Lunar New Year volumes.
North Europe to North America: Rates held relatively steady, easing by just 1% to $2.35/kg.
Part of the Q1 price strength could be attributed to front-loaded shipments ahead of expected U.S. tariff changes on Chinese imports, artificially inflating volumes and rates early in the year. As this early activity normalized and tariff uncertainty lingered, rates might decline further. However, geopolitical conflicts and operational issues, including understaffed customs offices and GHA (Ground Handling Agent) challenges at several European airports, could inject fresh volatility into rate dynamics and capacity availability.
Underlying global developments
The Israel-Iran conflict heavily impacted air cargo networks. Both nations closed their airspace. Aircraft from Europe to Asia rerouted mid-flight, and airlines scrambled to adjust to the evolving “no-fly zone”. This led to rerouted or returned flights, longer flight times across West Asia, and increased operating costs due to higher fuel consumption, crew hours, and insurance premiums. Some exporters anticipated a potential 50% spike in freight and insurance rates if the crisis persisted beyond a week. This was compounded by rising Brent crude prices, reaching a five-month high of $78/barrel.
Beyond geopolitical risks, operational strain continued to affect European hubs. Staffing shortages remained critical, especially in warehousing teams and customs officers. In Western Europe, the retirement of experienced customs agents created gaps in smaller offices, delaying border processing. Intra-EU border checks, such as at the Germany-Poland border, added trucking delays to first and last-mile segments of air freight.
Do you want to know more about the latest air freight developments?
Make sure to check out our dedicated FortoBites podcast episode to learn more about the Q2 developments in air freight, as well as the outlook for Q3.
Conclusion: Adapting to a Dynamic Landscape
The second quarter of 2025 has been a period of significant adaptation for businesses that rely on global logistics. Tariff uncertainties, evolving shipping alliances, and sudden geopolitical disruptions: All these developments have underscored the critical need for agility and robust risk management strategies. Companies that have successfully navigated this period demonstrated flexibility in their supply chain and a proactive approach to unforeseen challenges.
If you want to navigate these changes with a strong logistics partner by your side, make sure to reach out to us.
