Logistics Market Update February 2025

Logistics Market Update February 2025

Logistics Market Update February 2025

February 2025 Logistics Market Update | Forceget

Monthly Highlights

1.Warehouse Lease Costs Stay High

Despite the slight dip in truckload contract and spot rates after January’s boost, warehouse lease costs remain at elevated levels, impacting long-term storage expenses for businesses.
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2.European Market Sees Supply Chain Adjustments

European shipping lanes are experiencing a shift as congestion eases in some ports, while ongoing geopolitical uncertainties continue to impact trade routes
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3.Freight Capacity Remains Tight

Logistics companies report that ocean and air freight capacity remains tight in key regions, leading to fluctuating rates and occasional shipment delays.
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Key Takeaways

  • Truckload and contract spot rates have declined slightly compared to January.
  • Warehouse lease costs remain high, affecting long-term storage planning.
  • European shipping lanes see ongoing adjustments amid market uncertainties.
  • Capacity challenges persist in ocean and air freight.

Ocean Freight Market Update

Rate Trends and Capacity Adjustments

Freight Rates:
Ocean freight rates remain volatile due to tariff implementations and disruptions in major trade routes. The Shanghai Containerized Freight Index (SCFI) reports significant YoY increases in key lanes:

  • Asia–Europe: Rates surged +130% YoY, driven by continued Red Sea rerouting and capacity shortages.
  • Asia–U.S. West Coast: Increased by +95% YoY, primarily due to pre-Lunar New Year stockpiling and early-year import rush.
  • Asia–South America: Recorded a +110% YoY rise, as tight vessel availability and strong demand kept pressure on rates.

Capacity Outlook:

  • Idle Fleet Levels: Despite disruptions, the idle fleet remains below 0.5%, indicating high utilization rates among carriers.
  • New Vessel Deployments: Major carriers, including Maersk and Hapag-Lloyd, have announced additional sailings to offset delays caused by Red Sea diversions and maintain network stability.

Market-Specific Insights

Asia-Europe

  • Delays & Rising Costs: Rerouting around Africa continues to extend transit times by 12–16 days, further driving up freight costs.
  • Capacity Constraints: Some carriers have suspended new bookings on key Asia–Europe lanes due to ongoing congestion and vessel shortages.

Asia-U.S. West Coast

  • Tariff Impact: Shipments surged ahead of the February tariff adjustments, causing temporary rate spikes and increased demand for premium services.
  • Post-Tariff Trends: Spot rates are showing signs of moderation in late February, though continued port congestion may slow stabilization.

South America

  • Limited Capacity: Ocean freight rates remain 120% higher YoY, with vessel space shortages impacting shipping timelines.
  • Port Congestion: Delays at key Brazilian and Chilean ports persist, increasing overall lead times by an additional 3–5 days.

Environmental and Compliance Developments

EU Emission Trading System (ETS) Expands

  • Carriers now must cover 85% of their emissions under the EU ETS, leading to additional surcharges and rising operational costs in 2025.

IMO 2024 Regulations & Fuel Costs

  • Fuel costs continue to increase due to stricter emissions regulations, pushing freight rates higher, particularly on long-haul routes.

Congestion and Reliability

Global Schedule Reliability

  • Improved slightly to 63%, but supply chain disruptions from the Red Sea crisis and ongoing port congestion continue to challenge transit consistency.

Vessel Delays

  • North Europe & U.S. West Coast ports are seeing delays of 5–8 days, as labor shortages and backlogs exacerbate congestion issues.

Air Freight Updates

Peak Season Performance

Demand Surge

  • Air freight demand remains elevated post-holiday, driven by pharmaceuticals, electronics, and automotive parts.
  • E-commerce shipments continue to surge, particularly on Asia–U.S. and Asia–Europe routes, increasing pressure on available capacity.

Capacity Constraints

  • Aircraft maintenance delays and pilot shortages have further tightened available cargo space, leading to longer lead times for bookings.
  • Freight forwarders report that airlines are prioritizing premium cargo, leaving lower-margin shipments facing extended wait times.

Rate Increases

Europe-bound freight rates climbed 9%, driven by limited space availability and rising fuel surcharges.

Asia–U.S. air freight rates increased by 12% month-over-month, with some lanes experiencing even steeper surges due to demand spikes.

Region-Specific Developments

Asia-Pacific

  • Continued strong demand for semiconductor and electronics shipments is keeping rates elevated across key Asia–U.S. and intra-Asia trade lanes.
  • China’s export growth remains strong, with increased outbound shipments leading to tight capacity and congestion at major hubs like Shanghai Pudong and Hong Kong.

Europe

  • Aerospace and automotive shipments surged, further limiting space for general cargo on major European routes.
  • Congestion at Frankfurt and Amsterdam persists, with customs processing delays adding to extended transit times.

Disruptions and Delays

Weather Events

  • Heavy snowstorms in North America affected air cargo operations, leading to delays at Chicago O’Hare, New York JFK, and Dallas/Fort Worth.
  • Shipments faced delays of up to 36 hours, particularly for perishables and temperature-sensitive cargo.

Geopolitical Tensions

  • Ongoing Middle East conflicts continue to impact flight routes, adding extra fuel costs and longer transit times.
  • Red Sea shipping diversions pushed more cargo to air freight, further straining capacity and driving up rates.

Technological Advancements

Cargo Tracking Systems

  • Increased investment in AI-driven cargo visibility tools, allowing real-time tracking for improved operational efficiency.
  • Machine learning-based predictive analytics are helping airlines optimize capacity allocation and minimize bottlenecks.

Drones for Last-Mile Deliveries

  • More logistics providers are expanding drone delivery pilots, with successful trials in rural and high-demand urban areas.
  • Medical and urgent deliveries lead drone expansion, with regulatory approvals progressing in select markets.

Freight Market and Amazon News

Tariffs and Trade Policy Updates

U.S. Tariffs on Chinese Imports Take Effect

  • The 10% tariff on select Chinese imports, implemented on February 4, 2025, continues to drive supply chain adjustments for U.S. importers.
  • Vietnam, Mexico, and India remain top alternatives, as companies look to diversify sourcing and mitigate rising costs.

Mexican Tariff Policy Impacts Cross-Border Trade

  • Mexico reinforced a 19% tariff on imports from non-trade-agreement countries, affecting Chinese-made goods entering the market.
  • Amazon sellers expanding into Mexico are re-evaluating supply chain strategies and considering regional sourcing solutions.
    Source: The Loadstar

Amazon Marketplace Updates

Amazon Introduces New Seller Incentives for FBA Adoption

  • First-time FBA sellers can now benefit from fee waivers, making it more affordable to use Amazon fulfillment.
  • Reduced placement fees for high-demand products encourage more sellers to utilize Amazon’s logistics network.
    Source: FreightWaves

Amazon Enhances Restocking Capabilities with AI-Driven Features

  • The new AI-powered “Send It Again” tool simplifies the replenishment process, reducing errors and improving inventory turnover.
  • This update is expected to help sellers prevent stockouts and optimize FBA inventory management.
    Source: TechCrunch

Shifts in Freight Demand and Pricing

Container Shipping Rates Experience Sharp Fluctuations

  • Trans-Pacific spot rates jumped 14% as U.S. importers accelerated shipments ahead of potential new tariffs.
  • European container rates remain volatile due to Red Sea disruptions, forcing extended transit times and alternative routing.
    Source: Sino Shopping

Air Cargo Sees Increased Demand Due to Supply Chain Disruptions

  • Port congestion and geopolitical uncertainties have driven shippers toward air freight solutions, significantly raising rates.
  • Carriers are adjusting schedules and adding capacity to meet the growing demand for faster and more reliable shipping options.
    Source: Sino Shipping

Forceget Supply Chain Provider is a leading NVOCC licensed global logistics company that specializes in parcel, air and ocean shipping. With offices in key locations such as the USA, China, Hong Kong, Turkey, Israel and Colombia, we are well-positioned to assist you with all your logistics and brokerage needs, no matter where you are located. We take care of all the complexities of international shipping, allowing you to focus on what you do best – competing in your local market. Additionally, we pride ourselves on being the number one Amazon FBA focused freight forwarder, ensuring that your products are delivered to Amazon warehouses in a timely and cost-effective manner. With Forceget, you can have peace of mind knowing that your global logistics needs are in expert hands.