Ocean Freight Rates Continue to Fall Amid Softening Demand & Surplus Vessels

Spot and long-term ocean freight rates continue their downward trend, inching ever closer to where they stood before the Red Sea crisis disrupted global trade routes.

Data shows that long-term contract rates on the Transpacific trade are now only about 5% above pre-Red Sea crisis levels (specifically December 1, 2023), and are forecast to drop back to that baseline in the months ahead.

Should that happen, carriers—already grappling with squeezed margins—may respond by tightening capacity, potentially stabilising rates again as demand ebbs and flows.

This rate environment underscores the importance of strategic procurement. Index-linked contracts, which adjust freight costs in line with market movements within agreed thresholds, can protect shippers from overpaying in a falling market while ensuring service continuity during rate surges.

UK-India Trade Deal Opens Doors for UK Exporters

India will cut or remove tariffs on 90% of UK product lines over the next decade, with nearly two-thirds tariff-free immediately and 85% by year ten. In return, the UK will scrap tariffs on almost all Indian imports. The agreement is forecast to boost trade between the two countries by £25.5bn a year, lifting UK exports by almost 60% by 2040.

The deal is especially significant for food and drink, automotive, pharmaceuticals, and aerospace. Whisky tariffs, for example, will fall from 150% to 75% straight away, with further reductions to follow, while UK-made cars will see duties slashed from over 100% to just 10%. Alongside meat, confectionery, soft drinks, and high-value manufactured goods, British brands will now be more competitive than ever in India’s rapidly expanding market, home to over 430 million middle-class consumers.

Simplified customs processes will cut delays and costs, while backhaul rates on sea freight to India mean exports can move more efficiently. Most goods will continue to move via Felixstowe, Southampton, and London Gateway to major Indian ports like Mumbai and Mundra, with typical transit times of 20–30 days, while air freight from Heathrow offers fast-track options in as little as two days.

No Calm in the Red Sea: Shippers Face Prolonged Disruption

In early June, shippers hoped the prolonged and costly detours around the Cape of Good Hope might finally be winding down, after a strategic shift from the Houthis gave pause to Red Sea threats.

But fast forward to September, and the picture remains deeply unsettled. A lethal Israeli strike in late August eliminated the Houthis’ prime minister—Ahmed al-Rahawi—and several key figures, prompting the group to retaliate with maritime aggression and raids on U.N. offices, even as they appointed a hardline successor.

Meanwhile, attacks on commercial vessels—like the sinking of the MV Eternity C, which left crew members killed, kidnapped, or missing—sharpen the risk curve for global shipping.

With mounting violence at sea and no clear de-escalation in sight, the payoff of reverting to Red Sea routes may just be too risky for most carriers—keeping detours around southern Africa all too relevant.

The key question: how long can global trade shoulder these extended routes before carriers, shippers, and supply chains feel an even sharper pinch?

US Tariffs Uncertainty Stirs Global Trade

A US appeals court has ruled that most of Donald Trump’s sweeping “reciprocal” and “Liberation Day” tariffs are unlawful, arguing the president lacked authority to impose such broad measures. However, the duties remain in place until at least mid-October, as the White House seeks to appeal to the Supreme Court.

For global trade, the outcome matters. These tariffs have been shaping shipping patterns and pricing for the past year, with many exporters rerouting goods or absorbing higher costs to maintain US market access. If the Supreme Court upholds the ruling, large sections of the tariff regime could collapse, resetting trade dynamics and potentially reshuffling sourcing and distribution strategies worldwide.

With the US still the world’s largest consumer market, shifts in its trade policy ripple through every major trade lane—from Asia and Europe to Africa—keeping global logistics operators on alert.

India’s Port Upgrades are Game-Changers

India’s ambitious port improvement strategy is set to transform the country’s trade and economy. Investments in modern infrastructure, like the Vizhinjam deepwater port, and policy reforms under the Indian Ports Bill 2025 are boosting efficiency, reducing congestion, and attracting foreign investment.

Special Economic Zones along the coast are also encouraging industrial growth, creating jobs, and speeding up cargo flows. With faster, more reliable ports, India is positioning itself as a major hub in global shipping and a key driver of economic growth.

Airlines Gain as US Tariffs Hit Indian Apparel

As U.S. tariffs bite hard into India’s ready-made garment (RMG) trade, cargo airlines are stepping into the void. With Indian apparel losing competitive ground in key markets, Bangladesh—and to a lesser extent Vietnam—are gaining an edge in the export race.

Cargo carriers have spotted this shift, ramping up freighter services to round out the shortfall as Indian volumes falter. That surge in demand isn’t just about moving goods—it’s reshaping air cargo strategies, routes, and capacity planning across the region.

Did you know:

We have a dedicated team on the ground at London Heathrow to help with your Air Freight queries. Speak to our experts today.

‍