Freight rates: What will we see in 2025?

12 Dec 2024 | Icon Move

The shipping and freight industry has seen large scale volatility since the global pandemic. Freight rates reached record levels – but this was quickly outweighed by a steep decline as we saw normality return. Now, with geopolitical tensions growing, freight rates continue to be difficult to predict. The Red Sea remains off-limits to main shipping lines for the foreseeable future. The resulting longer journey times, huge delays at ports and the knock-on effect on increased demand for storage facilities is all increasing shipment costs.

What does this mean for freight rates in 2025?

Without a crystal ball, it’s hard to predict the future. What we do know is that the situation in the red sea in unlikely to change soon. This means we will likely see higher freight rates than normal continuing throughout the peak seasons (December-January and May-September). As we settle into spring, freight rates may stabilise as the demand lessens. We certainly don’t expect the ‘shock’ hikes we saw in May 2024.

Conversely, some sources predict that shipping rates will decline over 2025 as a result of a “frenzy” of vessel purchasing to increase capacity this year. The resulting overcapacity in 2025 will lead shipping companies to vie for whatever goods they can get to fill their ships.

Despite some uncertainty, we can all agree that freight rates have seen unprecedented destabilisation in the last 4 years. There have been many contributing factors to this that all play a key role. In 2025, we will have the addition of Trump’s planned protectionist tariffs, as well as the ongoing political unrests and international conflicts.

Whatever happens in 2025, we will keep communicating market changes to our clients and assignees and continue to seek the best solutions in the face of challenges.

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