Global Logistics Market Update – Mid‑2025
Introduction & Executive Summary
Resilient Yet Unpredictable: The first half of 2025 has kept logistics professionals on their toes. Global supply chains saw demand stabilize at healthier levels than the pandemic era, but new shocks – from trade wars to shifting alliances – injected fresh volatility. Many forecasts from late 2024 proved only partly accurate: some expectations (e.g. easing freight rates due to new capacity) materialized, while others (e.g. major labor disruptions) did not. This mid-year update reviews January–June 2025 developments, checks which earlier predictions came true (and why or why not), identifies key trends shaping the sector, and evaluates implications for Finnish import-export decision makers. All major transport modes – sea, air, road, and rail – are covered, with comparisons to previous years to give context and gauge forecast accuracy. Visual charts and data tables are included to illustrate freight rate movements and capacity trends. In short, global logistics in H1 2025 can be characterized by:
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Geopolitical turbulence: Trade policy shifts (especially new U.S. tariffs) and ongoing conflicts (Ukraine war, Red Sea insecurity) are influencing routing, costs, and confidence.
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Post-pandemic normalization: Freight volumes continued to grow modestly while rates settled closer to long-term averages, though not without short-term swings. Inventory gluts and cautious consumers also tempered demand surges.
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Shifting supply chains: Companies are diversifying sourcing (e.g. from China to Southeast Asia) and exploring new transport corridors. Nearshoring and “Buy European” trends are emerging responses to uncertainty.
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Capacity & technology: All modes face capacity inflection points – ocean carriers took delivery of mega-ships, airlines restored belly capacity, trucking capacity growth is constrained by driver shortages, and rail is adapting to reduced subsidies. At the same time, digitalization and decarbonization efforts (e.g. electric trucks, greener fuels) continue but face regulatory and cost hurdles.
In the sections below, we delve into each mode’s performance in H1 2025, compare it to past trends, and consider what it means for logistics managers – particularly in Finland, where a small open economy makes logistics decisions especially critical.
Key Global Trends Shaping Logistics in 2025 (H1)
Trade War & Tariffs
A new wave of trade protectionism defined early 2025. The U.S. introduced sweeping import tariffs (a 145% duty on Chinese goods plus a 10% blanket tariff on others), rattling global supply chains. Although a 90-day “pause” on some tariffs was announced in April, uncertainty remains high. This on-off tariff policy caused whiplash in freight bookings – e.g. an initial pause in China–US orders (as importers froze decisions) followed by a rush to ship ahead of possible tariff hikes. The WTO warns a prolonged US–China trade rift could slash global GDP by ~7% long-term. For logistics: this volatility meant front-loading (shipping early to beat tariff deadlines) surged, then ebbed, making demand hard to forecast. Finnish exporters, in particular, face headwinds if tariffs targeting EU goods become reality, as Finland’s government has cautioned.
Post-Pandemic Demand Shifts
Unlike the boom-and-bust of 2020–2022, this year has seen moderate, uneven growth. Global freight volumes in many sectors are up only single digits. For example, air cargo tonnage grew ~4–5% YoY in early 2025– far slower than the double-digit rebounds of 2024, but still positive. Ocean container volumes were steady to slightly up, with some lanes booming (Asia–Latin America volumes +10% in early 2024) and others soft. A key factor has been elevated inventories: U.S. retailers entered 2025 with ~$30 billion in excess stock, dampening new orders. Meanwhile, consumer spending patterns normalized – e.g. Europe’s consumer demand was sluggish, rising only +0.6% QoQ in Q1. Implication: Many 2024 forecasts of a strong demand snapback did not fully materialize; instead we’re seeing a gentle climb (in volumes) paired with caution in ordering and shipping (preventing extreme rate swings).
Supply Chain Diversification
The trend of “China +1” sourcing became reality. Southeast Asia gained a larger share of manufacturing output, as seen in surging exports from Vietnam, Thailand, Indonesia, etc.. In container trade, U.S. imports from ASEAN countries jumped +24% in 2024, far outpacing import growth from China. Ocean carriers redeployed capacity accordingly, and air cargo routes to emerging Asian hubs stayed busy. Simultaneously, nearshoring gained policy support in Europe (e.g. Buy European initiatives) which could keep more intra-European logistics activity. Earlier predictions that companies would rethink supply chains post-COVID have proven true – evidenced by these shifts – but the full payoff (shorter, more resilient chains) remains a work in progress.
Capacity & Rate Dynamics
After two years of turmoil, freight rates in 2025 moved closer to historical norms. Ample new capacity entered some markets, forcing prices down; elsewhere, capacity constraints kept rates elevated. Ocean freight saw the largest influx – the global container fleet grew ~10% in 2024 and more mega-ships were delivered in H1 2025 – which exerted downward pressure on spot rates. Air freight capacity grew ~5% YoY early in the year as passenger bellyhold space finally recovered to pre-pandemic levels. Truck capacity in Europe, however, did not expand – new heavy truck registrations fell 7% QoQ in Q1 and driver shortages persist (426k unfilled positions). Rail capacity along China–Europe routes is in flux: previously subsidized services are being scaled back (China is fast-tracking subsidy cuts) which could reduce available trains. Overall, forecasts of more balanced markets in 2025 have partially come true – but “balance” has come with big regional variations. As we detail next, some modes are dealing with oversupply and falling rates, while others remain tight
Regulation & Sustainability
Environmental and regulatory changes are steadily influencing logistics decisions. In trucking, for example, the push for zero-emission vehicles (battery electric & hydrogen trucks) continues, but EU weight regulations lag behind – the 11.5 tonne axle limit effectively penalizes heavier e-trucks by reducing payload. Lobbying is underway to raise limits (to 12.5t axle and 44t gross) to level the playing field. Meanwhile, the EU’s deadline for a new customs framework by Dec 2025 looms; slow IT rollouts risk delays, sparking calls to accelerate digital customs integration. Carriers and shippers are also adapting to emissions measures – e.g. monitoring the impact of EU’s carbon trading on shipping lines and investing in greener fuels and fleet upgrades. While these trends were foreseen in earlier outlooks, progress has been incremental. For Finnish companies, alignment with EU sustainability and customs modernization is a priority to avoid compliance snags and to meet customer expectations for greener supply chains.
Sea Freight: Turbulent Waters Calming (Somewhat)
Market Developments (Jan–June 2025)
The ocean freight sector started 2025 in a softening cycle. Spot container rates on major lanes, which had already plunged throughout 2023, hit new lows by late winter. The Shanghai Containerized Freight Index (SCFI) in February showed steep declines year-on-year: e.g. Shanghai–North Europe spot down 16%, China–Mediterranean down 5%, and China–US West Coast down 5%. Drewry’s World Container Index (WCI) likewise had fallen ~29% YoY on China–Rotterdam by February. In short, early 2025 saw ocean rates sag to levels not seen since pre-COVID, as a hangover from excess capacity and weakened demand. Carriers responded by aggressively blanking sailings – up 318% on Asia–Med and +449% on Asia–North Europe routes post-Chinese New Year, as one data source predicted – to try and halt the slide. By March, Asia–Europe spot prices dropped below their 2024 floor, ~$2,740/FEU (−14% from early-year levels). Transpacific spot rates likewise fell to ~$2,400/FEU to the U.S. West Coast (about 18% below the prior year’s low). Carriers attempted General Rate Increases (GRIs) in early Q2, but most “did not stick” amid lukewarm demand.
A Surprise Mid-Year Spike
Just when it appeared rates might continuously erode, an external shock reversed the trend in late Q2. The partial easing of U.S. tariffs on Chinese goods in April triggered a wave of restocking and rush shipments on the Transpacific. After an initial collapse when 145% tariffs hit, the pause led to resumption of US-bound traffic. Within weeks, carriers succeeded in pushing through hefty GRIs: by mid-June, Drewry’s composite WCI had shot up 59% in four weeks, reaching $3,543/40ft. Shanghai–New York rates jumped 67% (to ~$7,285) and Shanghai–Los Angeles by 89% in the same short span. This sudden rally broke the pattern of decline that began in January. However, it’s viewed as a short-term correction rather than a sustained boom. Drewry’s latest forecast expects the supply-demand balance to weaken again in 2H 2025, pushing spot rates back down as more new vessels enter service and the tariff front-loading subsides. In essence, earlier predictions of volatile swings in 2025 have been proven correct: trade policy jolts can whipsaw rates in a matter of weeks, underscoring that stability is still elusive.
Capacity & Operational Trends
Fleet capacity is at an all-time high. In 2024 the global container fleet grew ~10.6% (adding ~2.9 million TEU), and this expansion continued into 2025. Notably, Asia–Europe routes saw a 31% surge in deployed capacity last year, as carriers had to deploy more ships to maintain schedules during the Red Sea crisis (longer Cape of Good Hope routing). That bloated capacity resulted in only an +8.8% effective weekly capacity growth on Asia–Europe (much lower than deployed tonnage growth due to longer transit times). Other lanes grew less – e.g. Asia–North America capacity was up just 2.9% in 2024 – meaning vessel supply was tight in Transpacific early in the year. Indeed, U.S. imports from Asia hit a record 21.45 million TEU in 2024, keeping ships full (100% utilization for 9 months straight on Asia–NA lanes). Coming into 2025, carriers maintained minimal idle fleet (~0.6% of capacity idle)to capitalize on any demand. This strategy was a double-edged sword: it delivered great Q4 2024 profits for carriers, but also left no buffer when demand dipped – hence the heavy blank sailings to prop up rates.
Operationally, schedule reliability remained problematic (~50% on-time for many lanes), aggravated by port congestion. European hubs like Antwerp and Bremerhaven saw an alarming share of ships waiting for berth (41% of vessels at Antwerp in April). Disruptions from weather and labor unrest added to delays (storms and strikes in Northern Europe, for instance). On the U.S. East Coast, a feared longshoremen strike in January was averted at the last minute – the ILA and port employers reached a tentative 6-year deal by Jan 8, avoiding a coast-wide shutdown. This dodged a major risk that earlier market updates had flagged. Still, labor and infrastructure remain watchpoints; any renewed turmoil could quickly tighten capacity and lift rates.
Comparisons & Forecast Accuracy
It’s instructive to compare the current market to both last year and pre-pandemic norms. Mid-2024 was itself a volatile time (Red Sea conflict, West Coast port labor talks) which had pushed rates above 2019 levels. By April 2025, amid the tariff-induced lull, Drewry’s WCI composite averaged ~$2,150/FEU – actually down from late 2024 and close to early 2019 pricing. However, the June bounce brought it back over $3,500, roughly double the pre-crisis norm (the WCI hovered around $1,500–$1,800 in 2018–19). Thus, while analysts predicted a continued slide toward historical rates, the reality has been a choppy settling: baseline rates have normalized significantly from the extreme peaks of 2021, but remain 15–25% higher than the 2010s average, with episodic spikes. Most forecasters did anticipate oversupply in 2025 and downward pressure – that did happen in Q1 – but few foresaw the dramatic tariff U-turn and its effect on late-Q2 rates. The lesson for shippers is clear: build flexibility into contracts. Many BCOs are now balancing long-term contracts (taking advantage of lower negotiated annual rates) with spot market play when sudden dips or surges occur. For example, some forwarders were quoting Asia–US West Coast spot rates as low as $2,300/FEU in Feb (well under index levels), rewarding opportunistic buyers. Going forward, capacity management by alliances will be key. The breakup of the 2M Alliance (Maersk-MSC) this year has already led to more chaotic scheduling and competition. If the second half sees global trade slowing (especially if tariffs re-escalate), carriers may lay up ships or consolidate services again to avoid a rate collapse. In summary, earlier predictions of a challenging, carrier-oversupplied 2025 were accurate, but the timeline was disrupted by policy shocks – a reminder that agility trumps static forecasts.
Finnish Perspective
Finnish importers and exporters reliant on ocean freight have benefited from the relative rate relief in early 2025. The cost to ship a 40’ container from Asia to Northern Europe in Q1 was significantly lower than a year ago, easing pressure on import costs. However, the volatility means Finnish firms had to time their bookings wisely – those who shipped during the spring lull enjoyed bargain rates, whereas those caught in the June upswing faced sudden surcharges. Finland’s export industries (like forestry products, machinery) have long transit times to key markets (Asia, Americas), so schedule disruptions are a concern. The continued rerouting of Asia–Europe vessels due to the Red Sea conflict (requiring Cape of Good Hope detours) added ~8–10 days transit; Finnish forwarders have had to adjust lead times accordingly. On the positive side, Baltic and Northern European feeder capacity has been adequate – carriers expanded feeder services to ports like Gothenburg and Hamburg, through which Finnish cargo is transshipped, keeping Finland connected even as direct routes via Russia vanished. It’s worth noting that the collapse of Finland–Russia trade (Russia now <1% of Finland’s foreign trade) means Finnish logistics are fully reoriented westward. In effect, Finland has become even more dependent on ocean corridors via Western Europe. Thus, any congestion at major hubs or new EU–US tariff crossfire (which could slow EU port throughput) will indirectly hit Finnish supply lines. Finnish decision-makers are hedging against these risks by engaging in strategic partnerships with 4PL providers and seeking visibility – e.g. using digital tracking to anticipate delays. With freight rates off their highs, some Finnish companies have also explored longer-term rate agreements for budgeting certainty, but with built-in flexibility given the unpredictable climate. Overall, Finland’s maritime logistics outlook is improved from the cost standpoint versus 2021–22, but vigilance is required to navigate the ups and downs ahead.
Visual – Global Container Freight Rate Index: Below is a chart of the Drewry World Container Index (WCI) composite, illustrating the steep drop from late 2024 into early 2025, followed by the rebound in May–June 2025 (notably on US-bound routes). This encapsulates the sea freight rollercoaster of H1 2025:
Air Freight: High Altitude, but Clouds Forming
Market Developments (Jan–June 2025)
The air cargo sector entered 2025 with strong momentum but signs of leveling off. In January, industry figures showed global air cargo demand (CTKs) still growing 3.2% YoY – a far cry from the double-digit surge a year prior, yet a record high volume for the month in absolute terms. This trend continued with March 2025 CTKs up 4.4% YoY, marking a historic high for Marchi. Essentially, air freight demand has fully recovered to (or exceeded) pre-pandemic volumes, but the growth rate has normalized to mid-single digits. Geographically, Asia-Pacific carriers led the growth with nearly +10% YoY in March (boosted by booming e-commerce out of Asia), and Europe–North America lanes also showed solid gains (+8.5% YoY). One engine behind H1 demand was the elongated 2024 peak season spillover – consumer electronics and other holiday goods kept moving in high volumes through January, extending the peak into the new year. However, by late Q1, some cooling appeared: February saw a brief dip in tonnages (partly seasonal due to Lunar New Year), and by April/May, certain routes were softening as inventory overhang and economic caution kicked in.
Rates & Yield Trends
Air cargo yields (rates) remain elevated but gradually easing from pandemic peaks. At the start of 2025, air freight prices were higher than a year before on many lanes – e.g. global average rates were ~5% YoY higher in Jan. In mid-February, Middle East–South Asia lanes even saw a +33% YoY jump (due to strong perishables demand and capacity shortages) and Asia-Pacific lanes were +11% YoY. This defied some expectations that air rates would fall; instead, resilient demand and constrained capacity in certain pockets propped them up. By March, as capacity grew, spot rates began to gently slide on key lanes: Freightos data showed China–US air spot rates dipping below $5.00/kg for the first time since the previous summer, while China–Europe stayed ~$3.80/kg and Transatlantic (EU–US) around $2.40/kg. In other words, Asia–US air cargo was the first to show price weakness in 2025, largely due to a policy shock: the suspension of the U.S. de minimis rule for China. This rule change (effective May 3) eliminated duty-free entry for low-value Chinese e-commerce parcels, instantly cutting a swath of small-package air shipments. As predicted, carriers responded by pulling capacity – reports in April noted a growing number of canceled China–US freighter charters. Consequently, transpacific air rates didn’t nosedive; they held steady in the mid-$5/kg range through May, with the capacity reduction offsetting lower volumes. On the other hand, routes like Southeast Asia (Vietnam, Thailand, etc., to US/EU) saw robust demand and retained higher yields, as shippers pivoted sourcing (fulfilling earlier forecasts that SE Asia would benefit from China diversification). By June, overall air cargo pricing was roughly flat or slightly down versus the start of the year, and about 20–30% lower than the extraordinary highs of 2021 – a continued gradual normalization. Notably, contract rates in air freight have been more stable than spot; many shippers locked in moderate rates in late 2024, meaning the spot market fluctuations haven’t translated to wild swings in budgets.
Capacity & Utilization
The global air freight capacity glut of 2020–21 has fully reversed into a more balanced state. Available cargo tonne-kilometers (ACTK) were up ~4–5% year-on-year in Q1, thanks to passenger network recovery. Bellyhold capacity returned especially on international routes: Chinese airlines (Air China, China Eastern, etc.) reinstated widebody flights, and Middle Eastern carriers like Emirates and Qatar added both belly and freighters. By early 2025, belly capacity was essentially back to 2019 levels on most tradelanes, a milestone after years of shortage. All-cargo carriers, meanwhile, adjusted their fleets – e.g. Emirates SkyCargo expanded its freighter fleet by 15% (adding 747Fs and ordering 777Fs), anticipating sustained demand. The net result was a March global cargo load factor around 47.5%, virtually unchanged from a year prior – indicating capacity expansion roughly matched demand growth. Utilization is much lower than the ~60% load factors seen at the height of the pandemic (when capacity was scarce), meaning shippers generally find space readily now. However, bottlenecks persist on certain lanes and periods: for instance, geopolitical events temporarily tightened capacity – e.g. the war risk in the Red Sea caused some carriers to re-route or avoid certain Middle East–Asia segments, and sporadic flight bans/restrictions (like Russia’s overflight bans affecting Europe–Asia routings) introduced inefficiencies. Additionally, fuel prices in early 2025 were down YoY (jet fuel -17% YoY), which helped lower operating costs and, by extension, kept a lid on surcharges. This benign fuel environment was predicted by some and indeed materialized, aiding the stability of airfreight costs.
Predictions vs Reality
Late 2024 predictions for air freight in 2025 were cautiously optimistic – expecting volume growth to slow from 2024’s pace and yields to drift downward as capacity returned. So far, those have largely come true: IATA forecasts a ~0.7% cargo growth for full-year 2025 (after +11% in 2024), and we saw ~+2.4% growth YTD by March, on track for a modest annual gain. Yields are forecast to fall ~5% in 2025; through H1, the trend is roughly in that direction (e.g. March cargo revenue rates +3.8% YoY only because March 2024 had dipped – essentially, rates are hovering slightly below last year’s average on many routes). One prediction that partially missed the mark was the expectation of a strong e-commerce push continuing to buoy air demand. While e-commerce (especially in Asia) is still a driver, the de minimis crackdown and consumer caution led some integrators to scale back. As noted in industry commentary, certain carriers slashed chartered freighter schedules for e-commerce compared to previous years – a sign that segment cooled. Another forecast was that inventory restocking cycles might create bursts of air demand; indeed, in Q1 some U.S. and European businesses used air freight to circumvent port disruptions and tariffs, but the large retail inventory overhang meant others paused new orders, dampening what could have been an airfreight upswing. Bottom line: air cargo in H1 2025 has been resilient and profitable, but not booming – a Goldilocks scenario of sorts. This aligns with a “maturing market” notion mentioned in earlier updates: the sector found a new equilibrium after the wild swings of 2020–22.
Finnish Perspective
For Finnish logistics managers, air freight is a niche but vital mode – used for high-value exports (tech, components) and urgent imports. H1 2025 offered some relief: with capacity abundant, Finnish forwarders report that securing cargo space on Europe–Asia or Europe–US routes has been easier and rate levels are far below the crisis peaks. For instance, air rates from Europe to the US were around $3.1–$3.6 per kg in late 2024; they have since stabilized or eased slightly, improving export competitiveness for time-sensitive Finnish goods. One development watched closely is the Asia-Europe air bridge bypassing Russia – Finland traditionally benefited from Asia-Europe flights crossing Siberia (with Helsinki as a transit hub for some Asian carriers). With Russian airspace closed to EU carriers, Finnair and others had to reroute, adding hours and cost. This disadvantage remains in 2025, meaning Finnish importers from Asia sometimes face higher air freight costs (or longer transit) compared to, say, Middle East or Chinese carriers that can still overfly Russia. To mitigate this, Finnish companies are cleverly using hubs like Dubai, Doha, Istanbul – routing cargo from Asia there, then by secondary leg to Finland – leveraging carriers not impacted by the ban. It’s a workaround that earlier forecasts suggested and indeed has become common practice. On the export side, Finland’s specialty products (like medical equipment or niche machinery) moving by air are benefiting from the stable rates and improved reliability; with fewer emergency shipments needed now that ocean lead times are more reliable, Finnish shippers can plan air transports for genuinely critical needs and budget accordingly. One note of caution: if the global trade war deepens, the resulting economic drag could soften demand for Finnish exports (like electronics components) and indirectly lead to air freight overcapacity, possibly giving short-term bargains but long-term instability. Finnish decision-makers thus are keeping an eye on inventory levels and using air freight tactically – e.g. flying goods when currency shifts or tariff changes make timing advantageous. Overall, air logistics for Finland in early 2025 has been characterized by improved service levels, slightly lower costs, and the luxury of choice (multiple airlines/routes), a welcome change after the frenzied air market of two years ago.
Visual – Air Freight Capacity & Volume: The chart below illustrates global air cargo volume and capacity index through H1 2025. Demand (blue line) shows a modest upward trend, while capacity (orange line) has grown in parallel, keeping load factors steady. The gap between 2021’s peak tightness and 2025’s balanced situation is evident, reflecting how the market has normalized:
Source: IATA Economics – Global air cargo demand (CTK) and capacity (ACTK) indexed trends, 2021–Q2 2025. Capacity growth in 2025 kept pace with demand, preventing the extreme rate spikes of prior years.
Road Freight (Europe): Bumpy Road to Stability
Market Developments (Jan–June 2025)
The European road freight market in early 2025 reached a critical turning point – appearing to bottom out after a prolonged post-COVID correction. From the pandemic peak in 2021–22, European road freight spot rates had steadily declined for three years. By Q4 2024 this decline finally slowed, and in Q1 2025 we see essentially flat-to-slightly rising rates year-on-year. According to the Upply–IRU–Ti benchmark, Q1 2025 spot rates were up 1.6% YoY (though ~−3.8% quarter-on-quarter), and contract rates up 0.4% YoY. In index terms, the spot index stood at 134.1 and contract index at 131.1 (base 100 = 2017), both a touch above Q1 2024 levels. In practical terms, this means spot prices are about 34% higher than 2017 and ~15% above pre-pandemic 2019 – a significant structural increase – but have come down from the peak of ~140+ in 2022. Key point: The market found a floor in late 2024 and early 2025. Weak freight demand across Europe (due to soft consumer spending and industrial output) prevented any big rate surge, but rising costs put a floor under how low rates could go. By spring, sentiment was that the price war was largely over; many observers expect relatively stable or gently rising truck rates in H2 as economic recovery gradually picks up.
Demand & Volume
Freight volumes on European roads were lackluster in H1. Consumer goods haulage was subdued – Eurostat reported only +0.6% QoQ growth in consumer spending in Q1, which translated to very little additional freight demand. International manufacturing trade also hit headwinds from global uncertainty (with German exports, for example, sluggish). Additionally, the tariff war jitters led to cautious inventories in Europe, so road freight volumes remained below 2019 in many corridors. The IRU notes “the start of 2025 kept down freight rates as consumer demand remains subdued… and the world engages in a trade war”, creating reduced pressure on trucking capacity. Some lanes did better: e.g. freight between France and Germany saw slight rate upticks, reflecting pockets of resilience. Conversely, UK–EU lanes were weak – Q4 data showed France–UK and UK–France routes had sharp rate drops (−6% to −8%), likely persisting into Q1 as Brexit trade frictions and weaker UK economy cut volumes. In the spot market, seasonality played out normally – a quiet January, a small March bounce for Easter season, etc. Unlike 2022’s wild swings, 2025’s seasonal peaks/troughs have been relatively mild, indicating a return to a more predictable cycle (as some analysts predicted would happen by now).
Costs and Capacity
The cost drivers in European road freight have been mixed in H1 2025. Fuel prices – a major component – trended favorably: diesel was down year-on-year and, after a brief +4.8% uptick in Jan/Feb (vs Q4) due to winter factors, it fell through the spring. By April, Brent crude hit a four-year low (~$63/barrel) partly because the trade war dampened oil demand. Lower diesel eased pressure on carriers’ operating costs and likely contributed to the slight drop in contract rates QoQ. Labor costs, however, continue to climb. Europe’s persistent driver shortage (426k vacancies) forced wages up ~5%+ YoY in many markets. For example, new collective agreements in Italy gave truckers >€500/month raises in 2025, and Spain reported +5.1% YoY driver pay hikes. These wage increases, while improving the job’s appeal, raise carriers’ cost base and set a floor under rates – a reason many expect rates will not fall much further. On the capacity side, Europe is not adding much new trucking capacity. Q1 saw a 16% YoY drop in new heavy truck registrations, meaning fleet growth is stalled. Some smaller carriers exited during the past year’s downturn, and those remaining are hesitant to invest until margins improve. One interesting trend: zero-emission trucks (ZEV) are making inroads – albeit from a low base. Battery-electric truck registrations grew +51% YoY, now ~3.5% of new trucks. This is a positive for long-term sustainability, but in the short term, such trucks often have lower payloads (due to weight limits) and limited range, so their impact on available tonnage is minor. Still, it shows the road freight sector is slowly progressing on decarbonization, something predicted in previous years and gradually coming true (though calls for regulatory support, like higher weight allowances for e-trucks, remain unresolved).
Forecast Check & Trends
Many industry watchers forecasted that European road freight rates would stabilize in 2025 after the post-COVID correction, and that appears to be happening. The expectation that “weak demand and high costs will keep rates range-bound” has been borne out: demand hasn’t recovered enough to drive a big rate spike, but costs (wages, fuel until recently, tolls) and capacity limits prevented any collapse. One medium-term trend is nearshoring and regional trade – some anticipated that as global supply chains shorten (due to geopolitical tensions), intra-Europe trucking demand would rise. There is anecdotal evidence of this: certain industries (e.g. textiles, electronics assembly) have shifted some production to Eastern Europe/Turkey, potentially increasing regional trucking needs. It’s still early, but a “Buy European” sentiment is noted, which could boost dedicated contract trucking as companies favor local suppliers. On the regulatory front, upcoming changes like Germany’s road toll increase (linked to CO₂ emissions) and the EU’s mobility package enforcement are factors to watch; these were known and their impacts (slightly higher operating costs, changes in cabotage rules) are unfolding now. So far, none of these have dramatically altered market rates, but they underline that compliance and efficiency are critical for carriers to maintain margins. A final note: road freight remains vulnerable to external shocks – e.g., if the war in Ukraine escalated or an energy crisis re-emerged, it could swing diesel prices or re-route flows overnight. Fortunately, H1 2025 had no such shocks beyond the tariff issue. As one analyst put it, “European demand was already weak and the tariff uncertainty led many to expect lower road freight volumes… we expect fairly stable rates for the rest of the year. That sentiment aligns with reality to date.
Finnish Perspective
Finland’s domestic and international road transport mirrors the European trend, with some unique wrinkles. Domestic Finnish trucking has been dealing with high fuel costs and a driver shortage, though the recent fuel price dip offered respite. Internationally, Finnish exporters trucking goods to continental Europe (often via Baltic ferry routes) benefited from the stabilized freight rates – the cost to send a trailer from Finland to Germany or the Netherlands in early 2025 is slightly down from 2024’s highs, aiding export competitiveness. However, the loss of the Russian market still leaves a gap for some hauliers; before 2022, a significant volume of Finnish transit trucking involved Russia (e.g. Eastbound deliveries to St. Petersburg). That essentially vanished due to sanctions, and alternative business has only partially filled the void. On the positive side, EU funding and focus on the North Sea–Baltic corridor infrastructure continue, which in coming years should improve road/rail links from Finland southward – a strategic development Finnish logistics planners anticipated and are keenly following. Finnish forwarders also report that cross-border trucking into Sweden, Norway, and the Baltics is smooth, with new digital customs tools reducing paperwork (Finland is at the forefront of e-CMR and digital TIR adoption). A concern among Finnish shippers is capacity for peak seasons: during the summer and year-end peak, will there be enough trucks/trailers available, given the driver shortage? So far in 2025, capacity has sufficed, but any uptick in demand could strain it. Thus, many Finnish companies are securing long-term contracts with reliable carriers (even if spot rates are currently low) to guarantee capacity when needed – a strategic move underlined by the current market calm. Looking ahead, Finland’s push for green transport aligns with EU trends – e.g. trials of electric trucks for short-haul and discussions about biofuel usage for longer haul. Finnish logistics heads realize that by late 2025, compliance with EU emission rules (and eventual road charging based on CO₂) will be crucial, so they are gradually upgrading fleets and collaborating with 4PL partners to optimize routes (reducing empty runs, etc.). In summary, Finnish road logistics in H1 2025 enjoyed a relatively stable period, absorbing global shocks (tariffs) without major disruption, and is using this time to prepare for future challenges (labor, sustainability, infrastructure).
Visual – European Road Freight Rates: The table below summarizes the European road freight rate index for Q1 2025 compared to last year, illustrating the stabilization: contract and spot indices are slightly above Q1 2024, after having declined from their 2022 peak. This confirms the trend that was anticipated – a plateau in the rate cycle.
Source: IRU/Ti/Upply European Road Freight Benchmark. Indices show slight YoY increases in Q1 2025, indicating a market that has bottomed out and begun to stabilize.
Rail Freight: New Routes, New Challenges
Market Developments (Jan–June 2025)
The rail freight sector – especially in the Eurasian context – experienced both opportunities and setbacks in early 2025. On the Europe–Asia corridor, 2024 had seen a remarkable comeback for China–Europe rail volumes (after two weak years), driven largely by ocean shipping disruptions (e.g. the Red Sea crisis). Westbound rail volumes in 2024 soared +80% YoY to ~330,700 TEU, reaching levels near the peak of Belt-and-Road enthusiasm. This momentum carried into early 2025, but with a caution: much of rail’s resurgence was circumstantial (high ocean rates and geopolitical re-routing). By spring 2025, those circumstances were changing – ocean freight rates had fallen back, and some shippers shifted back to cheaper sea transit, potentially denting rail growth. Moreover, China announced cuts to rail subsidies. After years of heavy subsidization to promote the China-Europe Railway (which made rail rates artificially low), Beijing is pulling back support to ease financial strains. Industry experts warned this could “skyrocket” rail costs in Europe, undermining rail’s price advantage just as ocean shipping becomes affordable again. Forwarders braced for significant rate hikes on rail routes once subsidies are lifted. In effect, a key prediction – that rail’s competitiveness would wane if ocean markets normalized – appears to be coming true in 2025. We may see rail volumes plateau or decline later this year as a result.
Within Europe, rail freight had a mix of infrastructure and policy developments. In Ukraine, rail remains a lifeline for exports amid Black Sea port blockades. Ukrainian Railways implemented a hefty 37% tariff increase in January (its first since 2022) to fund urgent maintenance, given war damage and higher operating costs. While necessary, this made an already tough logistics situation costlier for Ukraine’s shippers. Still, with seaports constrained, rail carried the burden, albeit hampered by technical issues like incompatible track gauges at borders. Elsewhere, France saw a historic shift: the state-owned freight operator Fret SNCF was officially dissolved, replaced by two new entities (Hexafret for operations and Technis for locomotive maintenance). This was essentially an EU-mandated restructuring (after concerns of illegal state aid). Early reports indicate Hexafret is focusing on wagon-load services domestically; while it inherited SNCF’s network, questions remain about its financial viability without ongoing subsidies. In Estonia, the government sold its rail freight company (Operail) to a private consortium in early 2025. With volumes down sharply due to the loss of Russia transit, the new owners aim to revitalize container traffic and shift freight off roads to meet climate goals. This privatization reflects a broader European trend of seeking private investment to boost rail efficiency as public budgets tighten. The UK rail freight sector had some good news: in late 2024, volumes rose (e.g. +4% YoY in intermodal traffic) as initiatives like new inland rail routes paid off. However, even the UK faced setbacks – severe flooding on New Year’s Day 2025 submerged tracks in Northwest England, causing widespread service disruptions. This highlighted rail’s vulnerability to extreme weather; the European Commission subsequently stressed urgency in climate-proofing transport infrastructure, including rail lines.
Capacity and Routes
Capacity on the Eurasian rail network in H1 2025 was in flux. On the main Northern Corridor (via Russia/Belarus), volumes remain far below pre-war levels, as many western shippers avoid that route. Instead, traffic shifted to the Middle Corridor (Trans-Caspian via Central Asia, Caucasus, Turkey). Countries like Turkey and Kazakhstan invested heavily to upgrade rail links and attract Chinese cargo diverting from Russia. By Feb 2025, Turkey was touting itself as the key link between Asia and Europe, expecting more volume through its rails as geopolitical shifts favor routes that bypass Russia. While these alternative routes have grown, they still face challenges (multiple border transshipments, limited capacity on ferries across the Caspian, etc.). The big unknown is how much China-Europe rail will be used if ocean shipping remains cheap and reliable – rail’s value proposition is speed (roughly 15-18 days vs 30-40 by sea) but at a higher cost. If that cost gap widens due to subsidy removal and lower sea rates, many shippers of non-urgent goods may revert to ocean. However, for certain products (automotive parts, electronics under tight supply chains), rail is likely to remain in use for time-sensitive deliveries, albeit potentially at lower volume. Within Europe, rail freight capacity is constrained by network issues (legacy infrastructure, congestion on key routes). The EU’s push to shift more freight from road to rail (to meet climate targets) is ongoing – initiatives like TEN-T core network upgrades and cross-border corridor improvements are funded, but progress is slow. Some bright spots: new intermodal terminals and better port connections (like Rotterdam investing in rail capacity) are coming online. Yet, operationally, rail is still less flexible than trucking, and strikes or delays can have system-wide impacts. In H1 2025, Europe didn’t see major rail strikes (unlike some past years), so operations were relatively stable aside from isolated weather events.
Comparisons & Outlook
To put things in perspective, Europe–Asia rail volumes in 2025 are still only a few hundred thousand TEU annually – a small fraction of ocean volumes (Asia–Europe by sea is ~26 million TEU a year). Even at its 2021 peak, rail was ~4% of that volume. The surge in late 2024 showed rail can scale up when needed, but it also underscored limitations: for example, eastbound flows (Europe to China) in 2024 actually hit a historic low (~49k TEU, −27%), highlighting an imbalance (China exports far more by rail than it imports back). China has set targets to improve this balance (aiming for 45% eastbound share by 2025 by promoting exports from Europe), but those remain aspirational. Earlier predictions that Red Sea disruptions would give rail a temporary boost were spot on – and indeed, if the Red Sea/Suez situation stabilizes (which as of mid-2025 it has begun to, with more carriers returning to the Suez route under increased security), rail could “hit the buffers” (lose momentum) as one industry commentary warned. We are essentially at that juncture: rail providers are trying to retain shippers by emphasizing reliability and speed, but must now possibly raise prices. Another earlier forecast was that new commodities would take to rail – e.g. automobiles. This happened: Chinese vehicle exports by rail jumped (31k TEU in 2024, nearly 9.5% of westbound rail volumes). It’s a trend likely to continue, as long as European demand for EVs and cars from China stays strong. Finally, the political dimension: With the US–China trade war potentially reconfiguring trade flows, Europe finds itself relatively more aligned with China on commerce (as Europe didn’t impose the same tariffs). This could mean more China–Europe rail business in the strategic sense (China eager to strengthen ties via its “Iron Silk Road”). But any such increase might be offset if Europe diversifies away from China due to its own strategic concerns. So the rail outlook is quite complex – a mix of geopolitics, economics, and logistics fundamentals.
Finnish Perspective
Rail freight is a smaller component of Finland’s logistics, but it has unique importance. Historically, Finland had robust rail links with Russia – for instance, Finnish forest products and chemicals would go by rail to Russian markets or to Asia via the Trans-Siberian. Since 2022, those routes are largely closed. Finnish Rail (VR) saw freight volumes plummet when east-west traffic halted. In 2025, Finnish shippers looking east have had to consider alternative paths: one option is shipping by sea to European hubs then rail to Central Asia, but that’s circuitous. There’s interest in the Middle Corridor even for Finland – theoretically, goods could move by sea to a Black Sea port then rail to Central Asia/China, avoiding Russia. However, this is in exploratory stages. Domestically, Finland is investing in rail infrastructure (e.g. the planned Turku–Helsinki high-speed line, though passenger-focused, may free capacity for freight on existing lines). For Finnish importers, especially of Chinese goods, rail hasn’t been a major mode historically (most came via ocean or via Northern Europe). Thus, the China-Europe rail’s status is more of a bellwether for global logistics than a direct lifeline. One area where Finland is directly concerned is the reconstruction of Ukraine: Finnish companies (machinery, building materials) could play a role, and much of that aid/export to Ukraine will likely go by rail/truck through Poland. So the capacity of rail links into Eastern Europe and Ukraine’s network viability are watched closely in Helsinki boardrooms. Also, Finland’s trade with China has to compete with other EU countries for space on those China-Europe trains; if rail rates shoot up due to subsidy cuts, Finland may decide it’s not cost-effective anyway. Finnish logistics planners therefore continue to rely mostly on sea and road, with rail as a future diversification option if political circumstances improve (for instance, a hypothetical reopening of the Trans-Siberian route someday would be very beneficial for Finland, though that is not on the horizon under current geopolitics). In the meantime, Finland is doing what the EU urges – focusing on multimodal connectivity: improving port-rail interfaces (like Vuosaari port rail links) and ensuring that if opportunities for rail freight arise (e.g. new Silk Road spurs through the Baltics), Finnish businesses can tap into them. The bottom line for Finland: rail freight’s mid-2025 situation has limited direct impact, but it’s a space to watch for future strategic leverage in connecting East and West through sustainable means.
Conclusions & Takeaways for Midsummer 2025
As we arrive at Midsummer, the global logistics landscape is marked by both relief and new complexity. Compared to the crises of recent years, supply chains are in better shape – freight rates have come down to earth, capacity is more readily available, and reliability is inching upward. Many earlier predictions for 2025 – such as a cooling of freight markets and a re-balancing of capacity – have proven accurate, offering shippers and forwarders more breathing room. Yet, the first half of 2025 also taught us that “normal” doesn’t mean boring: unexpected events (especially geopolitical moves) can quickly upend the best forecasts.
Key trends shaping logistics right now include: a volatile trade environment (requiring agility in routing and procurement), ongoing shifts in manufacturing locations (demanding flexible, multimodal solutions), and an imperative to embrace digital and green logistics (for efficiency and compliance). For Finnish logistics decision-makers, these global currents translate into very practical advice: stay informed, stay flexible, and plan for multiple scenarios. The Finnish economy’s outlook hinges on global trade flows – the government’s baseline assumes tariff conflicts are short-lived with 1.3% GDP growth, but a protracted trade war could halve that growth. Thus, contingency planning (e.g. alternate sourcing, buffer stocks, diversified transport modes) is not just prudent but necessary.
Looking mode-by-mode, ocean carriers are expected to manage capacity more actively through the second half – we may not see a return to rock-bottom rates if they successfully idle ships to match demand. Air cargo will watch global economic signals; a resolution (or flare-up) of the US–China tariff fight could swing volumes in either direction. For now, a gradual softening of air rates is likely, but no free-fall given structural e-commerce demand. Trucking in Europe should remain in a relatively tight band; shippers might do well to lock in medium-term contracts while rates are favorable, as any demand uptick or fuel rise later in 2025 could edge prices up again. Rail freight faces a pivotal moment – its role as a complementary mode will persist, but its growth story may stall unless service improvements and cost competitiveness are maintained.
In summary, the first half of 2025 offered a mixed report card: earlier forecasts about a “return to normalcy” in logistics were partly right – operational chaos has subsided – but new challenges ensured that logistics managers cannot be complacent. As you enjoy the Midsummer holiday, reflect on how far the industry has come from the upheavals of a couple years ago, and how adapting to change has become second nature in our field. With clarity on trends and a bit of foresight, we can navigate whatever the rest of 2025 brings – be it smooth sailing or surprise storms – and keep supply chains flowing efficiently for Finland and the world.
Hyvää Juhannusta! (Happy Midsummer) – and here’s to a successful second half of 2025 in global logistics.
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