What is the IMO carbon pricing framework and when does it take effect?

In April 2025, the IMO's Marine Environment Protection Committee approved a fuel-standard and carbon-pricing framework scheduled for formal adoption in October 2025 and implementation in 2027. It applies to vessels over 5,000 gross tonnage (responsible for approximately 85% of worldwide fleet emissions). The levy starts at $100-$380 per tonne of excess CO2, incentivizing adoption of cleaner fuels. Supply chain leaders should consider locking in multi-year rates before 2027 to manage cost exposure.

Why is air cargo declining when the overall freight market is growing?

According to the International Air Transport Association, air cargo revenue dropped 4.7% in 2024 and is projected to grow only 0.7% through end of 2025, down from 11.3% in 2024. This contraction is primarily driven by trade measures like tariffs and limited capacity. However, carriers are currently offering spot-rate discounts and extra capacity, making this a favorable window for businesses that rely on air freight for launches or perishables to lock in favorable terms.

What role do freight forwarders and NVOCCs play in controlling international shipping costs?

Freight forwarders manage the full logistics journey and leverage their network to secure base rates and guaranteed capacity allocations that individual shippers cannot obtain alone, especially during peak seasons or port disruptions. The forwarder market is projected to reach $286 billion by 2030. NVOCCs buy ocean capacity and resell it, offering better rates for less-than-container loads (LCL) and fixed sailing schedules while assuming carrier-level liability. Both services help control costs and manage complexity.

What are the hidden cost risks in cross-border e-commerce?

A 2024 Avalara survey found that 75% of shoppers reconsider purchases when customs charges appear after checkout, and almost half refuse delivery if faced with hidden costs. On the business side, 82% of surveyed participants say cross-border compliance complexity limits expansion plans. Solutions like duty calculation automation and post-purchase tracking for 150+ destinations help reduce cart abandonment and operational friction.

How do ocean and air freight compare operationally for 2025?

Ocean freight accounts for approximately 80% of global goods shipped, offers cost-effectiveness and flexibility for large volumes, and provides a 25- to 50-fold CO2 advantage over air. Transit times range from weeks to over a month depending on route complexity. Air shipping is fastest (as few as two days with expedited options) but costs more and faces capacity constraints and tariff impacts. The choice depends on cargo type, urgency, and margin tolerance.

Shipping & Freight

High Impact

Global Freight Shipping Costs Rise: 2025 Trends and Strategy

Oct 23, 2026

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The signal

The global freight shipping market is experiencing structural shifts in 2025 that demand immediate attention from supply chain leaders. The market is projected to reach $40 billion in 2025 with an 11.4% annual growth rate through 2033, driven by expanding cross-border commerce and e-commerce adoption.

However, rising costs stem from multiple pressures: tighter capacity on key ocean lanes, a landmark IMO carbon pricing framework set to take effect in 2027 (with levies ranging from $100-$380 per tonne of excess CO2), and a paradoxical slowdown in air cargo despite overall freight market growth. Air cargo revenue declined 4.7% in 2024 and is expected to grow only 0.7% through 2025, down from 11.3% in 2024, largely due to trade tariffs and capacity constraints.

Supply chain professionals face a critical decision window: locking in multi-year ocean rates before carbon levies activate, repositioning perishable and high-value goods strategies, and investing in transportation management systems (TMSs) to optimize across modes. The regulatory environment is tightening simultaneously with capacity pressures, creating both risk and opportunity for businesses that act proactively.

#international-freight

#cross-border-commerce

#imo-regulations

#transportation-management

#global-logistics

Frequently Asked Questions

What This Means for Your Supply Chain

Simulation Suggestion

this month

What if IMO carbon levies increase effective shipping costs by 8-12% starting in 2027?

Simulate the impact of IMO carbon pricing starting in 2027 on ocean freight costs for major trade lanes (Asia-North America, Europe-Asia, Europe-North America). Assume carriers pass through 60-75% of the levy cost ($100-$380 per tonne CO2) to shippers. Model the scenario across different shipping modes (Full Container Load vs. Less-Than-Container Load) and commodity types. Compare cost impact to current rate locks vs. spot market pricing post-2027.

Run this scenario

Simulation Suggestion

this week

What if air cargo capacity remains constrained and rates spike 15-20% in peak season 2025?

Model demand surge for air freight during Q4 2025 holiday peak assuming capacity remains tight and tariff headwinds persist. Assume air rates increase 15-20% versus baseline. Simulate impact on perishable and high-value goods (apparel, jewelry, electronics) with strict delivery windows. Compare scenarios: locking in spot rates now vs. waiting for potential relief; shifting volume to ocean freight with expedited service; and rerouting via alternative gateways. Analyze margin compression and service level trade-offs.

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Simulation Suggestion

immediate

What if you lock in multi-year ocean rates today versus maintaining flexibility for 2026-2027?

Simulate a rate-locking strategy for ocean freight across major lanes (Asia-North America, Europe-Asia). Model two scenarios: (1) commit to multi-year contracts at current rates to hedge carbon levy risk pre-2027, vs. (2) remain on spot market with flexibility but exposure to cost increases. Vary assumptions: carrier adoption of cleaner fuels (affecting levy passthrough), competitive pricing pressure, demand volatility. Calculate total cost of ownership, cash flow impact, and service level flexibility for each approach across a 3-year horizon.

Run this scenario

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