Ocean vs. Air Freight: What SMB Shippers Need to Know for 2025

For importers and exporters, choosing between ocean and air freight has always been a balancing act of cost versus speed: should you choose air and get your goods within a week, or ocean, and wait a month but pay a fraction of the cost?

The 2025 shipping landscape is poised to add further complication to this decision. Between Red Sea disruptions, fast fashion, and possible tariffs, importers and exporters need to weigh ever more factors when choosing their shipping mode. 

So how should you choose your mode in 2025?

Read on to understand the current global forces impacting international shipping, and how to navigate the sea versus air dilemma in the new year.

The Red Sea Crisis continues to impact both air and ocean

Houthi attacks on ships crossing the Suez Canal, which began in late 2023, have caused significant disruptions to global shipping. Widespread rerouting of vessels through longer and less efficient paths has led to:

• Elevated rates on ocean freight: Across the board, ocean rates are higher than before the crisis began. According to Judah Levine, Head of Research at Freightos, prices will not fall below this higher threshold as long as carriers still need to divert shipments to avoid the Suez Canal. In this chart from Freightos Terminal you can see the dramatic change in ocean prices since the start of the crisis:

• Longer transit time on Asia-Europe and Asia-Mediterranean routes: Of course, importers and exporters whose shipments regularly crossed through the Suez Canal are more directly impacted by rerouting. Those shipping from Asia to Europe or the Mediterranean face significantly longer transit times that are further exacerbated by frequent schedule disruptions and port congestion.
• Higher air freight rates: The Red Sea crisis has also caused some shippers to shift from ocean to air freight, particularly for high-value or time-sensitive goods. This shift has contributed to sustained high air cargo rates throughout 2024, with Trans-Pacific rates remaining around $5-$6 per kilogram.

Key Insight: If you ship on affected ocean shipping lanes, you may find air freight a viable alternative despite its cost, especially when reliability is critical.

E-Commerce trends are driving air freight demand

The explosive growth of e-commerce has transformed air freight into an essential mode of transport for certain goods, especially low-value items shipped directly to consumers. Here’s how that affects shipping modes:

• Ocean freight: While ocean freight is still cost-effective for large shipments, it often can’t meet the fast-paced needs of e-commerce platforms. However, some e-commerce businesses are exploring sea-air solutions to balance speed and cost.
• Air freight: E-commerce has highly impacted air freight, especially fast-fashion platforms like Temu and Shein. Such companies both need the speed of air and rely on de minimis exemptions, which allow goods under $800 to enter the US without customs filings and duties. All this volume has contributed to high air freight demand and rates. However, we may see a change in de minimis rules in the coming year, which could significantly affect air cargo demand; more on that in a minute. 

Key Insight: E-commerce businesses relying on air freight should monitor regulatory changes and consider including some ocean freight or sea-air combinations.

Potential tariffs and changes to de minimis requirements

The US election of Donald Trump could mean tariff hikes and changes to de minimis rules, which would significantly impact the freight landscape in 2025.

• Ocean freight: When importers and exporters anticipate higher tariffs, they often front-load their goods – that is, they expedite production and shipping to avoid new duties. This can cause temporary spikes in ocean freight volumes and rates.
• Air freight: If de minimis exemptions are reduced or eliminated, companies relying on air freight would face higher costs and longer processing times to clear more goods through customs. In fact, there are already signs of Chinese exporters building inventory via ocean freight to mitigate risks. 

Key Insight: Shippers should stay informed about policy changes and consider building inventory ahead of tariff rollouts to avoid cost increases.

Trans-shipment hubs add even more complexity to ocean freight

Because carriers and freight forwarders have come to expect the unexpected, they have increasingly utilized trans-shipment hubs. Trans-shipment hubs allow goods to be reloaded onto new vessels to keep them moving to their destination – they offer flexibility that has become crucial given the geopolitical disruptions of the past few years. Here’s how trans-shipment may affect shipping modes in the coming year: 

• Ocean freight: Trans-shipment hubs have become critical for rerouting, especially around the Red Sea. However, they can also introduce delays and scheduling challenges that make ocean freight less predictable. “Longer lead times and the increased reliance on trans-shipment hubs can result in vessel bunching and congestion,” Levine explains.
• Air Freight: Air freight avoids these issues, offering direct and predictable transit times. But air freight costs are, of course, much higher.

Key Insight: If your shipment uses trans-shipment hubs, build buffer times into your schedule or consider air freight for urgent shipments.

Evolving carrier alliances could impact capacity and rates

Ocean carrier alliances are undergoing significant changes, with companies breaking old partnerships and creating new ones. These changes promise to reshape the industry.

• Ocean freight: Many major ocean carriers will be shifting alliances starting in early 2025. For example, the 2M Alliance between MSC and Maersk will end in January, while in February, the Gemini Cooperation, a new alliance between Maersk and Hapag-Lloyd, will be rolled out. These shifts could lead to temporary disruptions and increased competition – which could potentially lower ocean rates.
• Air Freight: Air freight is generally less affected by alliances; other market trends will have more of an impact. 

Key Insight: Importers and exporters should monitor alliance changes and consider using a variety carriers to mitigate risks during carrier alliance transitions.

Ocean vs. air in 2025: actionable tips for SMBs

2025 promises changes that may affect your choice between ocean and air. Here are some actionable tips to keep in mind:

1. Monitor market trends: Stay updated on geopolitical developments, tariff changes, and regulatory shifts, and work closely with your forwarder adapt to changes that arise. Click here to sign up for free weekly updates on global events and how they affect freight.
2. Diversify your shipping modes: With so many factors in the mix, many importers and exporters will benefit from using a combination of air and sea freight. Planning ahead with your forwarder will help balance cost, speed, and reliability.
3. Build inventory strategically: Consider front-loading shipments when possible to avoid tariff hikes or seasonal demand spikes.
4. Plan for the unplanned: More than ever, flexibility is key when it comes to global shipping. Incorporate buffer times into your freight schedules and work on backup plans to ease the effects of unexpected delays.
5. Leverage digital tools: Digital tools can help you stay on top of trends and choose the best shipping options. Here are some great tools offered by Freightos, if we do say so ourselves:
   • The Freightos.com marketplace provides real-time rate comparisons so you can make the best mode decision for every shipment. All providers on the platform are vetted and rated so you can choose partners you trust.  
   • Freightos Terminal offers deep market intelligence on pricing and transit times on your most crucial shipping routes. Check out our Starter Packs for affordable access.

The choice between ocean and air freight isn’t binary; it’s a strategic decision influenced by cost, speed, and reliability. By understanding the nuances of each mode, staying informed about market trends, and using helpful technology, importers and exporters can stay flexible and keep their goods moving.

Want more nitty-gritty details about the 2025 freight forecast? Watch our Global Freight Outlook for 2025 webinar to get an inside look at real data Freightos experts are using to plan for success in the coming year.