STATE OF INTERNATIONAL FREIGHT (3rd Quarter)

As the Third Quarter 2025 is now on the books it is encouraging to note that the freight team has out paced the 2024 numbers for the same period. This has in large part been driven by stronger margins as we have been involved with more specialized project cargo. Additionally, we have added new customers to our overall matrix.

This has not come without challenges in multiple areas. The primary factor is the application of tariffs and inconsistent economic policy initiatives which appear to change without a developed plan and defined outcome. A secondary factor is the inability for forecast planning for the long term as a result of the changing landscape. This has a greater effect on small and mid-size companies which is the core of our customer base.

International air freight rates have held steady, albeit the lower end of the spectrum, and have been driven by project cargo from major manufacturers as new products have been introduced into the market. Think Apple and continuous upgrading of iphones as an example. The air rates change weekly driven by this phenomenon. As the new products are rolled out the air charter market reacts expanding and contracting ultimately affecting the short term ups and downs. This, in turn, has an effect on capacity in the commercial air market which fluctuates as a result. I highlight the weekly rate movements in Sipping and Shipping to keep you updated in real time.

International ocean freight rates have dropped significantly over the Third Quarter to levels not seen in a decade. This is a clear indication of low demand. Steamship lines looked to implement a GRI (General Rate Increase) for September but the market as a whole rejected that initiative keeping rates at historic low levels. This is especially interesting in light of the fact that 85% of the world's goods move via ocean freight. Traditionally the greater portion of business is driven during Third/Fourth quarters so it will be a barometer of consumer demand and sentiment in the United States. I like to see the glass as half full as opposed to half empty as it is important to seek new opportunities.

In regards to International Small Parcel we recently introduced DHL 4 which has distinct advantages especially in the pricing model. We would like all Partners to take a serious look at their international parcel customer base to determine where you can take advantage of this ultimately driving greater profit. This is an area that, I believe, has distinct advantages that needs a more granular look and, once implemented, will not demand a great deal of administrative activity which is the core model for your business. We are here to assist in the documentation and regulation areas to make this process as seamless and effortless as possible. This is not intended for existing DHL UEX account holders and should be considered for existing Fedex and UPS account holders.