2025 Middle East and Africa Market Update: Key Developments Shaping Logistics

Introduction

As we enter 2025, the Middle East and Africa (MEA) region continues to be a dynamic and evolving market for global logistics. This market update provides a comprehensive overview of the key economic, trade, and transportation developments shaping the logistics landscape in the MEA region. From economic growth projections to new air routes and shipping regulations, we’ll explore the trends logistics professionals need to be aware of to navigate this important market successfully.

Economic Outlook

Several positive economic indicators point to growth and investment opportunities across the MEA region in 2025:

• The South African rand has started the year on a strong note, appreciating 0.6% against the US dollar to trade at 18.7625. This follows a volatile end to 2024 influenced by global economic uncertainties.
• Egypt is accelerating its government IPO program in 2025 to enhance private sector participation in the economy and attract more foreign investment.
• The United Arab Emirates (UAE) aims to expand its network of Comprehensive Economic Partnership Agreements (CEPAs) in 2025 as part of its strategy to reach $1 trillion in non-oil trade by 2030.
• Saudi Arabia’s economy is projected to grow by 3.7% in 2025, driven by robust non-oil sector growth, stable inflation, and strategic investments in renewable energy, smart cities, healthcare, and finance.
• Both Saudi Arabia and the UAE are poised to become significant investors in Africa’s mining sector in 2025, seeking to diversify critical mineral supply chains and reduce reliance on Chinese sources.

These economic developments suggest increased trade activity and potential new logistics demands across the region in the coming year.

Air Freight Developments

The air freight sector in the MEA region is seeing notable changes and expansions:

• Jet fuel prices have increased 4.2% week-over-week and 4.3% month-over-month, reaching $93.20 per barrel at the end of the first week of 2025. However, this represents a 5.9% decrease compared to the previous year.
• Etihad Airways plans to double its flights to Africa and has added Paris to its cargo flight network, expanding connectivity between Europe, the Middle East, and Africa.
• Qatar Airways has resumed flights to Abha International Airport, further enhancing regional air connectivity.
• Emirates is increasing its presence in South Asia with additional flights to Colombo, while also accelerating the deployment of its Airbus A350 fleet on routes to Kuwait and Bahrain. Emirates SkyCargo has also introduced a weekly freighter service to Copenhagen Airport in response to growing demand, particularly for pharmaceutical shipments.

These developments indicate a general expansion of air cargo capacity and routes connecting the MEA region with Europe and Asia, potentially offering more options for freight forwarders and shippers.

Ocean Freight Trends

The ocean freight sector shows mixed performance with some improvements in reliability but ongoing challenges:

Global Schedule Reliability

Global schedule reliability improved to 54.8% in November 2024, an increase of 4.1 percentage points month-over-month. This represents the highest level of reliability in 2024, though it remains 7.0 percentage points lower than the same period in 2023. The average delay for late vessel arrivals improved slightly to 5.41 days, a decrease of 0.43 days from the previous month.

Middle East-Asia Trade Lane

Schedule reliability on the Middle East-Asia trade lane increased by 4.6 percentage points to reach 40.5% in October/November 2024. However, this is still 28.0 percentage points lower than the same period in 2023. The average delay for late vessel arrivals decreased by 0.53 days to 6.08 days.

Middle East-Europe Trade Lane

The Middle East-Europe trade lane saw a slight decrease in schedule reliability, dropping 1.1 percentage points to 55.1% in October/November 2024. This is the lowest figure recorded for this month and 17.1 percentage points lower than the same period in 2023. The average delay for late vessel arrivals increased slightly to 5.86 days.

New Regulations Impacting Shipping

Two significant regulatory changes will affect shipping operations and costs in 2025:

EU Emissions Trading System (ETS) Expansion

Starting January 1, 2025, the EU ETS will expand to cover 70% of emissions, up from the current 40%. This 75% increase in scope, combined with a potential reduction in available ETS allowances, is expected to result in higher ETS surcharges. Industry experts anticipate that the EU ETS surcharge could double compared to 2024 levels.

FuelEU Maritime Regulation

A new regulation called FuelEU Maritime will take effect on January 1, 2025. This regulation focuses on improving the energy efficiency of fuels used by shipping lines and is expected to introduce a new surcharge from carriers.

Chinese New Year Impact

The 2025 Spring Festival, or Chinese New Year, will run from January 28 to February 4, 2025. This eight-day holiday period is likely to cause disruptions to global supply chains, including:

• Blank sailings
• Capacity constraints
• Potential rate increases

We recommend that logistics professionals and shippers plan their shipments well in advance to mitigate challenges during this period.

Conclusion

The Middle East and Africa region continues to present both opportunities and challenges for the logistics industry in 2025. Economic growth in key markets, expanded air freight networks, and improving ocean freight reliability offer positive signs. However, new environmental regulations and potential disruptions from events like Chinese New Year require careful planning and adaptation.

At FreightAmigo, we understand the complexities of navigating the MEA market. Our Digital Logistics Platform is designed to help freight forwarders and shippers adapt to these evolving market conditions. From real-time rate comparisons across multiple modes of transport to automated documentation and 24/7 expert support, we provide the tools and insights needed to optimize your logistics operations in this dynamic region.

Stay informed and stay ahead in the MEA logistics market with FreightAmigo. Contact us today to learn how our Digital Logistics Solution can support your business growth in 2025 and beyond.