India and Southeast Asia freight markets adjust to shifting trade

Freight markets across India and the Asia Pacific region are entering a period of adjustment as manufacturing activity, seasonal demand and trade policy developments influence cargo flows across air, ocean and road networks.

According to the March 2026 Asia Pacific freight report by Dimerco, global manufacturing conditions improved at the start of 2026, with the global manufacturing purchasing managers' index rising from 50.4 to 52.4, signalling expansion in industrial output and new orders. Despite the improvement, business confidence remains cautious, suggesting trade flows may recover gradually rather than sharply.

In India, logistics activity is expected to increase as companies accelerate shipments before the close of the financial year in March. Exporters are pushing cargo to complete orders and close accounts before the fiscal deadline, which could lift freight volumes across multiple transport modes. The report notes that disruptions in the Middle East may also affect airspace stability, potentially tightening air cargo capacity on routes linking India with the United States and Europe. Exporters are advised to secure bookings at least two weeks in advance toward the end of March to avoid delays during the year-end rush.

Across the Asia Pacific region, freight demand patterns remain uneven following the Lunar New Year period. In Northeast Asia, renewed demand for electronics, AI servers and semiconductor equipment has tightened air cargo capacity on several routes, while ocean freight rates remain under pressure due to cautious inventory management and abundant vessel supply in the market.

Air cargo demand from Taiwan to the United States remains tight as urgent shipments released after the holiday period continue to move through the market. Regional shipments from Taipei to destinations such as Penang, Singapore, Bangkok and Chennai are also keeping capacity constrained. In South Korea, exports to the United States are expected to tighten further as cargo flows normalise following the holiday period, while shipments to Southeast Asia, particularly Singapore, are facing capacity constraints due to limited freighter space and rising regional demand.

Across mainland China, freight conditions remain mixed as production gradually ramps up after the holiday period. Capacity and rates in North China remain stable, while rates in East China are expected to soften at the beginning of March before strengthening later in the month as factory output increases. In South China, most flight cancellations during the holiday period have been restored, and capacity is sufficient, while Hong Kong is reporting stable price levels even as capacity to Bangkok and Taipei remains tight.

In Southeast Asia, market conditions vary by country as seasonal factors influence freight demand. In Thailand, capacity to the United States West Coast remains tight, and forwarders are recommending bookings at least one week in advance. Previous congestion caused by high inbound e-commerce volumes resulted in delays of several days at airport terminals, although operations have since normalised. In the Philippines, a spillover of post-holiday cargo volumes is expected, with forwarders anticipating backlogs toward the end of March as shippers advance shipments ahead of the Lenten holiday period.

Indonesia is also expected to see tightening logistics conditions ahead of the Idul Fitri holiday in March. Authorities are planning road restrictions for trucks during the holiday period, which could disrupt inland transportation and cargo movements. Meanwhile, Singapore’s freight market is expected to stabilise after softer post-holiday volumes, with air cargo demand projected to recover gradually during the second quarter. In Malaysia and other parts of Southeast Asia, Ramadan is expected to slow logistics operations temporarily as reduced working hours and holiday schedules affect cargo handling and transport activities.

Ocean freight conditions remain mixed across the region. Demand before the Lunar New Year was softer than usual and did not generate the typical seasonal uplift in volumes. As a result, carriers have increased blank sailings between February and March in an attempt to balance supply and demand. Around 125 sailings were cancelled out of 710 scheduled departures, representing about 18 per cent of planned capacity, with a large share on transpacific eastbound routes.

Port congestion and operational disruptions are also affecting several regional gateways. In Vietnam, congestion at Cat Lai Port near Ho Chi Minh City is expected to slow import container processing because of accumulated cargo in yards, with deconsolidation of less-than-container-load shipments taking five to seven days or longer.

Across Australia, air cargo demand continues to grow as Asia Pacific trade flows expand. Passenger belly capacity is gradually recovering, although freighter space remains constrained, keeping spot rates elevated. In the ocean freight sector, rates from Australia have increased following general rate increases and peak season surcharges, while equipment availability for containers and refrigerated units remains tight.

Freight markets across Asia Pacific are navigating a mix of seasonal events, trade policy shifts and changing manufacturing patterns. Logistics operators across the region are monitoring capacity conditions across air, ocean and road networks as cargo flows adjust through the first quarter of the year.