Transports

Asia-Pacific
Medium risk
Central & Eastern Europe
Very high risk
Latin America
High risk
Middle East & Türkiye
Medium risk
North America
High risk
Western Europe
High risk

Summary

Strengths

  • Freight benefiting from the rise in e-commerce
  • Greater efficiency thanks to technological innovations
  • High concentration in the maritime sector
  • Long-term demand for aircraft manufacturers driven by the emergence of the middle classes, notably in Asia

Weaknesses

  • Highly dependent on oil price fluctuations
  • Hit hard by environmental concerns, notably through legislation
  • Vulnerable to climatic events and biological hazards
  • Closely linked to the economic cycle and geopolitical tensions
  • Tight aircraft supply chain
  • High indebtedness due to the sector's capital-intensive nature

Sector risk assessment

Transport sector performances are likely to be uneven in 2025. After showing strong recovery in 2024, the air and sea segments are likely to maintain solid momentum, supported by tight capacity and resilient demand. Overall, transport activity in Europe may see slight improvement from a low base, while it should remain robust in the US. In Asia, continued economic development in emerging markets will boost demand for travel and the strength of the region’s exports should support freight.

Moderate crude oil prices – forecast by Coface at $70-75 per barrel in 2025 – are set to benefit transport companies, particularly airlines, for which fuel represents around 30% of their total costs. However, regulatory shifts toward greener energy would increase costs. The application of the EU’s sustainable fuel directives for aviation and shipping and the further rollout of CO2-based truck tolls in the EU is expected to drive greater investment in fleet upgrades and infrastructure.

Supply chain constraints will persist in aerospace, leading to aircraft delivery delays. This will continue to limit air transport capacity growth. In addition, this will drive higher maintenance costs. By contrast, the shipbuilding industry is expected to remain robust on back of increased capacity in China.

Geopolitical risks will continue to be a major uncertainty. The ceasefire between Israel and Hamas in early 2025 is unlikely to prompt a rapid normalisation in maritime trade as shipping companies will probably be wary about resuming the route through the Suez Canal. This will keep freight rates elevated in the near term. As for the aviation sector, European carriers continue to face longer, costlier routes due to airspace restrictions related to the Russia-Ukraine conflict.

Sector economic insights

Sector Economic Insights

Uneven performance amid modest trade growth

After contracting in 2023, global good trade returned to growth in 2024, having increased by 2.7% in volume. However, the recovery’s effect was uneven across transport segments. Air (both cargo and passenger) and sea rebounded strongly. Coupled with capacity constraints, it supported solid price increases. Road and rail transport turned in a more subdued performance.

In 2025, merchandise trade volumes are expected to grow by 3%, which is below historical growth trends (4% on average over 2000-2019). Risks, notably of tougher trade protectionism policies, could result in slower-than-expected trade expansion.

Regionally, transportation activity may see some improvement in Europe after declining trade flows in 2024 in exports and imports alike. However, weak manufacturing and household consumption trends rule out any major rebound. The European trucking sector, which has been struggling in recent years, should remain under pressure. Despite a possible slowdown in the pace of economic activity, US growth is set to remain upbeat, thus fuelling transport activity. However, this is unlikely to halt the long-term slowdown in rail transportation. In the wake of an average annual drop of 1.6% since 2005, it shrank by 3.2% in 2024. Trump’s return as US President may further harm the trend given his past opposition to public transit and high-speed rail projects. Instead, his willingness to deregulate and weaken environmental requirements may favour more polluting forms of transport, notably trucking. In Asia, freight transport continues to be supported by robust exports, while the continued expansion of the middle classes is poised to boost domestic and regional travel.

Transport businesses are set to benefit from moderate crude oil prices. Coface forecasts an average price of $70-75 per barrel in 2025, down from $80 in 2024. Alongside slower wage growth, this should help contain operating costs. The impact will be particularly significant for airlines for which fuel (mainly kerosene) accounts for around 30% of their total costs. The share may also be high in road transport, which is dominated by micro-enterprises that depend almost exclusively on diesel.

The decrease in fuel costs associated with moderating oil prices may be limited by the energy transition. While environmental regulations have emerged worldwide, new requirements in the EU are pushing the sector further towards costlier alternative fuels. Additional EU countries (e.g., Luxembourg and the Netherlands) are due to implement CO2-based truck tolling in 2025. Meanwhile, the RefuelEU regulation requires a higher share of sustainable aviation fuels (SAFs) for flights within, to, and from the EU as of this year. It also obliges vessels above 5000 gross tonnes calling at European ports to reduce the greenhouse gas intensity of the energy used on board. In addition to higher fuel costs, compliance will mean that significant investments in fleet renewal for carriers will have to be made, as well as infrastructure upgrades at airports and ports.  

Air transport facing persistent supply chain challenges

Air capacity grew in 2024, which helped air transport to reach record levels. Nevertheless, aircraft supply chain challenges restricted the expansion of said capacity. Since the pandemic, original equipment manufacturers (OEMs) have struggled with labour and input shortages, as well as reduced productivity. Simultaneously, aircraft engine suppliers have faced quality and sustainability problems for parts. Down the supply chain, Boeing has continued to struggle with flight incidents, persistent quality control problems and a labour strike. This environment has played a part in aircraft delivery delays. As at the end of 2024, Airbus would need 11.4 years at the 2024 production rate to clear its backlog, while Boeing would require 18.1 years. In addition to curbing capacity growth, these problems are driving up airlines’ costs. Delays in the delivery of aircraft parts and components have increased maintenance costs on back of prolonged downtime and slower fleet renewal. The ageing of aircraft fleets also causes higher fuel consumption.

The situation contrasts with the shipbuilding industry. As for aircraft, order books have grown as a result of increased activity and the need for less polluting vessels. In 2024, shipbuilding orders were the highest in 17 years. In spite of this, the order backlog at leading shipyards remained at three to four years of production, mostly thanks to expanding shipbuilding capacity in China after closed yards reopened. The country dominates the industry, accounting for more than half of vessel output and almost two-thirds of new orders in 2024 (by tonnage). China’s dominance prompted an investigation by the US into Chinese industrial practices. Concluded in early 2025, the investigation found that Chinese subsidies gave the nation's shipbuilding industry unfair advantages, paving the way for possible US tariffs. The impact on the Chinese shipbuilding industry would be negligible as US buyers constitute only a minor share of new orders received.

Geopolitics likely to continue impacting transport

Geopolitics has weighed on transport operations and costs in recent years. Air transport has been impacted by Russia’s invasion of Ukraine, prompting EU and UK flight bans on Russian aircraft. In retaliation, Russia closed its airspace to most Western airlines, forcing carriers onto longer, costlier West Asian routes. Unlike many of their Asian competitors, allowed to fly over Russia and therefore able to maintain stable prices, some Western airlines have scaled back operations to Asia.

Maritime transport has also faced disruptions as Houthi attacks in the Red Sea and Arabian Sea have forced carriers to reroute via the Cape of Good Hope. The longer Europe-Asia journeys (+30% for Shanghai-Rotterdam) have caused vessel delays and congestion. With carriers able to pass on costs to customers – the Drewry World Container Index (DWCI), which tracks the freight rates for 40-foot containers on eight major East-West maritime routes, climbed by 137% in 2024 – profit margins have improved.

The January 2025 ceasefire between Israel and Hamas may ease disruptions. Following the announcement, the Houthis pledged to limit attacks to ships affiliated to Israel until all ceasefire phases are fully implemented. However, risks persist in the Red Sea against the backdrop of a fragile ceasefire. This, together with financial incentives for carriers to bypass the Suez Canal, suggests that a normalisation of shipping flows may be slow. Moreover, a return to the zone could initially increase congestion and freight rates. In the long term, however, normalisation of traffic would bring rates down. In January 2025, the DWCI was still at 65% of its January 2023 level.