Water transport growth accelerates in H1: report

The momentum was fuelled by a surge in container volumes.

The water transport segment—accounting for nearly 70% of the transportation and storage sector’s nominal value-added—saw growth accelerate in the first half of 2025, according to the Ministry of Trade and Industry’s Economic Survey of Singapore for Q2 2025.

The momentum was fuelled by a surge in container volumes, shipping route diversions caused by the Red Sea crisis, and front-loading activity by firms rushing to beat impending US tariffs.

Singapore’s role as a “catch-up port” became critical as shipping lines rerouted vessels around the Cape of Good Hope to avoid Red Sea disruptions.

These factors helped drive container throughput up by 7.2% YoY and lifted the water transport segment’s growth to over 6% in early 2025.

But the government warns this growth could taper off. With global trade expected to cool in the second half of the year—and US policies like new port fees on Chinese-built ships and the end of de minimis tax exemptions coming into force—shipping demand and margins could tighten.

Meanwhile, Singapore’s air transport sector has seen a more volatile recovery. After rebounding from a COVID-induced slump with strong gains in 2021 and 2022—driven by a boom in cargo followed by a surge in air passenger traffic—growth slowed significantly in 2023 and 2024. In 2025, the story has been one of stabilization.

In the first half of this year, total air cargo handled at Changi Airport rose 3.7% amidst another round of front-loading ahead of US tariff policy changes.

Passenger traffic remained strong, with Changi handling 17.5 million passengers in Q2—up 5.9% YoY. Singapore-based carriers alone moved 10.5 million of them, a 7.8% increase from a year earlier.

Still, the air cargo industry is expected to feel pressure from the US’ removal of duty-free treatment on low-value goods—a policy shift that could hit e-commerce volumes hard. While air cargo faces softness, passenger demand is projected to stay resilient.

The International Air Transport Association (IATA) forecasts air passenger traffic will grow 5.8% globally in 2025.

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