Navigating the Complexities of Global Trade: The Logistics Sector's Resilience

As reported by Kearney in their latest State of Logistics Report, the global business surroundings is currently navigating through a haze of supply chain challenges and economic unpredictability. Factors like tariffs and geopolitical tensions have notably impacted shipping times and limited freight capacity.

The report, released on june 3 by the Council of Supply Chain Management Professionals (CSCMP), indicates that while some logistics sectors have rebounded to pre-pandemic performance levels in 2024, others are facing stagnant business volumes, surplus truck capacity, and escalating operational costs. Kearney characterized this scenario as a “mixed picture,” revealing that U.S. logistics expenses rose by 5.4%, although there were signs of recovery within the trucking industry during the latter part of 2024.

Looking ahead to 2025, global transportation and logistics output is expected to increase by over 4%, with a modest growth forecast of around 2% for the U.S. However, rising inflation and labor costs are anticipated to drive up expenses further. The unpredictable nature of tariffs from previous administrations remains a significant factor influencing global supply dynamics.

Mark Baxa, president and CEO of CSCMP, emphasized that today’s logistics professionals must navigate an environment filled with rapid changes and ongoing uncertainty—essentially a fog enveloping international trade.

Korhan Acar from Kearney pointed out that it’s crucial for the logistics sector to move past temporary solutions; instead, there should be a essential rethinking towards building resilient systems—especially as advancements in artificial intelligence make it easier than ever to create robust supply chains.

“In an era marked by constant disruption,” Acar noted, “resilience is key for ensuring continuity while fostering agility and long-term sustainability.”

On another note,Kearney highlighted how the U.S.freight forwarding landscape is undergoing substantial changes due to technological advancements, consolidation trends like DSV’s $15.9 billion acquisition of DB Schenker or CMA CGM’s purchase of Bollore Logistics—and even mergers such as Forward Air joining forces with Omni Logistics.

The impact of tariffs has prompted many companies to diversify their supply chains actively while investing in tools for tracking tariff implications amid fluctuating trade policies from previous administrations.

Kearney also observed that despite recent economic fluctuations affecting various sectors negatively,e-commerce has been thriving at an remarkable pace—with global online retail sales hitting $6.3 trillion in 2024—which has led businesses toward more efficient last-mile delivery methods alongside agile warehousing strategies fueled by strong air freight demand. This year was particularly favorable for shippers within parcel delivery services as giants like Amazon and walmart expanded their networks alongside aggressive growth from Chinese platforms such as Temu and Shein.

Meanwhile at ports across regions worldwide—the ocean freight sector faced numerous geopolitical challenges throughout 2024—from disruptions caused by Houthi rebel activities impacting Red Sea traffic significantly—to new environmental regulations inflating shipping costs further still. Looking forward into this year though—Kearney anticipates new vessel deliveries will lead supply levels surpassing demand which could result in lower rates along with heightened competition among shippers; conditions at Panama Canal improving coupled with reduced conflict scenarios suggest we might see more stable shipping environments compared to last year’s turbulence come 2025.

This comes after the Organization for Economic Co-operation and Development (OECD) revised its predictions downward regarding global economic growth—from an initial estimate down from 3.1% now sitting at just below 2%. The OECD attributed these adjustments primarily due to increased trade barriers stemming largely from prior tariff implementations affecting international commerce significantly overall.