The global supply chain is in a better place today than it was in 2021 and 2022, when the COVID-19 pandemic and its economic aftershocks created unprecedented trade distortions.
However, it’s not exactly smooth sailing at the moment, and a confluence of factors could yet conspire to make 2025 more unsettled than 2024 on the global trade front.
That could have ramifications for businesses and individuals across the supply chain, including primary producers, value-add manufacturers, retailers, and the individuals and businesses that actually purchase and consume goods.
Experts like seasoned investor Steve Streit, whose retail and finance portfolio companies can provide him with rare insight into the fast-evolving global trade and money flows, are watching the situation closely. Here’s what Streit and his peers see as potentially the top six supply chain trends to watch in 2025 and after.
- Uncertainty Over Import Tariffs and Other Barriers to International Trade
The “free trade bias” of the 2000s and 2010s has been replaced in recent years by a move toward protectionism.
This is especially apparent in the United States, where tariffs on goods imported from Canada and Mexico could reach 25% in 2025, according to CNN. Tariffs on certain goods from other countries could be even higher.
“Higher tariffs could mean higher final prices for consumers, but also — potentially — lower demand for goods imported from abroad,” says Streit. That’s bad news for retailers that sell imported wares and could lead to a reordering of supply chains within import-dependent industries.
- Falling Shipping Prices Amid Slackening Demand
Due to slackening global demand for a variety of goods and other geopolitical factors likely to persist into 2025, overseas shipping costs are expected to fall next year, says shipping trends expert Dennis van der Laan.
That could bode well for retailers and suppliers that import products and components from outside North America, and possibly counteract the effects of new tariffs.
“With overcapacity and a subsequent expected drop in container prices, it is not hard to imagine goods finding their way overseas rather than overland,” van der Laan says.
Time will tell how the math works out, but businesses throughout the supply chain would no doubt welcome some breathing room after a period of unusually high shipping levies.
- Consolidation in the U.S. Ground Transport Sector
The failure of U.S. trucking giant Yellow was a wake-up call for a beleaguered American logistics industry.
While industry experts expected the fallout to include higher transportation costs for logistics providers and retailers, the effect so far has been muted, and much of Yellow’s infrastructure remains active. Whether this continues into 2025 is an open question, however.
- Expanding Market Share for Major Players (Especially Amazon)
This year, Amazon increased its share of the U.S. parcel delivery market to 27%, overtaking UPS for the second spot behind the United States Postal Service with 31%. Both UPS and FedEx lost market share, with respective volumes falling by 10.3% and 6.1%.
Amazon’s logistics power play comes as it continues to grow its share of the e-commerce market. It’s a one-two punch that represents a serious threat to independent retailers, even relatively large ones backed by high-trust brands. As the U.S. economy teeters on the brink of recession in 2025, retailers and supply chain businesses that can’t compete with the “big boys” on pricing may suffer.
- Ethical Sourcing Remains Top of Mind
Despite a backlash to corporate ESG policies, consumers remain motivated by what they perceive to be ethical practices among retailers and supply chain businesses: namely, fair labor practices and environmental stewardship.
It’s not that consumers penalize businesses that don’t engage in these practices so much as they reward companies that do — and, critically, that “show their work.”
- AI Could Unlock Significant Efficiency Gains
Newly empowered AI models enable more effective demand planning that goes beyond expected demand trends to incorporate possible future scenarios like severe weather and economic downturns as well as internal costs, production capacity and delivery capabilities, says Oracle’s Joseph Tsidulko.
“AI has become the gold standard for predicting demand based on both internal data signals, such as sales pipelines and marketing leads, and external signals, such as broader market trends, economic outlooks, and seasonal sales trends,” Tsidulko says.
But there’s a flip side to the AI boom, experts note: More sophisticated cybersecurity threats that will test supply chain companies’ digital defenses.
Logistics Industry Outlook 2025: Glass Half Full?
“May you live in interesting times.”
So far this decade, the global supply chain has certainly lived up to this old maxim. The relatively normal-seeming environment of the past 18 months can’t obscure the fact that global trade flows remain challenged following an unprecedented pandemic and a reorientation of major economies toward protectionism.
However, there is reason for optimism as well. Falling shipping prices could improve retail and producer margins as increasingly powerful AI drives further efficiencies. Ethically-minded and digitally savvy consumers may unlock new opportunities for responsive, forward-thinking brands as well, even as digital security challenges persist.
So, overall, is the glass half empty or half full for the logistics sector in 2025? Stay tuned. If nothing else, it’ll be an interesting 12 months.