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The global logistics industry faces mixed prospects this year, according to Transport Intelligence
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Some sectors are experiencing stagnating economic growth, overcapacity and bankruptcy, while others are seeing much better fortunes
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It is impossible to provide a “one size fits all” assessment of the health of the global logistics industry due to the variance in the macro-economic environment and the dynamics and cycles of individual market sectors, TI’s latest paper
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While the US is enjoying significant growth, manufacturing in the UK and European Union is stagnating along with consumer confidence
The global logistics industry is facing mixed prospects this year, according to logistics and supply chain research provider Transport Intelligence (Ti).
Some sectors being experiencing stagnating economic growth, over capacity and bankruptcy, while others are experiencing much better fortunes.
It is impossible to provide a “one size fits all” assessment of the health of the global logistics industry due to the variance in the macro-economic environment and the dynamics and cycles of individual market sectors, according to the “The State of the Supply Chain and Logistics Industry in 2025” paper by Ti chief executive officer John Manners-Bell.
The paper noted, for example, that while the US is enjoying significant growth, manufacturing in the UK and European Union (EU) is stagnating, along with consumer confidence.
Some countries are proving remarkably resilient, such as in the Gulf of Arabia, while others are struggling due to high global interest rates, “risk-off” investment sentiment and a weak recovery from the COVID-19 pandemic. Official figures also give little insight into the true state of affairs in China or the impact of its stimulus packages.
The paper said the road freight/trucking and the global shipping sectors provide good examples of the contrasting fortunes which can be identified within the industry.
Looking first at the road freight market, figures taken from EU’s statistical office, Eurostat, show that the number of EU transport businesses ceasing to trade has risen steeply over the past five years to a 10-year high.
The paper noted that research undertaken by Ti Insight in the past has shown that the financial health of the logistics sector is inextricably linked to two main factors: the cost of borrowing and economic growth.
GDP in Europe has flatlined and interest rates have risen in an attempt by central banks to address inflation.
Moreover, the paper said the US trucking market has been in a bad place, although there are positive signs it is moving out of what has been called “the Great Freight Recession,” which lasted, by some estimates, from the beginning of 2022 to the end of 2024.
Specific sectoral trends, such as tightened license regulations and President Donald Trump’s promise to repatriate illegal immigrants, many of whom work in the industry, is likely to reduce the number of drivers in the market resulting in higher rates due to lower capacity. These upward pressures will, however, be potentially helped (or exacerbated, depending on your viewpoint) by Trump’s plans to stimulate the US economy. Attempts to build up inventory by US importers will also provide a boost for trucking in the early part of the year, but this will be cancelled out by lower activity as retailers subsequently draw down stocks.
In contrast with road freight, the global shipping industry has enjoyed a bumper few years, the paper noted.
It said momentum “seemed to have gone out of the industry after the boom enjoyed at the end of the Covid pandemic.”
However, it said disruption to routes transiting the Red Sea and Suez Canal by the Yemen-based Houthis resulted in significant capacity reductions. Many container ships were forced to divert around the Cape of Good Hope adding to transit times and effectively reducing the size of global fleet deployable.
If traffic patterns return to normal following the ceasefire in Gaza, the paper said further downward pressure on global rates is expected.
This trend, it added, will be reinforced by Trump’s tariffs on goods imported by US shippers from China and Europe. The excess capacity in the market caused by weak economic growth will impact on rates and hence on the shipping lines’ profitability.
Trump’s policies, which the paper noted are “only designed to help and protect the US economy,” could spell trouble for trade partners Mexico and Canada, as well as other markets including China, and to a lesser extent Europe. The imposition of tariffs on imports will depress shipping volumes on the trans-Pacific and trans-Atlantic routes as well as regional cross-border trade.
The US’ decision to change de minimis rules (policy currently on hold) is also likely to have implications for shippers and logistics service providers, the paper said.
READ: Trump suspends repeal of de minimis provision
In the past, individual items with a value of under $800 could be imported into the US without the payment of any tariffs and with minimal levels of product information, leading to the development of Chinese online retailers such as Temu and Shein supplying the US market with cheap products, largely flown by air.
Trump’s decision to exclude shipments from de minimis rules (if they are affected by Section 201, Section 232 or Section 301 tariffs, which applies to a large proportion of goods being imported from China) will mean that volumes will decrease significantly, especially as shippers will also be required to provide 10-digit Harmonized Tariff Schedule of the United States classification, a new layer of administration.
There is also momentum in the EU to reform de minimis rules and, in May 2023, the European Commission set out recommendations for removing the exemption completely. Although the threshold is much smaller than in the USA – €150 – the volumes are higher.
Moreover, suggested reforms to the European Customs’ system could involve an administration fee being levied on e-commerce platforms for each package imported. As in the US, the changes may result in fulfilment of customer demand being undertaken from European warehouses, providing a boost to 3PLs and favoring traditional European distribution center models using established duty deferment processes.
However, the levy of a fee may run counter to World Trade Organization rules and could result in legal action.
Helping both supply and demand-side will be the reduction in oil prices caused by Trump’s intention to increase output. If this combines with a solution to the Ukraine-Russian war, then there will be real downward pressure on all energy prices, although removing sanctions on Russian exports will take a long time to achieve, the paper noted.
