The report, The State of the Supply Chain and Logistics Industry in 2025, authored by John Manners-Bell, CEO of Ti, highlights the impact of macroeconomic challenges, geopolitical shifts, and evolving trade policies on the global logistics sector.
Economic stagnation in Europe and the UK
The European road freight sector is struggling under the weight of economic stagnation, rising costs, and declining demand. According to Ti’s analysis, the number of EU transport businesses ceasing operations has risen to a ten-year high. The report attributes this downturn to “the cost of borrowing and economic growth,” which are inextricably linked to the sector’s financial health. With GDP stagnating and interest rates remaining elevated, conditions for freight operators have worsened.
European road freight rates have fallen since late 2022 due to overcapacity and weak demand, further squeezing margins.
“During this time, the number of businesses ceasing to trade has trended upwards as underlying costs have risen, making for toxic operating conditions,” the report states.
US market rebounds but faces labour constraints
The US trucking sector, which endured what Ti describes as “the Great Freight Recession” from 2022 to 2024, is showing signs of recovery. The report highlights sector-specific challenges, including tighter driver licensing regulations and immigration policies that may restrict the labour supply. President Trump’s proposed economic stimulus and protectionist trade measures could further reshape supply chains, potentially driving up domestic freight rates due to reduced capacity.
Despite these challenges, Ti notes that early 2025 has seen an increase in inventory restocking, providing short-term demand for trucking services. However, the report warns that this effect may be offset by a subsequent slowdown as retailers adjust their stock levels.
Shipping industry benefits from Red Sea disruptions
In contrast to the difficulties faced by the road freight sector, the global shipping industry has enjoyed strong demand in recent years. The report attributes this to disruptions in the Red Sea and Suez Canal caused by Houthi attacks, which forced vessels to reroute via the Cape of Good Hope. This extended transit times and effectively reduced global fleet capacity, leading to elevated freight rates.
However, Ti warns that normalisation of shipping routes following a ceasefire in Gaza could put downward pressure on rates. The impact of Trump’s newly imposed 10% tariffs on Chinese goods, along with other trade restrictions, is also expected to dampen trans-Pacific and trans-Atlantic shipping volumes.
Trump’s trade policy “shakes up” logistics
Trade policy shifts under Trump’s second term are poised to reshape global logistics. The imposition of tariffs on China, Mexico, Canada, and the EU is expected to slow import volumes to the US, with estimates suggesting a potential decline of up to 15%, prompting businesses to seek alternative sourcing strategies.
“Shipping and air cargo volumes from China (and in the future, the European Union) destined for the USA will be depressed as US importers seek alternative sources of goods, or re-shore production,” Ti adds.
Additionally, the tightening of the de minimis exemption, which previously allowed imports valued under $800 to enter the US without duties, is likely to disrupt e-commerce supply chains. According to Ti, this policy change will particularly impact Chinese online retailers such as Temu and Shein, which rely on bulk shipments of low-cost products. The shift is expected to drive more imports via sea freight rather than air cargo and increase demand for US-based warehousing and fulfilment services.
Easing pressure on oil prices: hopes for lower fuel costs
The report also examines the fluctuating price of oil and its implications for global logistics. Ti suggests that weak economic growth in China, combined with a transition to electric vehicles, is reducing upward pressure on oil prices. Additionally, the US administration’s plans to expand oil drilling and replenish strategic reserves could lead to further price volatility.
Ti notes that “on the whole, it looks likely that the supply chain industry will enjoy low and falling energy prices for some time.” However, lower fuel costs could slow the green transition, as businesses and consumers may see less urgency in adopting electric and hydrogen-powered vehicles.
Red Sea route return sparks hope
Overall, Ti paints a mixed picture of the global supply chain landscape. While the US market is showing signs of resilience, protectionist trade policies may disrupt global shipping and air cargo flows. European shippers could benefit from normalised Red Sea transit routes and lower oil prices, but economic stagnation remains a significant challenge.
“The prospects for the coming year are very mixed for the logistics and supply chain industry,” Ti concludes. With ongoing geopolitical uncertainties, businesses will need to adapt to shifting trade patterns and evolving market conditions to remain competitive.