A rapidly-shifting global landscape has businesses working through a "fog of supply chain and economic uncertainty," as tariffs and geopolitical tensions have slowed transit times and constrained freight capacity.

According to Kearney's annual State of Logistics Report released on June 3 through the Council of Supply Chain Management Professionals (CSCMP), the logistics industry in 2024 returned to pre-pandemic levels in certain areas, but also dealt with flat business volumes, excess truck capacity and rising operation costs. The end result was what Kearney described as a "mixed picture" for the year, where U.S. business logistics costs increased by 5.4%, but the country's trucking sector still showed signs of recovery in the latter half of 2024. 

In 2025, global transportation and logistics output is projected to grow by more than 4%, with a "steady but not spectacular" 2% increase forecast for the U.S. The year is also expected to bring rising costs driven by inflation and increased labor expenses, with Trump administration tariffs representing "the biggest wild card" when it comes to assessing and planning for global shifts in supply and demand.

“Today’s logistics leaders are operating in a world of rapid shifts and persistent uncertainty — a true fog of global commerce," CSCMP president and CEO Mark Baxa said.

Read More: Geopolitical Uncertainty Leads to Dip in Business Optimism

Kearney partner and lead author for the report Korhan Acar further noted that the logistics industry needs to "move beyond short-term fixes, and fundamentally rethink resilience," especially as artificial intelligence and automated technology have made it more affordable to build resilient supply chains.

"In a world defined by disruption, resilience is what ensures continuity, enabling agility and long-term durability," Acar added.

Meanwhile, the U.S. freight forwarding industry has found itself in the middle of a "significant transformation," Kearney described, highlighting shifts in technology, consolidation, nearshoring and environmental regulations. That includes freight forwarder DSV's $15.9 billion acquisition of DB Schenker, as well as CMA CGM's acquisition of Bollore Logistics, and Forward Air's merger with Omni Logistics. 

Tariffs have also had companies doubling down on efforts to diversify their supply chains, and invest in tariff tracking and management tools to manage increased costs created by President Trump's difficult-to-predict trade policies.

Kearney's report also found that, despite recent economic instability, the e-commerce industry has actually been moving "at a brisk pace," with $6.3 trillion in global online retail sales in 2024 driving more efficient last-mile deliveries, agile warehousing strategies, and strong demand for air freight. Overall, 2024 was a shipper's market for the parcel and last-mile delivery sector, as Amazon and Walmart continued to grow their networks, and Chinese platforms like Temu and Shein aggressively expanded their reach.

At the ports, the ocean freight industry struggled with a slew of geopolitical disruptions in 2024, from Houthi rebel attacks that cut off traffic through the Red Sea for much of the year, to environmental regulations that drove shipping costs up. Kearney predicts that, this year, new vessel deliveries will cause supply to outpace demand, leading to reduced rates and greater competition for shippers. With improved conditions at the Panama Canal, and attacks in the Red Sea subsiding, 2025 is expected to bring a "moderate shipping environment" compared to 2024. 

This comes in the wake of the Organization for Economic Co-operation and Development (OECD) downgrading its forecast for world economic growth, slashing its outlook for the worldwide economy from 3.1% to 2.9%. The OECD — an intergovernmental group that advises countries on economic policies — pointed to a "significant" rise in trade barriers created by Trump's tariffs as the main culprit.