2025 is around the corner. Literally, it’s in like 36 hours, and with that come New Year’s resolutions and big goals for the new year. Over here at all things Check Call, we like to abandon resolutions and goals and make predictions about what could happen in the new year. All we have to go on is vibes, hunches and a few well-educated guesses.
The first big prediction is about returns and reverse logistics. This has consistently been an area that shippers and 3PLs have struggled with at scale. This year I think it will come to a head as e-commerce continues to grow and flourish. Consumers don’t want to pay for returns; they want returns that are easy and low effort.
Returns used to be like 1%-3% of a shipper’s business, but that total is growing and returns are eating into revenue faster than ever. There’s little shippers can do to discourage consumers from making returns, but handling returns and the logistics of it effectively can be a huge cost-saver.
The second prediction is that supply chain flexibility and resiliency will be thoroughly tested this year. With the president-elect’s promised tariffs and with inevitable labor disputes – including one that isn’t resolved yet from 2024 – it stands to be a tumultuous year.
Shippers’ lessons learned from 2021 and the pandemic will be tested to the max in 2025. Their flexibility and adaptability will be put to the test – possibly as early as Jan. 16. The East Coast and Gulf Coast port worker strike from October was halted because the master contract got extended through Jan. 15. As of right now, however, there has not been a resolution, and it seems unlikely that one will emerge. Here’s hoping shippers have a couple backup plans at the ready.
Last and most certainly least is the unpopular prediction that it could be a hard year for freight brokers. Some of the legacy giants will survive, but some of the smaller, younger brokers might see hardships this year as they’re caught in the middle of a rate war. Shippers have grown accustomed to lower rates, while carriers feel that they have been ripped off for too long and are looking for some revenge in the form of higher rates. This leaves brokers caught in the middle.
Margins begin to erode, shippers start to pay later and draw out payment terms, and carriers want to be paid immediately or they’ll go somewhere else. It’s a bleak outlook that I don’t love and don’t wish upon the industry, but I don’t see how we get out of it.
If you have a hot take for 2025, let me know. All theories are welcome. Happy New Year!
TRAC Tuesday. This lane from Chicago to Memphis, Tennessee, is a casual 534-mile trip. The all-in rate for the lane is elevated due to the holidays. Spot rates hit the Christmas spike and haven’t quite come down yet, a common theme throughout most of the country. An all-in rate of $1.396 should be enough to get the load secured with a carrier. Outbound tender rejections in Chicago have dropped to 8.83%, and Memphis has fallen to almost the same at 8.85% rejections.