What Could a New Administration and Continued Chaos Spell for Logistics in 2025?
Meghan Hall
7 min read
Logistics can prove one of the most difficult—and volatile pieces of the supply chain for many brands and retailers.
And with an onslaught of potential change headed to the industry over the next few months—from a second Donald Trump presidency, to a potential resurgence of the East Coast port strike come January, to changes to de minimis and more—the landscape may seem murkier than ever.
Thomas Kempf, senior director of global air freight for Flexport, and Andrew Lazaroff, senior vice president of sales for Worldwide Logistics Group, joined Glenn Taylor, logistics editor at Sourcing Journal, for a discussion about the opportunities, challenges and questions that are ahead for the logistics industry.
Despite a variety of separate industry issues, the speakers highlighted the importance of diversification, and the need to adapt to disruptions proactively.
Trump 2.0
As January—and as such, a second term for former President Trump—rapidly approaches, some companies have started to scramble in preparation for potential tariffs, changes to trade policy and more.
Lazaroff said he expects to see further disruption to the ocean and air freight markets in the immediate near term, but going forward, a more consistent strategy for sourcing and supply chain will be the hallmark of successful companies and brands.
“In the short term, I think, unfortunately, you’re going to see some volatility in freight movements and pricing,” Lazaroff said. “Long term…a lot of diversification in sourcing—not China plus one; it’s going to be China plus many.”
Kempf noted that he foresees a more complex trade environment ahead, regardless of how the specifics on tariffs shake out. That, he said, is because the previous Trump administration showed a preference for bilateral trade agreements over multilateral ones.
“The winners will clearly be the ones that are at the forefront of the news, of the legislations and who can translate all their internal data [into] what these new bilateral agreements potentially mean for the company,” Kempf said.
Though speculation over how tariffs will be put into place—and at what rates—has run rampant since the president-elect unveiled his plans for 60 percent tariffs on goods coming from China and 10 to 20 percent tariffs on shipments from other countries, Lazaroff said in many ways, the only way forward for the industry is to hurry up and wait.
“We need to see how nuanced this is going to go, which countries are going to be talked about first, how high are the tariffs going to go? I think we have to wait and see,” Lazaroff said.
Having such a sense of uncertainty over what could be in the pipeline for 2025 trade policy means that Worldwide Logistics continues to advise its customers to build out a diversified and robust supply chain at every touchpoint possible.
“We’re not exactly telling our customers, ‘Hurry up and ship,’ but a lot of them are doing that anyway,” he said. “We’re just recommending that they start to think really strongly about what they’re going to do—maybe make sure you have flexibility and warehouse space. Be prepared to ship with different ocean carriers, different modes.”
Potential shifts for de minimis
As conversations over de minimis continues to swirl in Washington, Kempf and Lazaroff predict that brands will have to find different ways to acquire low-cost goods without financial penalty.
“[If] de minimis changes, we’re looking at anything around 20 percent of increases on a SKU-level basis—that’s an estimate. For [e-commerce] players now, the bigger ones probably will have more tools in the toolbox to absorb those increasing costs versus smaller brands,” he said.
But increasing costs aren’t the only worry industry players should have, Kempf said. There’s also the question over the change in volume impacting how quickly Customs and Border Protection (CBP) can clear shipments. He noted that, should de minimis changes be made, he expects them to go into effect in Q2 2025, which “is not as much time as one would hope.”
“CBP currently deals with about 37 million entries a year [from] e-commerce. Now that would go up to 1 billion entries. I don’t know, and I don’t think many have the answer yet—from an operational point of view, [how] CBP will be able to handle those entries,” he said.
To compensate, Kempf said, it’s likely that e-commerce players like Shein and Temu, which both rely on de minimis to ship low-cost goods from China directly to U.S.-based consumers, will start to take a more Amazon-like approach, upping their onshore inventory and logistics bases.
Even still, Shein and Temu are far from the only companies in the fashion and apparel spaces benefitting from the de minimis provision; legacy brands and retailers also find ways to play that trade “loophole” to their advantage. Though air cargo has, for some companies, become a trusty ally in getting China-direct goods rapidly, Lazaroff and Kempf said costs tacked onto operations by a lapse in or change to de minimis could cause some players to rely more heavily on ocean freight.
“Whenever air freight comes up, we do try to talk about other options with our customer base, most specifically expedited cargo solutions, both in the Trans-Pacific and the Trans-Atlantic,” Lazaroff told the audience.
Port Strikes
January has the potential to be a tumultuous month for the logistics industry, both because of a new administration coming in and because of a potential resurgence of the East Coast port strike that went on for three days earlier this year.
While that crisis was averted in the short term, automation continues to be an issue authorities and workers clash on. Lazaroff said those kinds of disagreements could be the linchpin for trouble.
“Automation seems to really be a sticking point that both sides are still digging their heels in about,” he said. If you know January 15 is when there could be a potential strike, if you’re shipping to the East Coast, those have got to move before the end of November, maybe just soon after that…Diversify your supply chain. Consider the West Coast.”
Kempf said the first part of the strike proved profitable for the air freight industry, but that despite a potential part two incoming, pre-procured cargo demand has not yet crept in with the same urgency for January. Nonetheless, he noted, companies need to take seriously the idea that the strike could go on for longer than it did the first time around.
“We all know if it just lasts for a couple days, we can do it. But…what if this lasts five months? Are you ready? If we’re all honest to each other, maybe not at this very moment,” Kempf said.
The Red Sea
With lots of looming change, consistency is key—unless it’s in the Red Sea.
The shipping and logistics crisis onslaught about a year ago by Houthi attacks has continued to affect shipping routes, rates and even air cargo, Lazaroff and Kempf said.
On the air cargo side, Kempf said, the Red Sea crisis has revealed a shortcoming in the air cargo industry: a lack of infrastructure for air freight movement in India and some areas of the Middle East.
Meanwhile, ocean shippers have been indefinitely redirected, affecting their reliability, shipping times and more.
“With the Red Sea, that’s almost…baked into what’s going on right now. It’s baked into rates; it’s baked into transit time, selling schedules, all of that. Almost all the carriers are not transiting through that area right now,” he said, noting that new shipping alliances could alleviate some issues with transit times and on-time rates.
