Logistics professionals are “navigating through the fog” of ongoing economic, geopolitical, and environmental pressures with little more than “fragile optimism” for what lies ahead.
That’s the sobering assessment from the Council of Supply Chain Management Professionals (CSCMP) in its 36th Annual “State of Logistics” (SoL) report, authored by global consulting firm Kearney and released in New York City on June 3.
“Looking ahead to 2025, the outlook suggests fragile optimism, driven by limp demand, technological integration, and a continued focus on resilience and sustainability,” the authors write. “Uncertainties—especially those driven by the new tariff trade tensions—will remain front and center.”
While some areas of the industry returned to pre-pandemic patterns last year, the overall market remained soft. Supply and demand began to rebalance following years of disruption, but 2024 was still marked by flat business volumes, excess truck capacity, and rising operating costs—especially in labor and fuel—which squeezed margins for carriers and logistics providers.
E-commerce remained a bright spot. Global online retail sales approached $6.3 trillion last year, pushing demand for faster last-mile delivery and more efficient warehousing. That demand helped drive record-breaking growth in airfreight—one of the few high-performing modes.
At the same time, wars in the Middle East and Ukraine disrupted key shipping routes such as the Red Sea and sent ocean freight rates soaring—if temporarily. Climate-related disruptions—including hurricanes in the Gulf of Mexico, a Mediterranean heat wave, winter storms in Northern Europe, and drought in Brazil—further tested global supply chain resilience.
“These developments led to increased transit times, capacity constraints, and rate volatility in ocean freight, as well as greater shipper reliance on third-party logistics providers (3PLs) for end-to-end support,” the report adds.
Logistics Management, which has covered every SoL report since it was launched by the late Bob Delaney in 1989, offers an in-depth analysis of this year’s findings—highlighting the factors shaping today’s logistics landscape and the strategies professionals are using to deliver world-class outcomes amid continued uncertainty.
State of Logistics by the numbers
Notable trends and statistics from the SoL report include that last year U.S. business logistics costs reached $2.6 trillion, a 5.4% increase year over year. That amounts to 8.7% of the national GDP. The previous year, the numbers were $2.3 trillion and 8.7%, respectively.
In the U.S., the private sector supported a 2.7% rise in transport and logistics output. That far surpassed slow growth conditions in Europe, which saw a mere 0.6% increase.
The logistics industry in 2024 also saw a return to pre-pandemic patterns in some areas. But it was also marked by flat business volumes, excess truck capacity and rising operational costs.
The trucking industry in the U.S. “showed signs of recovery” in the second half of last year with spot rates and tender rejection rates both rising. “Yet the improvements were only marginal and the hoped-for turning point was pushed out to 2025,” the report says
E-commerce continues to move along at a brisk pace. Global online retail sales neared $6.3 trillion. That resulted in more efficient last-mile delivery, increasingly agile warehousing and a stronger demand for air freight.
In the meantime, global transportation and logistics output is expected to grow by 4.1% worldwide. In the U.S., that growth is pegged at 2% this year, “reflecting a steady, but unspectacular advance,” according to the report.
The global logistics market is expected to reach $5.9 trillion by 2030. That’s a 7.2% compound annual growth rate (CAGR), driven in large part by e-commerce’s continued, relentless rise.
To help keep pace with the pace of e-commerce, technology will continue to shape 2025, “with AI [artificial intelligence] and automation expected to penetrate deeper into logistics operations,” the report concludes.
In particular, the authors suggest that AI implementation may act as an “inflection point” to counter the long-term decrease seen in total factor productivity, boosting global GDP as human labor is reallocated to more fruitful pursuits.
“Logistics firms are increasingly looking to adopt AI for real-time inventory visibility and decision-making, while greater warehouse automation could handle more and more types of tasks, thus mitigating labor shortages,” the authors say.
However, geopolitical tensions, combined with proposed and enacted tariffs and ever-changing trade regulations around the world have combined to increase transit times, capacity constraints, rate volatility in ocean freight—all leading to longer home package delivery times and delays. In turn, that led to a greater reliance from third-party logistics (3PL) providers to deliver end-to-end support.
Mexico overtook China as America’s largest trading partner last year. Transactions between the U.S. and Mexico topped at a record $840 billion—a 6% year-over-year improvement. But the increased threat of tariffs from both countries threatens that growth, the report cautioned.
The modal outlook
As in the past, trucking continues to be the engine that drives the national transportation machine as the largest transport mode. The Kearney report pegs the overall motor carrier industry at $994 billion last year, a tick below the $1.001 trillion in 2023.
Private—or dedicated—trucking reached $541 billion last year. That was followed by full truckload at $387 billion. Less-than-truckload (LTL) was $66 billion—although figures from SJ Consulting came in around $54 billion for LTL because of differing methodology.
However, trucking’s broader economic picture has become more uncertain. Rather than stabilizing, the outlook is now clouded by escalating global geopolitical tensions. For U.S. carriers, tariffs “may introduce new financial pressures” that, combined with potential declines in freight volume, will continue to squeeze carrier margins for this year and perhaps beyond, the report says.
Driven by e-commerce, the parcel sector revenue hit a record $229.7 billion in revenue last year. Parcel’s five-year compound annual growth rate was a stunning 10.6% last year.
Amazon has continued to move away from national carriers for its last-mile delivery—which could take as much as half of its business away from UPS by the second half of 2026, the report predicts. That would force UPS to make strategic adjustments to its network and go-to-market strategy, it added.
Airfreight enjoyed a boom year last year, hitting $100.5 billion in revenue, although its 5-year CAGR was merely 2.6%. The report indicates that it did not expect air cargo’s growth to continue this year at the rate it did last year.
The International Air Transport Association (IATA) forecasts cargo volumes to reach 80 million tons this year, a 5.8% increase from 2024, which is approximately half the growth rate of 2024. Total airline revenue is anticipated to surpass $1 trillion for the first time this year. Air cargo revenue is expected to contribute $157 billion, accounting for approximately 16% of the total—compared with a high of 41% in 2021.
Maritime enjoyed a big year in 2024, hitting $161.6 billion revenue. That was nearly double the revenue of rail at $97.3 billion. Rail had the lowest five-year CAGR of any mode, just 3.1%.
Challenges coming
There is no shortage of challenges ahead for logistics management professionals. They include pesky inflation, which is affecting expenses for labor and machinery—and then there are those frustrating tariffs.
“Tit-for-tat tariff actions are set to become an integral component of international trade policy and disrupt the global supply chain and logistics industry,” concludes the authors.
The World Trade Organization (WTO) has forecast that global trade could contract 0.2% this year. The decline in trade is anticipated to be especially dramatic in North America, where exports could fall 12.6% and imports by 9.6%, depending on how sticky those tariffs would be going forward.
“Although nearshoring to Mexico and Canada significantly contracted in 2024, the strategy remains attractive to CEOs and is expected to grow, potentially increasing North American freight volumes but straining border infrastructure,” the report notes
Of course, much of this is self-inflicted. That’s because the biggest wild card is the impact of the Trump administration’s tariff program, currently tested in the courts. “It will take time to sort out the full range of effects on global demand and supply,” the report says.
In summary, 2024 was “a year of relative stabilization and adaption for the logistics industry, the SoL report concludes. That in turn laid the foundation for “more agile” capabilities.
“Growth is anticipated,” say the authors. “It will be supported by technological advancements and improving market conditions, but success will hinge on navigating persistent uncertainties, with the emerging new tariff environment most in focus.”
In other words, get ready to navigate through more foggy conditions.
