This year’s Council of Supply Chain Management Professional’s (CSCMP’s) Annual State of Logistics Report, titled “Navigating through the fog,” speaks to the uncertain and potentially treacherous conditions that the logistics industry is facing in 2025.
Created annually for CSCMP by global consulting firm Kearney and presented by Penske Logistics, the State of Logistics Report offers a yearly snapshot of the health of the logistics sector. This year’s report finds that U.S. business logistics costs rose 5.4% in 2024 versus 2023 to a total of $2.6 trillion, or 8.7% of the national gross domestic product (GDP). In 2023, U.S. business logistics costs were $2.3 trillion, also 8.7% of GDP. (Figure 1 shows a breakdown of logistics costs.)
Reprinted with permission from “Navigating through the fog,” CSCMP’s Annual State of Logistics Report, 2025
According to the report, last year was a mixed bag for the logistics sector. Logistics providers and shippers alike had to contend with persistent economic, geopolitical, and environmental pressures in 2024. Yet, compared to previous years, 2024 was a period of relative stability as supply and demand began to regain balance after several years of disruption post-pandemic. While real GDP rose around 2.7%, business volumes were flat and operational costs—particularly labor and fuel—increased.
This year, uncertainty and unease have returned to center stage, says the report—especially as companies try to navigate new trade tensions as well as fluctuating demand and emerging technological disruptions.
In spite of these concerns, the report authors express a “fragile optimism” for 2025, citing economic forecasts for a growth of 1.7% to 1.8% for real U.S. gross domestic product (GDP) this year. However, these forecasts are dependent on there being no major impact from tariffs.
As a result of so much uncertainty, report authors anticipate that the logistics sector will see a renewed focus on resilience and sustainability for the rest of the year. “As the fog thickens, the logistics industry must move beyond short-term fixes and fundamentally rethink resilience—not as a luxury, but as a strategic imperative embedded in networks, technology, and decision-making,” said Korhan Acar, Kearney partner and lead author for the State of Logistics Report.
Sector-by-sector analysis
The majority of the report goes into a deep dive analysis of the key changes that each subsector of the logistics market experienced in 2024 and the trends that are emerging in 2025. Here are a few key insights the report provides for each:
- Motor freight began 2024 still dealing with excess truck capacity and a lingering freight recession. But the spot market improved in the second half of the year and tender rejection rates rose, bringing hopes of stabilization even if these gains were only marginal. The outlook, however, has grown cloudier in 2025, according to the report. Tariffs may bring declines in freight volumes, while driving up equipment costs, as a third of commercial vehicles are sourced from Canada and Mexico.
- Ocean freight saw both costs and rates increase in 2024 due to geopolitical tensions, port disruptions, and environmental regulations. The report authors expect rates to soften in 2025 as demand dips, more capacity comes online with the delivery of new vessels, and tensions in the Red Sea ease.
- Railroads reported modest revenue growth and increased operating income in 2024. To enable long-term growth, however, railroads will need to make significant investments in infrastructure and collaborative partnerships to improve transloading and short lines. These improvements may help them take advantage of the trend toward nearshoring and a resurgence in U.S. manufacturing, report authors propose.
- Air freight experienced significant growth in 2024, spurred by the rise of foreign e-commerce platforms like Temu and Shein as well as growing demand for time-sensitive shipments in health care and electronics and disruptions in ocean shipping. The report authors anticipate slower growth in 2025—5.8% versus 2024’s 11.3%—as well as rate fluctuations and a shift to bulk freight with the elimination of the de minimis exemption.
- Parcel/last mile saw consumer demand in 2024 split between ultra-fast delivery for essentials and ultra-low-cost, slower shipping for nonessentials. The report expects regulatory changes, tariffs, and economic uncertainty to unsettle this market segment in 2025.
- Warehousing entered a period of stabilization in 2024 after several years of rapid growth. Vacancy rates rose to around 6.7% as new construction slowed and net absorption rates dropped from historic highs. Inventory levels began to stabilize, labor constraints eased, and companies continued to invest in automation and artificial intelligence (AI) to increase productivity. Forecasts for the sector are cautiously optimistic for 2025 in spite of concerns about tariffs and economic uncertainty. In particular, the report argues that e-commerce growth, while slower than years previous, will keep the sector healthy.
- Freight forwarding saw major market shifts in 2024 due to consolidation, such as the purchase of DB Schenker by Danish freight forwarder DSV, CMA CGM’s acquisition of Bollore Logistics, and Forward Air’s merger with Omni Logistics. Heading into the second half of 2025, freight forwarders will need to adjust their geographic coverage as trade tensions have more companies seriously considering reshoring.
- Third-party logistics providers (3PLs) are feeling the need to invest in regional hubs and last-mile delivery networks in an attempt to keep up with the rising demand for e-commerce services, according to the report. They are also seeing increased demand from customers to help them navigate changing trade policies and geopolitical tensions. As a result of the demand for more sophisticated services, many 3PLs are looking to invest in advanced technologies, such as AI, automation, and data analytics.
A view to the future
Looking ahead, the report predicts that U.S. logistics and transportation output will grow by 2% for the United States and 4.1% globally—which it calls “a steady but not spectacular advance.” Even further out, the report forecasts that the global logistic market will grow to $5.95 trillion by 2030, a 7.2% compound annual growth rate from 2025.
Throughout the report, the authors emphasize the important role of technology in enabling resiliency and sustainability of global logistics networks. “As AI and automation drive down the cost of building resilient supply chains, the greater risk now lies in standing still,” said Acar.
The full report can be downloaded from CSCMP’s website. It is free for CSCMP members and $299 for nonmembers.
