Trade tensions have reached a fever pitch in 2025, creating a challenging landscape for logistics companies worldwide.
Ongoing trade tensions – characterised by tit-for-tat tariffs, export controls, and geopolitical ambivalence – have converged with other shocks (including inflation and shifting consumer behaviour) to produce “unseen levels of unpredictability and uncertainty” for businesses (1).
At the time of writing, President Trump has pulled back from inflicting a seemingly arbitrary and confusing schedule of tariffs levied around the world, with the notable exception of China. While the rest of the world gets a 10% tariff, China gets 125%. Unfortunately, if you want anything from technology to clothing to toys for children, this can present a potentially crippling challenge.
While everyone is looking at the fight between China and the U.S. though, it may just be the 10% across the board that tells the more important story. What this signals is an end to free trade and what it means for business is a much less stable environment, not just for now, but for the foreseeable future. In other words, the question is no longer if supply chains will be disrupted, but how companies can effectively navigate these disruptions (1).
The question is no longer if supply chains will be disrupted, but how companies can effectively navigate these disruptions.
The Trade War’s Impact on Logistics
Trade conflicts – most prominently the U.S.– China tariff battle – have materially altered global trade flows. Such wild jumps in tariff policies have made the situation highly unpredictable (2). Logistics providers are caught in the middle: navigating newly imposed customs duties, rerouting shipments to avoid hotspots, and dealing with clients’ urgent pivots in strategy.
One immediate effect has been rising inventory buffers. Fearing sudden tariffs or import bans, many importers accelerated shipments and built up stockpiles, with some businesses frontloading imports and securing extra warehouse space. U.S. inventory levels have continued expanding even as demand fluctuates, according to the Logistics Managers’ Index (2). While carrying more inventory cushions against delays and duties, it also increases costs – pressuring logistics players to optimise workflows, operations, warehousing solutions and financing.
Trade frictions are also redirecting trade lanes. The pause on wider tariff increases has meant global firms have redirected their manufacturing to lower cost locations. This means flows of certain goods have shifted to alternate routes and partner countries. For instance, manufacturers pursuing a “China+1” strategy are importing via Southeast Asia or Mexico to sidestep tariffs, leading to growth in those lanes. Alliances like the Regional Comprehensive Economic Partnership (RCEP) in Asia and new free trade agreements create alternative corridors that nimble logistics firms can capitalise on.
However, adjusting networks is complex – ocean carriers, air cargo, and freight forwarders must balance capacity as volumes on traditional routes (e.g. Trans-Pacific) ebb and new lanes surge. Add to this that tariffs will almost certainly be combined with increased auditing and enforcement, and global shipping is living in a much more complicated world than just a few months ago
Digital transformation is rated a high-impact trend across the industry, involving automating and digitising logistics operations to enhance efficiency, visibility, and data management.
Adapting to Thrive in the New Climate
This is a new world. While President Trump tweeted “Only the weak will fail!”, there are more positive and less binary ways to look at how the global supply chain can adapt to the new trade climate.
One area of focus is building resilience into operations. This means designing supply chain solutions that can absorb shocks and pivot quickly. Best practice is adopting multisourcing and dual sourcing for critical transport and supplier links – ensuring there’s a plan B if a key route or vendor is compromised. This happens already for the larger companies, many shippers and Third-Party Logistics firms (3PLs) now maintain multiple carrier contracts and routing options so they can reroute freight to nearshore options at the first hint of trouble (3). Logistics players facilitate this by offering flexible, modular services that can plug into different supply chain setups on short notice.
The aforementioned front-loading is an opportunity and a challenge. As the U.S. has granted a 90-day reprieve to increased tariffs, companies including Apple and Microsoft are filling warehouses with goods to make sure they can take advantage of the pause before the next influx of price increases. This drives up short-term shipping demand and fills vessels earlier than usual. Trans-Pacific shipping volumes were unseasonably strong early in 2025 as companies frontloaded inventory ahead of potential tariff deadlines (4). But certainly, this surge will be followed by a lull once the tariffs kick in, leaving carriers to juggle excess capacity.
The best way to ensure the flexibility needed to accommodate the pressures of developing a flexible and resilient logistics strategy require optimised digitisation and automation and logistics firms are turning to technology in key ways to cut costs and improve speed. Digital transformation is rated a high-impact trend across the industry, involving automating and digitising logistics operations to enhance efficiency, visibility, and data management (3).
The key competitive advantage will be making sure you have the capability to harvest high-quality, auditable data… to produce high-relevance, timely and actionable intelligence.
Seeing the Future
Predictive analytics are crucial for staying ahead of disruptions. By combining historical and real-time data, AI-driven algorithms can forecast potential problems before they escalate (5). For example, by analysing patterns of port congestion, weather, and now tariff announcement timelines, predictive models can advise shippers on the optimal time and route to dispatch a shipment to minimise delay risk. Similarly, demand forecasting models, refined with machine learning, help companies anticipate how clients will react to price hikes from tariffs, so logistics companies can adjust services accordingly.
One logistics platform noted that advanced analytics can model various tariff scenarios and their impact on costs, giving companies a data-driven basis for contingency plans (6).
Internet of Things (IoT) sensors and digital twin simulations are enabling real-time visibility and agile re-routing. Devices and sensors on cargo, trucks, and ships allow companies to track the precise location and condition of goods in transit. For instance, a sensor on a shipping container can report if that container is stuck awaiting customs clearance or if it’s en route to a different port than planned. This wealth of real-time data feeds into digital twin models – virtual replicas of the supply chain – that companies can use to simulate and optimise operations. A digital twin can integrate IoT data, such as a sudden port delay or temperature fluctuations in a refrigerated container, with broader market and risk data, to evaluate responses instantly. Should the cargo be re-routed to a nearby and friendly port? Will a delay in one component cause an assembly line shutdown next month? Digital Twin models run “what-if” simulations to answer these questions before the disruptions and costs cascade (5). The payoff is fewer surprises and the ability to respond to problems (like a sudden tariff change or port closure) within hours rather than weeks.
Data-driven risk management helps with compliance as well. Keeping up with the constant tariff updates manually is nearly impossible – which is why companies are leveraging databases and automation. Models that can integrate high-quality data on the current state of shipments with real-time government alerts on tariff rule changes, HS code updates, and sanctions, can mitigate risk of noncompliance and provide a means to prove good faith in an audit (6). This is critical, because compliance mistakes (like using an outdated classification code) in the current environment can lead to fines or cargo detentions – outcomes no one can afford when supply chains are already stretched (7).
Shipping and logistics firms around the world have now been launched into the forefront of the data revolution, requiring more automation, more data analysis, and more dynamic reporting and analytics than ever before. The key competitive advantage will be making sure you have the capability to harvest high-quality, auditable data from a well-constructed, well-connected and adaptable environment, to produce high-relevance, timely and actionable intelligence. Trade turbulence is only going to continue as relationships between nations realign to new circumstances. These factors are largely outside of our control. Ensuring and progressing market position in this climate means managing what you can control: leveraging advanced data, tracking, and reporting capabilities to automate and ensure operational resiliency where possible, maximising the impact of your reporting through next-generation digital capabilities such as those afforded by IoT and Digital Twin models, and ensuring demonstrable risk management through real-time service and environment conditions tracking.
These regulations need to be created with the input of data scientists around the globe, who understand the sheer power that has been made so readily available, yet is still so casually used in the mainstream.
And when mistakes are made, however grave the consequences, we must be certain with whom the blame and consequences lie. Of course, the machine itself cannot be to blame – the operator or manufacturer, however, can be. We don’t, for example, blame the chatbot for being racist or sexist, as Stijn Christiaens posits, but those failing to spot (or wilfully ignoring) the damaging bias present in the training data.
Sean Russell
Managing Principal, Ortecha
contentS
TALK TO AN EXPERT
Would you like to talk to our experts about how you can use data to stay ahead of disruptions?
