The outlook for global supply chains in 2025: Opportunities, risks, and imperatives
January 2025, By Jonathan Dutton FCIPS,

As the world remains unstable for global business, Jonathan Dutton FCIPS outlines, for Andaman Partners, the prospects for managing international supply chains in 2025.
Today, most people easily recognise that we live in a world of growing volatility, uncertainty, complexity and ambiguity – a VUCA world.
It is no surprise that the global freight market faces continued challenges in 2025 and, maybe, some opportunities, for those with conviction. Maritime consultants Drewery forecast another turbulent year, particularly for sea freight, the foundation of the US$1.6 trillion global freight industry.
The global supply chain PESTLE
At the start of 2025, even a cursory ‘PESTLE’ macro-environmental analysis offers significant risks for global business; wars in Europe and the Middle East, Trump back in the White House threatening tariffs & trade wars, action on climate change gathering pace and bringing ramifications, mass immigration questions in the US, UK, Europe and Australia, and many countries coping with sluggish demand and a cost-of-living crisis, if not always high inflation rates now.
These issues will not subside quickly and any supply chain planning in 2025 needs to take into account these very real risks. Moreover, this list does not even include more localised micro factors such as unpredictable natural disasters, local industrial disputes at ports – particularly on the US east coast, pirates on the high seas around the Indian Ocean, traffic restrictions in the Panama Canal, and China positioning over Taiwan.
Global trade levels and unstable freight prices
World trade levels actually declined in 2023, with the value of goods and services falling by 2% to some US$30.5 trillion, of which goods accounts for around 75%. It was a challenging year for trade, with a number of factors contributing to the downturn, including; less demand in developed economies, weaker trade in East Asia and South America, inflation making goods more expensive, higher interest rates dampening demand and geopolitical influences, skewing confidence and business decision-making.
Nevertheless, the WTO forecasted, in late October 2024, that the global ‘goods’ trade will grow by 2.7% in the full year 2024. Completing a general trend of upwards growth in the years since Covid - although not without some significant ups and downs along the way. And, it has to be said, the continuing threat of inflation or economic downturns, globally and regionally, continue to affect trade, demand and prices.
Yet the continuing vicissitudes of global trade over this period since Covid have led to significant fluctuations in shipping cost most recently. In fact, the digital freight platform Frieghtos report the global freight rate average for a standard 40ft container falling recently from $5,900 in July 2024 to $3,349 by late October – a 43% drop. However, they forecast an 8% increase in capacity in 2025, with only a 3% increase in demand, which in theory should help ease volatility. However, shipping rates are likely to increase during peak times due to higher demand. As always in freight, fast and slow lanes, seasonal demand, and micro interruptions can heavily influence availability and price at short notice.
So, to what extent are long-standing capricious freight prices truly marginal for global firms in the long-run? And, to what extent is it now more strategic questions that are an imperative consideration for international organisations relying on supply of goods and materials?
Risky business
Global freight remains a risky business. The Covid pandemic taught buyers that supply cannot be assured – will our stuff turn up? This is a very real question. And, naturally, the further goods have to travel, generally the greater the risk they might not arrive.
This must be taken into account in any business equation. Demanding more planning, greater risk management and, likely, a solid ‘Plan B’ for critical goods and materials. No business can survive for long without critical direct supplies.
“ …. [business has] spent the last few decades perfecting lean supply chains, maybe in such a volatile world they should now be more robust?” 'The Fragility of Perfection’ - THE ECONOMIST
Since the pandemic, organisations have instituted a range of strategies to secure supply. In July 2022, The Economist survey indicated that the Forbes Top 3000 global companies had increased stock by around 50% - or over US$1 trillion. But this approach in itself seems short-term in nature, consolidates risk and presents a bigger problem when the stock ultimately has to be dumped if not used.
Others have dual-sourced key supply lines, providing ready options if supply chains become blocked. Many have completely reassessed their overseas sourcing strategy – rebalancing cost & quality advantages against the risk of non-supply by reshoring or friend-shoring to nearer or safer countries. It is noticeable that since 2016 (Trump 1.0) US imports from Mexico and Canada have increased almost in line with the reduction in US imports from China.

Ultimately, if the world is deglobalizing and breaking back into defined trading blocks (US and friends, Europe and friends, China and friends, Russia and friends) maybe business need to think ahead of the curve on sourcing?
Adding micro environmental factors into the risk matrix, makes the need to be thinking and acting more proactive a business imperative at a regional level – eg: natural disasters (more often in Asia it feels), targeted tariffs (from the US and others in response), strikes (the US East Coast seems vulnerable in 2025 say Drewery) and DP World had a prolonged industrial dispute to manage in late 2023 into 2024), two shipping choke-points (the Red Sea and Panama Canal) adding around 30% to shipping times and costs to avoid them and feed major markets reliably.
The criticality of the Asia-Pacific region
The Asia-Pacific is already the ‘world’s workshop’ – accounting for over 60% of global GDP and some 70% of GDP growth since the pandemic. It is critical to global production. Firms relying on this region should take extra measures on risk.
This means more strategic planning, better preparation and thinking-through true needs and, increasingly, enacting regulatory obligations. Eight major ‘western’ countries (US, UK, Australia, NZ, Canada, Germany, Switzerland, France) and the European Union have firm regulatory requirements on organisations regarding the eradication of modern slavery in the supply chain and improving human rights of workers. Much focus is on Asia.
More recently, a similar list of countries, plus Japan and South Korea, demand that organisations work to reduce carbon emissions towards NET ZERO up their supply chains. In Australia, mandatory NET ZERO reporting begins 1st January 2025. Again, much focus is directed up Asian supply chains.
Adding human rights and Net Zero requirements to the commercial sense of risk-management in a VUCA world with uncertain supply chains, a compelling case for re-evaluation of overseas sourcing decisions, especially to lower cost countries, is clear. And these requirements seem set to grow quickly in obligation and consequences of non-compliance.
Technology and supply
New technology can help organisations develop more robust supply chains and navigate fragile supply chains in different ways. Yet, only to a point, as much of the freight industry is built on manual process and admin. Maybe this even insures supply-chain security a little from the rapid and penetrative advancement of artificial intelligence?
In fact, is it not new technology that perhaps makes supply chains more vulnerable currently? ‘Supply chain security’ used to mean securing stock. Today, it more likely implies data security questions. High profile breaches of both public and private databases in recent times has illustrated how easily motivated hackers seem to penetrate seemingly secure systems, both on-premise and in the cloud. How are organisations beefing up cyber-security in their supply chains and within their suppliers? All too often this feels like an easier ‘back-door’ to valuable systems?
Opportunities for the convicted
Wherever there is risk, history teaches that opportunity also exists for those with insight and conviction. Anticipating and predicting changes can offer the opportunity of spot-buying, hedging and even shorting capacity.
But, more predictably, and more strategically, diversifying risk sems a sound strategic step for many; for example, re-evaluating dual-sourcing possibility, near-shoring options, in-house production or just building stock levels:
“The cost of freight is constantly rising over time, the cost of production constantly falling” Prof Martin Christopher
The market provider with reliable supply has a clear competitive advantage in a VUCA world.
And, given almost certain volatility, longer term rate and volume agreements for freight and shipping seem sensible – built upon firm forecasts of seasonal demand at predictable market prices, enabling firmer planning, greater certainty and keener prices.
Finally, maybe an investment in established technology might also bring all of the above – better planning, more accuracy, greater certainty, less risk. Utilising A.I. and blockchain technology in a supply chain context already feels overdue, never mind the immediacy and obvious functionality of ERP systems, procurement functionality and clearer analytics work built on better data.
Conclusion
The global supply chain landscape in 2025 is expected to be both complex and dynamic, bringing real risks but also strategic opportunity.
By staying informed and proactive, CEOs can navigate these challenges and capitalize on supply-side opportunities to ensure the resilience and efficiency of their supply chains in both the short and long term and, even, bring competitive advantage in their own marketplace.
Jonathan Dutton FCIPS, is the principal of JD Consultancy, and works as a consultant, author, speaker and trainer on procurement & supply and is widely recognised throughout ANZ as an industry thought-leader. He is also the former founding CEO of the procurement peak-body CIPS in Australasia, as well as the former CEO of PASA, the largest provider of procurement conferences & events in the region. He is based in Melbourne, Australia, and can easily be reached through Andaman Partners, LinkedIn or the JDC website.
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