Author: Alex Van Breedam
last updated: 30 January 2025
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“From 2024 to 2025: Adapting Supply Chains for a Changing World” is a concise report based on information published on the ISCN.Academy website with, on the one hand, the unique supply chain timeline with news, analyses and events and, on the other hand, the in-depth interviews held with supply chain professionals.
The report provides a detailed exploration of the key events that shaped the global economy and supply chain landscape in 2024 and offers forward-looking insights into trends expected in 2025. It delivers actionable recommendations to help companies navigate the future of supply chain management with confidence and clarity. “From 2024 to 2025: Adapting Supply Chains for a Changing World” comes in various formats, including an easy-to-read article, an engaging podcast and an interactive video presentation.
OVERVIEW > Contents
GLOBAL LANDSCAPE > State of economy
SUPPLY CHAIN LANDSCAPE > State of supply chains
RECOMMENDATIONS > Seven advices for companies
CONCLUSIONS > Closing considerations
Global Landscape
Economic headwinds from limited growth and inflation in 2024 will persist in 2025
In the aftermath of the pandemic, global economic growth slowed significantly, a trend that continued throughout 2024 and is expected to show only modest improvement in 2025. Key factors hindering global GDP growth in 2024 included persistent inflation, the ongoing war in Ukraine, and rising interest rates.
The Eurozone experienced limited economic growth but faced considerable challenges due to elevated inflation and geopolitical uncertainties. Although global inflation began to ease in 2024, it remained high in many countries. Similarly, while inflation in the Eurozone declined, it continued to exceed the European Central Bank’s target, posing ongoing challenges for economic stability.
Figure 1
GDP growth and Inflation
Geopolitical events have caused widespread supply chain disruptions, including production halts, commodity shortages, increased transportation costs, and the necessity for companies to diversify their supply chains and adopt risk mitigation strategies. Key developments include:
Geopolitical instability takes center stage for companies
- Red Sea crisis: Attacks by Houthi forces on cargo ships passing through the Red Sea have led to longer lead times and increased shipping costs due to route deviations.
- Israel-Hamas war: This conflict has contributed to volatility in energy prices.
- Russia-Ukraine war: The ongoing war continues to disrupt the delivery of raw materials and agricultural products while also affecting energy supplies.
- US-China tensions: Import tariffs have exacerbated tensions, with China facing overcapacity in manufacturing consumer goods and the US implementing protectionist measures.
- China-Taiwan tensions: Escalations in this region pose significant risks to the supply chains of semiconductors, electronics, and IT products.
- US presidential elections: The 2024 elections have already created uncertainty around global trade policies.
These geopolitical risks are expected to intensify in 2025. More than a dozen EU member states will hold elections, potentially reshaping the political landscape of the Union and impacting the single market. This comes at a time when the EU is urgently seeking to boost its competitiveness. Mario Draghi’s report highlights the economic challenges facing the EU, recommending annual investments of €800 billion in technology, clean energy, and defense. The report emphasizes the need for regulatory simplification, capital market integration, and reducing economic dependencies to close the innovation gap with the US and China.
“Polycrisis” Captures the Complexities and the convergence of ongoing and new challenges
In 2024, the term “polycrisis” gained prominence, aptly describing the convergence of multiple, interconnected global challenges. This multifaceted crisis has forced businesses to rethink their supply chain strategies to remain resilient.
The World Economic Forum’s Global Risks Perception Survey 2024-2025 underscores a largely pessimistic short-term outlook, with expectations that global conditions will deteriorate further in the long term. The report paints a stark picture of the decade ahead. Nearly two-thirds of respondents anticipate a turbulent or stormy global landscape by 2025, fueled by intensifying environmental, technological, and societal pressures. A state-based armed conflict, extreme weather events and geoeconomic confrontation are seen as by far the biggest risks by the respondents.
Figure 2
Global Risks Perception Survey 2024-2025
Sustainability is losing ground on decision-makers’ agendas
Amid mounting geostrategic concerns, climate and sustainability have taken a somewhat diminished priority. Globally, greenhouse gas emissions continue to rise, with no clear signs of a halt. While the US and Europe have achieved modest reductions, emissions in China and India are still on the rise. Reaching a critical tipping point by 2025 appears increasingly unlikely.
Figure 4
Greenhouse gas emissions
← Click on figure to enlarge
Source: Jones et al. (2024) – with major processing by Our World in Data
Supply Chain Landscape
The evolution of the Manufacturing and Services Purchasing Managers’ Index (PMI) serves as a key leading indicator of overall economic health and provides a seamless transition from the global economic landscape to the supply chain situation. The Manufacturing PMI for the Eurozone remained below 50 points throughout 2024 and is currently projected to stay below this threshold for most of 2025. This evolution reflects a kind of continuous negative sentiment which is less pronounced in the Services PMI. The latter felt under 50 in the second half of 2024 but will restore above 50 only in the second half of 2025.
Manufacturing and Services PMI Eurozone
As the polycrisis is worrying global business leaders, it also worries supply chain executives as it will increase supply chain pressure. This was already the case in 2024, but will definitely persist in 2025. According to Prologis’ 2025 Supply Chain Outlook, the most significant concerns of the executives active in supply chains, include the unpredictable economy, the slow economic growth and the decline in customer demand together with the climate change.
From a supply chain perspective, the Global Supply Chain Pressure Index (GSCPI) was generally trended downwards throughout 2024, suggesting a gradual improvement in global supply chain conditions compared to the severe disruptions experienced in previous years. This improvement was attributed to factors such as:
The Global Supply Chain Pressure Index has eased, but further disruptions are anticipated in 2025
• Easing of port congestion: Reduced delays at major ports worldwide.
• Declining transportation costs: A decrease in shipping rates and air freight costs.
• Improved component availability: Reduced shortages of key components and raw materials.
This indicates a reduction in supply chain pressures compared to the previous year, reflecting a return to pre-pandemic levels. Looking ahead to 2025, the GSCPI is expected to face fluctuations due to ongoing geopolitical tensions and potential supply disruptions. Factors such as the U.S.-China rivalry, import taxes, climate change, and cybercrime will continue to impact global supply chains, making it crucial for businesses to build resilience and diversify their operations.
Figure 7
← Click on figure to enlarge
According to Bain & Company, reshoring activities accelerated in 2024 compared to 2022, as more companies sought to bring their supply chains closer to home. Two-thirds of survey respondents indicated plans to shift operations away from China, with most opting for a split-shoring approach. However, only 2% have fully completed their reshoring initiatives, while 75% are either in the planning or implementation stages.
Figure 8
Reshoring activities
A deeper analysis of the supply chain market segments reveals only moderate growth in 2025, with significant variations across different sectors. While the global contract logistics and express parcel markets continue to expand at an annual rate of 2% to 5%, the European road transport sector is seeing little to no growth.
Figure 9
Total European road freight market growth 2014-2028
Although capacity utilization in road transport improved in 2024 compared to 2023, as shown by the Timocom Transport Barometer, this was primarily driven by a reduction in available capacity due to bankruptcies, fleet downsizing, and labor shortages rather than actual freight growth. Rising fuel costs, stricter environmental regulations, and ongoing driver shortages are increasing operational expenses and limiting capacity expansion. Additionally, economic uncertainty, inflation, and sluggish consumer demand have dampened freight volumes. To illustrate the challenges in the sector, in the third quarter of 2024, transport recorded the highest increase in bankruptcies (28.8%), followed by information and communication (15.3%) and accommodation and food services (9.8%) (Eurostat 2024)
Figure 10
Contract logistics and express parcel services benefit more from continued e-commerce growth, increasing demand for last-mile delivery, and advancements in automation and warehouse technology. However, the pace of expansion in these sectors remains moderate, reflecting broader economic headwinds and supply chain challenges.
Figure 10
Global contract logistics market size 2024-2028
Figure 11
Global express parcels market size 2024-2028
In ocean freight, Houthi rebel attacks heavily impacted the ocean freight market throughout much of 2024, particularly causing tariff spikes during the summer.
Although a looming overcapacity in the ocean freight market could drive significant price erosion in 2025, several factors may counterbalance this trend. Geopolitical uncertainty, new tariffs, potential strikes in the US and other regions, shifting carrier alliances, and stricter sustainability regulations could introduce additional costs and volatility.
Consumer behavior will continue to evolve in 2025. The direct-to-consumer (DTC) market continues its rapid expansion, emphasizing the need for a digital-first strategy. Consumers are placing greater importance on product origin, ethical sourcing, and sustainability, pushing supply chains to enhance transparency and traceability. Additionally, the growing demand for personalized products and services necessitates the adoption of advanced technologies that enable greater customization and a more tailored customer experience (Supply Chain Management Review).
2024 was a pivotal year for sustainability, marked by stricter regulations and heightened corporate accountability, particularly in the European Union. The Corporate Sustainability Due Diligence Directive (CSDDD) emerged as a cornerstone regulation, designed to hold companies accountable for negative environmental and human rights impacts across their operations and supply chains.
Similarly, the Corporate Sustainability Reporting Directive (CSRD) introduced mandatory reporting of Scope 3 emissions for many companies, significantly raising the bar for understanding and reducing indirect emissions. Throughout 2024, companies focused heavily on gathering Scope 3 data to prepare for compliance in 2025.
Beyond regulation, the EU is also advancing taxation policies to drive sustainability. Starting in 2024, the Emission Trading System (ETS) expanded to include the shipping sector. By 2027, a new Emission Trading System (ETS2) will include road transport, buildings, and other sectors, with emissions monitoring and reporting beginning in 2025.
Despite these regulatory advancements, economic challenges such as inflation, recession risks, geopolitical uncertainty, and skepticism stemming from greenwashing concerns may have contributed to the perception that sustainability is becoming a lower priority for some businesses.
In 2024, artificial intelligence (AI) and automation became pivotal in transforming supply chains, as companies increasingly embraced smart technologies to optimize operations, enhance decision-making, and reduce human error.
AI tools also played a crucial role in monitoring disruptions in real-time, allowing businesses to react swiftly and minimize downtime. In logistics hubs, the adoption of warehouse robotics and automated transport systems became standard practice, significantly improving efficiency. Big data and analytics have been further developed as essential tools for supply chain management, offering companies real-time insights that helped optimize inventory management and enhance demand forecasting.
KPMG underscores that half of supply chain organizations are investing in AI and advanced analytics, highlighting the profound impact of AI and automation on modern supply chains. These findings stress the importance of strategic AI integration and responsible implementation to optimize supply chain operations and ensure long-term benefits. The anticipated breakthrough of AI Agents in 2025 is expected to be particularly significant for supply chains. These agents function as advanced AI assistants—intelligent systems designed to collaborate with humans, providing support and guidance across various activities and decision-making processes.
In 2024, the logistics and supply chain sectors continued to grapple with significant labor shortages, as illustrated in figure 13. While operational activities faced the most severe shortages, planning and dispatching roles were also heavily impacted.
Figure 13
Workforce shortage categorized
intensity and supply chain area
The driver shortage was particularly acute, with 425,000 open positions in Europe in 2024, according to Stifted (2024). This challenge was compounded by an aging workforce and the sector’s difficulty in attracting younger generations to pursue careers in logistics.
In response, companies increased their investments in talent development, emphasizing training in automation, artificial intelligence (AI), and data analytics to adapt to new technologies. As the logistics industry becomes increasingly reliant on data-driven processes, the demand for knowledge workers with expertise in data analytics and technology has surged. However, attracting these profiles has proven particularly challenging, as logistics must compete with other industries often offering higher salaries. This competition has made data-savvy professionals some of the hardest roles to fill.
Looking ahead to 2025, the labor outlook remains challenging. While automation will partially alleviate workforce pressures, it will not provide a complete solution. Additionally, rising protectionism and stricter immigration policies may further hinder the logistics sector’s ability to attract talent from abroad. In some countries, the growing impact of climate change is evident in reduced worker productivity as temperatures surpass critical thresholds (S&P Global 2024).
In the long term, the industry will confront an even more significant challenge. As the population aged 65 and older expands, the active workforce will shrink, placing substantial pressure on retirement systems and workforce availability—especially in Europe. If immigration restrictions remain in place or tighten, this demographic imbalance could intensify more quickly, posing a critical problem not only for the logistics sector but also for the broader economy.
Figure 14
Projections of active vs. retired population in the Euro area
Seven Recommendations for 2025
Based on the previous observations and considerations, these recommendations to businesses active in supply chains can be made for 2025.
# 1 – Do not miss the AI and technology train
By 2025, AI will transition from early adoption to widespread integration across supply chains. Organizations are expected to increasingly leverage AI for predictive analytics, logistics optimization, and supplier performance management. The emergence of Generative AI is poised to enhance demand forecasting, dynamic pricing, and supplier selection, enabling companies to better anticipate and mitigate supply chain disruptions.
AI will also play a critical role in boosting workforce productivity, a necessity as talent becomes harder to attract. Additionally, AI will support the seamless integration of automation into operations, further driving efficiency and adaptability in supply chain management.
Further digitalization efforts to increase visibility and real-time granularity and to better accommodate the omni-channel experience will remain key.
#2 – Supply chain resilience and risk management should be a daily priority
Managing supply chain risks and enhancing resilience must become a daily priority for every organization. This proactive approach is the most effective way to anticipate and respond to disruptions and crises. Key strategies include:
- Advancing digitalization: Improve supply chain visibility and achieve real-time data granularity.
- Exploring reshoring options: Consider reshoring or nearshoring to mitigate supply chain risks.
- Supplier diversification: Broaden your supplier base to reduce dependency and vulnerability.
- Building trust and partnerships: Foster strong relationships with supply chain partners to enhance collaboration.
- Strengthening cybersecurity: Protect your supply chain from cyber threats with robust measures.
- Understanding the changing customer behavior: customer is looking for more direct-to-customer, faster delivery, more personalization and ethical sourcing.
Figure 15
Resilience measures in implementation
#3 – Partnering up, not squeezing down
During periods of overcapacity in the logistics market, shippers often seize the opportunity to push prices lower through more frequent tendering processes, continuous benchmarking, and short-term contracts. However, this approach typically leads to shrinking profit margins for logistics service providers and transportation companies. In a highly competitive market, this pressure can drive some providers to bankruptcy.
Adding to the challenge, Western European logistics companies face intensified competition from Eastern European drivers, who typically have lower average wages. This combination of factors risks further reducing Western European logistics capacity, potentially causing shortages when economic activity rebounds—similar to what occurred after the COVID-19 lockdowns. Building strong partnerships with logistics service providers is essential to avoid these pitfalls. Long-term contracts, ideally spanning at least three years, allow providers to invest in the relationship and allocate capacity reliably for their clients. Such agreements also foster trust and collaboration, creating a foundation for sustainable and mutually beneficial partnerships.
#4 – Learn to trust your supply chain partners
To better anticipate future supply chain disruptions, partners must embrace greater collaboration within an ecosystem. Such an ecosystem serves as a structured and compliant platform that connects supply chain stakeholders—including suppliers, customers, and even competitors—to facilitate the exchange of relevant data and information. According to Transporeon’s Pulse Report, trust remains essential for fostering strong partnerships that enhance supply chain resilience and agility.
Figure 16
Key factors for creating successful collaborative relationships
#5 – Make sustainability a strategic advantage, not just a compliance obligation
With increasing ESG regulations, companies may be tempted to focus solely on compliance rather than integrating sustainability into their long-term strategy. However, sustainability should not be seen as a regulatory burden but as an opportunity to drive efficiency, innovation, and resilience.
Many technologies required to achieve fossil fuel independence in supply chains are still in development and will not be fully mature by 2025. This should not be an excuse to delay action. Waiting for a perfect business case may lead to missed opportunities and increased long-term costs. Instead, companies should proactively invest in sustainability initiatives that not only meet regulatory requirements but also enhance operational performance and competitiveness.
Sustainability efforts must go beyond adopting greener technologies. They require a fundamental shift in mindset, deeper commitments, and stronger collaboration within industry ecosystems. This is particularly critical for decarbonizing supply chains and advancing circular economy practices, where long-term partnerships and systemic changes are essential for lasting impact.
#6 – Prepare for a shifting workforce landscape
With demographic trends, increasing immigration restrictions, and even climate change affecting labor availability, workforce shortages will continue to challenge supply chains. Companies must find ways to maintain productivity while ensuring a sustainable and healthy work environment. To navigate this shift, a multi-faceted approach is essential (Supply Chain Management 2024). These might be some of the components of such an approach:
- Embrace Automation: Implement automation solutions that complement human workers by handling repetitive tasks, allowing employees to focus on higher-value activities.
- Leverage AI & Generative AI: Utilize AI-driven tools to enhance decision-making, streamline operations, and improve workforce productivity across all levels.
- Invest in Retention & Upskilling: Strengthen employee development programs and provide targeted training to equip workers with the skills needed for evolving job roles.
- Improve Working Conditions & Compensation: Address wage and working condition challenges, particularly in highly competitive sectors like transportation, to attract and retain talent.
- Adapt to Evolving Workforce Profiles: As supply chains become more data-driven, companies must anticipate a shift from operational roles to knowledge-based and analytical positions.
#7 – Manage supply chain costs with greater granularity
As noted earlier, building a more resilient supply chain that is less vulnerable to risks may come with higher costs. To address this, companies should invest in a more granular understanding of their cost-to-serve. This involves analyzing the cost implications of various products, customers, and supply chain channels to ensure fair and sustainable practices, avoiding undue pressure on supply chain partners. (KMPG 2025)
Conclusion
The defining shift from 2024 to 2025 is the rise in geopolitical uncertainty. Any expected economic recovery in 2025 is likely to be modest, if it materializes at all. As uncertainty grows, households may adopt a more cautious approach, favoring savings over consumption. While economic performance will vary by region, financial instability — and above all, geopolitical tensions — will be key factors influencing supply chains.
References
Bain & Company (2024), Reshoring activities in 2024 compared to 2022
Descartes and Sapio Research (2024), What Companies are Doing to Tackle Escalating Global Supply Chain Challenges
Drewry Supply Chain Advisors (2025), Drewry World Container Index
Europe Commission (2024), The future of European competitiveness: Report by Mario Draghi
Eurostat (2023), EUROPOP2023 – Population projections at national level (2022-2100)
Eurostat (2024), Increase in bankruptcies and registrations in Q3 2024
Ernst & Young (2025), EY Geostrategic Outlooks for 2024 and 2025
Federal Reserve Bank of New York (2025), Global Supply Chain Pressure Index
International Monetary Fund (2025), World economic outlook
KMPG (2025), Six supply chain trends to watch in 2025
McKinsey & Company (2024), Supply chains: Still vulnerable
Our World in Data (2024), Annual greenhouse gas emissions including land use
Prologis (2025), Supply Chain Outlook Report 2025
S&P Global (2024), Labor: A critical component of supply chains under growing pressure
Stifted (2024), Supply chain & logistics: Turning ‘Lost in Transit’ into ‘Right on Time’
Supply Chain Digital (2024), Top 10: Trends of 2024 in Supply Chain
Supply Chain Management Review (2023), The Evolution of Demand: Navigating the ‘New Customer’ in the Supply Chain Landscape
Supply Chain Management Review (2024), Tariffs, talent and the supply chain in 2025
Trading Economics (2025), Euro Area Manufacturing Index PMI
Trading Economics (2025), Euro Area Service Index PMI
Ti (2024), Global Contract Logistics Market Size & Forecasting: 2024-2028
Ti (2025), European Road Freight Transport Market Forecasts: 2024 & 2025
Timocom (2025), Transport Barometer
Transporeon Pulse report (2024), Act before the storm: Navigating the storm clouds in Transportation Management
World Economic Forum (2023), IEA: More than a third of the world’s electricity will come from renewables in 2025
World Economic Forum (2025), Global Risks Report 2025
