2025 is off to a dynamic start, with Inauguration Day just around the corner. It looks like this year won’t be a quiet one, with major shifts already underway.
What should shippers focus on this year? Here’s a concise breakdown of key developments impacting the logistics landscape.
Tariffs on the rise
Foreign producers are rushing to beat potential import tariffs that President-Elect Trump is expected to reinstate. While the exact timelines and details are unclear, the return of heightened tariffs—possibly 10% on Chinese imports and 25% on goods from Mexico and Canada—could have a significant impact on supply chains. Moreover, his recent announcement of the creation of an “External Revenue Service” to collect revenue from these tariffs seems to confirm this direction for the coming years.
The mere threat of universal tariffs sets off a scramble to avoid them, which leaves the global trading system vulnerable to bottlenecks, higher costs, and disruption in the event of an economic shock. And don’t forget that there are also pending definitions on de minimis exemptions for imports of products below a certain value.
USPS Ends Support for UPS SurePost
As of January 2, 2025, the USPS/UPS Negotiated Service Agreement (NSA) is no longer in effect, leaving shippers with unexpected consequences. SurePost labels for P.O. Boxes and military post offices addresses will now be rejected without prior notice. This abrupt change means shippers must use direct USPS shipping or workshare partners who still rely on USPS for final delivery to these addresses.
Under Louis DeJoy’s leadership, USPS has been phasing out workshare partners since mid-2024. While the industry has been anticipating the changes, the lack of communication and contingency planning has left many shippers scrambling. SurePost has now aligned its rates with UPS Ground, eliminating its cost advantage for time-flexible deliveries.
This situation – which was entirely preventable with better planning and customer focus from UPS – highlights the importance of proactive planning. If you can absorb another cost increase, staying with SurePost may work. But now it wouldn’t hurt to explore alternatives and optimize your strategy.
Amazon’s Next Big Move
Isn’t that what we are all wondering? After relaunching Amazon Shipping in 2024 and introducing Amazon Haul, the question is: Which will be the Seattle giant’s next move in the logistics area?
One positive note: Amazon announced no new fulfillment fee increases for third-party sellers, a win for businesses leveraging its logistics capabilities without straining their budgets.
On the carrier front, Amazon will continue to monetize its unmatched infrastructure, as seen with Amazon Key. This service now allows third-party carriers, like Veho, to access enabled properties. Will access to Amazon Key become essential for competitors? If so, who will build a rival network?
Global Supply Chain Disruptions
Unforeseen “black swan” events have become the norm in global logistics. From Covid-19 to Houthi attacks on the Red Sea, disruptions now seem inevitable. Early in 2025, wildfires near Los Angeles are already impacting West Coast operations. And the year has just begun. The lessons from recent years have driven the adoption of digital solutions to improve communication, data sharing, and tracking. These tools will be crucial in managing the inevitable challenges ahead.
While “expect the unexpected” may sound like a cliché, it’s the reality of today’s supply chain. What’s not a cliché is your ability to take control. With an expert assessment of your shipping cost structure, you can improve margins and build resilience.
Plan Smart, Stay Flexible
Adapting to rising costs and unpredictable changes doesn’t have to be overwhelming. By refining your shipping strategy, you can stay flexible and protect your bottom line. Not sure where to start? Contact me at eds@betachon.com for a quick, no-strings-attached shipping strategy review. Let’s work together to ensure 2025 is a year of smarter, more efficient logistics for your business.