The logistics sector was taken for a ride in 2025, as U.S. tariffs rewrote the typical shipping playbook. From a rush to a draught, the shipping cadence was upended as retailers reacted to erratic trade policies. Meanwhile the end of de minimis in the States stopped the daily deluge of duty-free packages into the country. And a short-lived shipping fee tit-for-tat between the U.S. and Chinese set off weeks of reroutings, vessel affiliations and fresh anxiety. Every disruption has had a cumulative effect on retail timing, assortments and pricing.
The unprecedented demand patterns and financial strain have put freight capacities and costs in question, slowed capital expenditures and put a renewed focus on the benefits of AI as carriers try to adjust along with the ups and downs.
“As long as we continue to see that level of uncertainty and difficulty of planning to any sort of longer time horizon, we’ll continue to see the volatility play out in logistics markets as well,” said Jess Dankert, vice president of supply chain at the Retail Industry Leaders Association (RILA). “The shipping supply chain rhythms this year have really been very different from usual. And that’s saying something, because the last five years, since 2020, we’ve been continually in supply chain disruption of one flavor or another.”
The Logistics Managers’ Index bears this out as it tracks the unprecedented product flow. In September, the LMI showed the lowest recorded transportation utilization ever, which stands in contrast to the typical boom that occurs as retailers prepare for the holidays.
“The ocean carriers, air freight, all the carriers out there are really having a pretty disappointing fourth quarter of 2025,” Dankert said.
She said the industry is recognizing that incorporating technology, particularly artificial intelligence, into decision-making is key, given the number of complex variables supply-chain teams now juggle. And further complications are almost certain. Without a crystal ball, it’s impossible to know what those challenges will be — and that’s exactly the point.
In response, Dankert expects carriers to remain cautious in their planning, keeping capital expenditures to a minimum in the short term. “Because of the uncertainty and the wariness of trying to make any sort of significant long-term plans, you won’t see very much aggressive behavior around making really big investments or plans, whether it’s in warehousing or from a transportation market standpoint,” she said, adding they’re mostly “hedging existing bets.”
As for the future, Dankert said shippers are busy strategizing, building contingencies for the next inevitable shock. And given the size, severity and frequency of disruption over the last few years, logistics executives are leaning more on technology to help them game out how to recognize, mitigate and respond to threats.
Dankert said AI and machine learning are table stakes at this point when it comes to forecasting and planning. These tools allow merchants to weigh and consider a range of variables, like weather, economics and population shifts to create multiple scenarios. And as the tech evolves, so do its capabilities.
“The really exciting opportunities that we’re seeing are where retailers are exploring this agentic AI for supply chain planning and putting in place these agents that are taking all that data and making decisions — with human oversight, obviously — and the degree to which that can continue to make the supply chains more responsive and able to react to these different shocks and disruption that we continue to see,” she said.
Though the latest challenge was short lived, it just illustrated how much disruption can bloom up with little notice. In place for barely three weeks, the port fees the U.S. put on Chinese-built and operated vessels in an attempt to curtail the country’s dominance in this market triggered a reciprocal response from Beijing and resulted in reroutings and fresh anxiety across logistics chains bracing for yet another avoidable choke point.
Now paused until Nov. 9, 2026, the ceasefire doesn’t signal an end to scrutiny of China’s shipbuilding super dominance and what the U.S. government alleges are “unfair foreign practices.” China controlled 53% of global ship orders by tonnage in the first eight months of 2025, whereas the U.S. slice of the pie was almost nonexistent at 0.1%. A Section 301 investigation driven by labor unions, including the United Steelworkers, is still underway and fees could return.
But even a temporary timeout lifts an immediate pressure point on retail supply chains contending with a crowded docket of disruptions from tariffs to shifting trade lanes, Dankert said.
“We’re very pleased they’ve been put on hold on both sides,” she said. “Even on the China side and the ports there, [we’d] been seeing more congestion because of just shifting around and having to shift ships on different lanes to try and avoid exposure to those fees – just additional disruptions to the supply chain, and in large part, kind of self-inflicted.”
It is still unclear how much was collected during the brief window the fees were active, costs some carriers absorbed and others passed along to cargo owners. Hawaii-based shipping company Matson reported $6.4 million in costs from reciprocal Chinese fees in just three weeks and estimated it could have paid $80 million annually over the next two years, CEO Matthew Cox said on a November earnings call. China’s COSCO faced an estimated $1.5 billion a year in U.S. liabilities, according to Reuters.
Whether any collected payments can be clawed back remains murky. Matson’s Cox said last month that the company was awaiting further direction on that issue from the U.S. Trade Representative and the China Ministry of Transport.
“I don’t know that there’s any precedent” for refunds, Dankert said, noting that carriers are likely already consulting lawyers. “But from the retailer’s standpoint … it’s good to not have that kind of additional cost hanging over their heads. In many cases, those costs get passed onto the retailers, the cargo owners, which adds cost to the broader retail supply chain picture, which is never helpful.”
Having a yearlong timeline matters, Dankert said. Earlier, shorter pauses of 30 or 90 days on tariff policy implementation left companies unable to build realistic planning models. Now, they “have a bit more of a runway.”
For retailers, the suspension offers breathing room but not a solution. The fees could come back in a year, be renegotiated or paused again, Dankert said.
The uncertain timeline comes as the industry marks two years of Red Sea and the Suez Canal diversions, which have resulted in longer shipping routes and increased costs. Despite these pressures, logistics firms seem resolved to this new normal. At this point, Dankert said, the disruption is “kind of status quo,” adding there aren’t a lot of other options.
Safety concerns aside, she said, there’s currently no financial motivation for rerouting ships. “If you were to reopen the Red Sea and Suez Canal, that would free up a lot of capacity with those shorter voyages. And then that becomes a kind of market problem, because you flood more capacity into the system when rates are already not particularly high.”
So instead of rushing back, carriers continue in “wait and see” mode.
“At this point, if you were to overnight try and flip a switch and reroute everything back through the Red Sea, that would create significant disruption. So, I think what you’ll see eventually, if traffic does return to the Red Sea, is a gradual movement back,” she explained.
No sudden changes are expected as stakeholders watch for a Supreme Court ruling on the legality of tariffs enacted by the Trump administration under the International Economic Emergency Powers Act. Dankert is among many who don’t expect the decision to materially change how retailers plan or the administration’s trade policy going forward.
“Trade actions will likely continue to be a cornerstone of the administration,” whatever the court decides, she said. “Retailers are focused on scenario-planning and ensuring that whatever the particular trade landscape looks like, they have these flexible, resilient supply chains that can respond to whatever the uncertainty and geopolitical shifts may be.”
