The global logistics sector, having experienced a year of stabilisation in 2024, is now navigating through a “fog” of persistent economic, geopolitical, and environmental pressures, with 2025 poised for “fragile optimism”.
The State of Logistics Report, released by the Council of Supply Chain Management Professionals (CSCMP) and authored by Kearney, highlights that while technological integration and a continued focus on resilience and sustainability drive cautious advancement, uncertainties, particularly those stemming from new tariff trade tensions, remain front and centre.
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For Southeast Asia’s burgeoning tech and logistics landscape, these global shifts present both challenges and significant opportunities.
Macroeconomic Crossroads and Tariff Tornadoes
The global macroeconomic situation is marked by diverging growth trajectories and inflationary pressures. While the United States anticipates moderating real GDP growth of around 1.7 to 1.8 per cent in 2025 and Europe expects a slight acceleration to 1.3 to 1.5 per cent, emerging and developing Asia is forecast to grow robustly at 3.6 per cent. This strong regional growth, supported by stable domestic conditions and robust external demand, positions Southeast Asia as a key player in the evolving global trade narrative.
However, the spectre of “tit-for-tat tariff actions” is set to become an integral component of international trade policy, disrupting global supply chains. The report warns that these tariffs could increase the landed cost of goods, force shifts in sourcing decisions, and create entirely new global trade flows.
Ocean and ports are identified as the most vulnerable transport modes to tariff impacts. The elimination of the “de minimis” tariff exemption, notably affecting US imports, is already forcing major shifts, with Chinese e-commerce giants like Temu suspending direct shipments from China to the US and Shein moving to a “local fulfilment model”. This could lead to a redirection of trade volumes and a re-evaluation of supply chain partners across Asia.
The tech imperative: AI, automation, and data as growth drivers
Technology, particularly artificial intelligence (AI) and automation, is identified as a critical enabler for the logistics industry to boost margins and value. AI implementation is expected to penetrate deeper into logistics operations, acting as an inflexion point to counter declining productivity gains and boosting global GDP.
Logistics firms increasingly adopt AI for real-time inventory visibility, decision-making, and optimising demand planning, inventory management, and delivery routes.
Examples abound: Flexport is leveraging generative AI for document parsing, processing 15,000 shipping documents monthly and slashing costs from US$5 to US$10 per document to mere cents.
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CEVA Logistics is partnering with Google to optimise vessel routing and container handling using AI. In warehousing, greater automation, including robots and autonomous systems, is mitigating labour shortages and enhancing productivity. This technological push opens significant avenues for Southeast Asian tech startups to develop and deploy tailored AI and automation solutions for regional logistics players.
E-commerce’s Relentless Rise and the “Barbell Effect”
E-commerce continues its relentless rise, with global online retail sales nearing US$6.3 trillion in 2024, intensifying competition across parcel and last-mile delivery. Consumer preferences reveal a “barbell effect,” splitting demand between ultra-fast delivery for essentials and ultra-low-cost, slower shipping for non-essentials.
Chinese platforms like TEMU and Shein aggressively grew their US e-commerce gross merchandise value by over 75 per cent and 60 per cent, respectively, in 2024, focusing on budget-friendly, slower delivery models. As these dynamics ripple globally, Southeast Asia’s vibrant e-commerce market will likely see similar pressures for diversified delivery options and cost-efficient solutions.
Resilience, relocation, and opportunities for Southeast Asia
The post-pandemic era, coupled with heightened geopolitical tensions and new trade policies, has shifted companies’ focus from short-term cost savings to long-term strategic priorities: resilience, flexibility, and growth. Supplier diversification and production relocation are becoming key strategies.
The report explicitly notes that semiconductor-adjacent tech firms are considering shifting both assembly and full production from China to Southeast Asia, driven by tariff pressures and customer demand for supply base diversification. A prime example is Apple, which has already moved production to Vietnam and India in response to the US-China trade tensions and tariffs.
Furthermore, while nearshoring to Mexico struggled in 2024, Asian low-cost countries and regions (LCCRs) successfully filled the gap between demand and supply, with trade increasing by US$90 billion (ten per cent) in 2024. This underscores Southeast Asia’s growing strategic importance as an alternative manufacturing and sourcing hub, demanding agile logistics partners and robust infrastructure.
Sustainability: Balancing compliance with business case
The sustainability landscape in logistics is becoming increasingly complex, marked by divergent regulatory approaches. While the European Union enforces stricter mandates, the United States adopts a more voluntary, market-driven approach.
However, companies exporting to Europe and Asia, including many in Southeast Asia, will still be required to comply with stringent sustainability reporting standards, such as those under the EU Carbon Border Adjustment Mechanism (CBAM).
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This growing focus on tangible return on investment (ROI) means companies are revising sustainability targets to align with cost savings. Technology, including IoT, blockchain, and AI, is proving essential in achieving these dual goals by optimising resource use and tracking emissions, offering transparency and efficiency. This pragmatic approach to “green logistics” creates opportunities for tech startups developing solutions for emissions tracking, route optimisation, and sustainable supply chain management in Southeast Asia.
Sectoral dynamics: A glimpse across the board
Air freight: After a “banner year” in 2024 with 8.6 per cent growth, volumes are projected to slow to 5.8 per cent in 2025. Policy changes like the de minimis exemption removal will prompt shifts to bulk freight, impacting express air cargo.
Ocean/ports: Global ocean freight demand increased by 4.5 per cent in 2024, driven by frontloading, but demand growth is expected to slow to 3 per cent in 2025, with supply outpacing it, leading to reduced rates. Alliance restructuring and tariffs continue to reshape trade flows.
Third-party logistics (3PLs): Increasingly critical, 3PLs are expanding services to provide end-to-end support, adopting AI and automation for greater flexibility and resilience.
Warehousing: The US market stabilised in 2024, with higher vacancy rates and slowing construction. Labour stability and technology use are boosting productivity, while the threat of new tariffs is prompting some stockpiling of inventory.
Charting the course for Southeast Asia
As the global logistics sector navigates this complex and uncertain environment, agility, strategic planning, and aggressive technology adoption will be paramount. For Southeast Asia, the emphasis on supply chain resilience, the shift in manufacturing away from China, and the region’s strong economic growth projections represent a significant window of opportunity.
Tech startups in Singapore and across the region are uniquely positioned to innovate and provide digital tools, automation solutions, and supply chain visibility platforms that will enable businesses to adapt faster and grow smarter in this new era of global trade.
The future of logistics will undoubtedly be shaped by those who can convert uncertainty into strategic advantage.
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The post Through the fog: Why 2025 holds ‘fragile optimism’ for global logistics appeared first on e27.









