What to expect in 2025 – 3 key forecasting questions for your supply chain

The world of logistics has felt the full force of disruption over the course of 2024, with economic, geopolitical, and environmental challenges giving supply chain leaders a vast array of problems to solve.

Led primarily by the situation in the Red Sea, disruption has forced businesses to adjust and find new levels of resilience in a number of different ways, including front-loading cargo and adopting strategic storage solutions.

Now looking ahead to 2025, there are a number of question marks hanging over the year that could determine the nature of a company’s logistics strategy. Here are three key forecasting considerations heading into the next 12 months.

Will Chinese New Year have a softer impact?

The Chinese New Year period typically has a significant impact on global supply chains, with factories in the country closing and production slowing down dramatically. It means that businesses rush to get orders out of China before the festivities begin, followed by a slack period of demand when operations resume.

However, will we see the same pattern emerging in 2025?

Disruption saw businesses advance their cargo throughout 2024 to bring it to European shores as soon as possible, resulting in the traditional peak season shifting in the summer months.

This in turn had a knock-on effect in the final quarter of the year, with unexpected demand coming to light in normally slower months. It suggests that businesses could once again be advancing cargo ahead of Chinese New Year in an act of planned resilience.

If that is the case, traditional peak demand in January could be weaker than seen in previous years and free up typically tight capacity – although, as outlined below, the improving economy could bring demand back to normality.

Will the economy increase demand?

Despite businesses potentially front-loading cargo ahead of Chinese New Year, available capacity could well be filled by businesses forecasting a successful 2025 based on the economic situation.

According to Goldman Sachs, the global economy is expected to grow solidly, with worldwide GDP increasing by 2.7%. Add that to inflation falling to a projected 1.8% in 2025, lower interest rates, and stabilising energy prices, and it could result in consumers having more disposable income in their pockets (Federal Planning Bureau).

Businesses forecasting higher consumption in 2025 could look to build higher inventory levels than in previous years, and therefore turn to strategic warehousing options to feed an eager market.

Higher inventory levels for businesses could also mean that import demand continues to be strong in the first half of 2025, but that much remains to be seen and will depend on just how accurate the economic projections are in the new year. A gamble that doesn’t pay off could result in a supply-demand imbalance that needs to be rectified.

Will foreign reliance increase?

Throughout 2024, we’ve observed something of a slump in Europe’s manufacturing services. The continent’s manufacturing Purchasing Managers’ Index (PMI) has stayed below growth levels of 50.0 for the majority of the year and fell to 45.2 in November.

According to Trading Economics, there are a number of factors that have contributed to the result: “The reading pointed to another deep contraction in the manufacturing sector. Output declined, sharper reductions were recorded for new orders and workforce numbers decreased markedly, and to the largest degree since August 2020.”

At the same time, production levels in China and the United States of America remain strong, which could result in increased demand out of both countries in 2025. The US, however, will soon implement new political policies that could certainly have an impact in this area and on wider global trade.

Stay tuned for more on what to expect in 2025 on Logistics Insights.