Navigating Market Cycles: A Procurement
Leader's Guide to Logistics Planning
At its core, logistics is about getting products to the consumer. As the last link in the chain, logistics affects both top-line growth and bottom-line costs, impacting profitability more than almost any other operational category. The share of logistics costs in the U.S. GDP climbed from 8.7% in 2023 to 8.8% in 2024, totaling $2.6 trillion. This suggests a persistent elevation of logistics expenses compared to the pre-COVID era. When logistics fails, the impact ripples through the entire business, as disruptions often lead to substantial cost increases and reduced customer satisfaction.
As consumer expectations increase and global market dynamics grow increasingly complex, organizations must treat logistics as their foundation for sustainable growth. This means moving beyond traditional efficiency metrics to build resilient supply networks that can transform disruption into opportunity.
Understanding Market Dynamics
Truckload pricing follows a documented 18–24-month pattern, alternating between carrier and shipper-favorable conditions, a consistent trend spanning two decades. Signs now point to an important shift: after an extended period of shipper-favorable pricing at the cycle bottom, indicators suggest inflationary pressure will return in Q3 2025. This cyclical pattern has remained remarkably consistent across varying economic conditions. And with the global logistics market expected to grow at 7.2% annually through 2030, we’re looking at increasing pressure across all shipping modes.
Yet predictable cycles operate alongside external forces, particularly in election years that introduce trade policy uncertainty. Our research shows the 2018 tariffs caused ocean freight rates to spike 70% before returning to pre-tariff levels by late 2019. As of June 2025, tariffs are at 25% with Mexico/Canada and 30% on China, creating multiple uncertainties across global supply chains.
We’ve seen big tariff proposals come and go during past elections, and while they don’t always materialize, companies can’t just sit back and hope for the best. Top performers are taking their “what-if” planning to another level, evaluating not just cost mitigation strategies but potential network redesigns. Some organizations are even considering pulling out of certain markets entirely, where potential cost barriers could make certain lanes unsustainable.
Ocean Freight: A Concentrated Market
Ocean freight operates under different dynamics. While 580,000 carriers populate the truckload market, just 10-12 major carriers control ocean freight, supported by freight forwarders and NVOCCs (Non-Vessel Operating Common Carriers) who broker capacity without owning vessels. This concentration leads to significant volatility in shipping rates, influenced by external factors such as geopolitical tensions and port congestion.
While global container volumes are projected to grow by 3%-4% in 2025 and 3.5%-4.5% in 2026, the ocean freight market remains susceptible to sharp rate swings and a changing tariff landscape, both of which complicate financial planning and forecasting. When carriers cut capacity in May 2025, trans-Pacific rates surged — Shanghai to Los Angeles jumped 117% over four weeks, while Shanghai to New York climbed 96% before stabilizing in early June. Smart procurement leaders are increasingly leveraging data analytics to time their contracts effectively around these fluctuations.
Building Partnerships That Endure Market Swings
Recent events offer valuable lessons in strategic timing. Effective logistics procurement extends beyond market timing to establishing partnerships capable of weathering cycles. For truckload carriers operating in a fragmented market of 580,000 players, consistent, predictable volume often outweighs rate premiums. By providing carriers with regular shipping patterns and accurate forecasting, organizations enable better network optimization and service levels. When carriers can plan effectively, they often provide more stable pricing across market shifts.
Looking Forward: 2025 and Beyond
Multiple factors will shape logistics through 2025-2026:
- Rising pricing pressure across transportation modes
- Potential interest rate decreases, making automation investments more feasible
- Advancing technology integration and data flow enhancement
- Greater focus on durable supplier relationships
- Shifts in sourcing away from China to other Asian countries, near-shoring, or moving manufacturing to the US
But perhaps most importantly, success requires breaking free from “tribal knowledge” — those unchallenged assumptions that drive decisions without data.
When geopolitical tensions and labor strikes drove ocean freight rates up by 20%–30% in mid-2024, many companies locked in long-term contracts at inflated prices. Instead, we recommended pausing the RFP process for one client and using the spot market, which offered more competitive short-term rates.
This approach avoided overpayment and allowed them to secure stable, long-term pricing once the market returned to equilibrium. By embracing market agility, the client not only mitigated costs but also preserved operational flexibility during a volatile period.
A Different Approach to Procurement
Traditional consulting often means forcing template solutions onto unique business challenges. Real value comes from listening first, understanding pain points, technology constraints, and organizational culture, before proposing solutions. This is where companies such as LogicSource are well situated and suited. Our partnership approach and focus on delivery provide the right asset to a company’s distribution organization.
The right solution isn’t always about savings — the most successful logistics programs balance immediate needs with long-term capability building. Sometimes, that means making strategic investments that might not yield immediate ROI but unlock significant growth potential. One of our retailer clients approved a West Coast distribution center that appeared cost-neutral on paper but created 30% more capacity for growth. This investment ultimately provided the infrastructure necessary to scale operations and meet rising demand.
About the Author
Erik Given
Managing Director, Distribution & Logistics
Erik brings extensive leadership experience in Logistics and Transportation Management, having worked with Heineken, Henkel, and Sysco before joining LogicSource as Managing Director of Distribution and Logistics.
With a track record of success in strategic planning, inventory management, distribution center operations, and process optimization, Erik excels in driving efficiencies and delivering results. His expertise spans logistics, transportation management, customer service, and supplier negotiations, making him a key asset in shaping innovative supply chain solutions.