In today’s global trade environment, unpredictability, volatility and working with unknowns have become very common. Supply chains, particularly those relying on Asia, that once followed predictable patterns are now under constant pressure. Not only are geopolitical unrest and volatile trade policies making planning harder but climate-related disasters (wildfires, drought, etc.) also have direct effect on the challenges of planning in the supply chain.
With the start of the Covid pandemic, the traditional seasonality the shipping industry was accustomed to was lost. This is posing many challenges for not only the logistics industry and shipping world but for the general public.
In the good old days, the typical year used to run like this for many product groups.
- January: Chinese New Year shipment rush starts; demand increase is followed by freight rate increase.
- February: Chinese New Year slowdown, rates crater.
- March: Factories are back, and shipment volumes start to increase, rates start to move upwards
- April: Pre-peak season rush starts; rates get stronger.
- May to October: Busiest shopping season, back to school and Christmas orders, PSS, GRI rates at their highest levels.
- November to mid-December: Shipping slowdown, inventory counts start, freight rates start its downward trend.
This trend has been broken – first from the Covid pandemic and then from back-to-back disruptions. Other than the first few months of the Covid pandemic, none of the other disruptions added this much uncertainty and confusion as the events that we have faced so far in 2025.
2025 might go down as one of the most challenging years for supply chain resilience and planning due to the below reasons.
- Increased Geopolitical Instability: the recent Israel-Iran conflict, potential closure of the Strait of Hormuz, ongoing issues in the Red Sea, and potential future risk from tensions in the Taiwan Strait are only some of the issues that are going on right now.
- Disrupted Shipping Routes: Ocean freight and transit times have been affected by the rerouting of vessels. It has been almost two years since the attacks in the Red Sea started with no end in the horizon. Longer transit times and congestion at major transshipment ports have persisted.
- Weather-Related Disruptions: Draught risk in Panama Canal, hurricanes in Asia and wildfires are all contributing to the disruptions in supply chain planning more than ever.
- Tariff policies: The real effects of the recent tariff policy changes by the U.S. have had a tremendous direct effect on shipments and it still remains as the biggest risk contributor to shipment planning in 2025. Tariffs have had a direct impact on everything from demand planning to the macro economy as it is a big trigger for inflation due to increased costs of imported products.
The above factors have had a major impact on supply chain resilience and planning. Even after tariff deals are completed between the U.S. and other countries, companies will continue to embrace the just-in-case inventory model in order to get ahead of the increasing risk associated with global events.
It is not possible to avoid the external, macro events and companies can only mitigate so much risk.
There are still some general, time-tested and basic precautions and actions that can be taken to navigate the current challenges.
- Bigger pool of supplier base: It has been discussed on many other occasions, but diversification has become the most critical aspect of building a resilient supply chain. This comes with additional costs and many risks (quality, on-time delivery, and communication). However, without this, the chance of survival for companies is very little.
- Embracing technology to improve supply chain visibility: Visibility platforms and predictive simulation models have had great improvements in recent years and companies should take advantage of this to be more proactive.
- Keeping extra inventory: To absorb the fluctuations on a macro level, extra inventory would help go through challenging times or at least mitigate the problems that come with potential global shipping disruptions.
- Investing in relationships: This is an old one but continues to be important. For all stakeholders involved, building increased and genuine long-term relationships will help to be in the know and help to take proactive actions. Don’t be too focused on the lowest product price or the $50 rate difference amongst the shipping partners.
- A more proactive approach: It’s not enough to keep up with the news or watch current trends. Companies need to think ahead—anticipating future risks, mapping out potential disruptions, and figuring out how to respond before they hit. That’s what separates a reactive supply chain from a resilient one. Have a game plan.
We are going through extraordinary times.
The costs are impacted by global events where one has very little control over. It has become evident that a new game plan must be in place to be ahead of the game. Supply chain planning has never been harder, but the good news is that sticking to basics and utilizing ever-advancing technology will help mitigate current challenges.
