2025 Predictions for the Transport and Logistics Industry

As we prepare to bid farewell to 2024, the transport and logistics sector is poised for a transformative 2025. From embracing innovative technologies to prioritising sustainability and workforce development, the industry must adapt to a rapidly changing global landscape. Here’s a look at the trends and opportunities we expect to shape the logistics industry in 2025.

Mergers and Acquisitions (M&A): Strategic growth through consolidation

Consolidation will remain a key trend in the logistics sector in 2025. The focus will likely shift towards strategic acquisitions designed to enhance technological capabilities, expand geographic reach and build more resilient supply chains.

While M&A activity is forecast to continue at similar levels as in 2024, it may be influenced by emerging market dynamics and factors such as the measures introduced in the UK’s Autumn Budget. Companies operating in Asia, Africa and Latin America are likely to play a significant role in this wave of consolidation. Businesses specialising in last-mile delivery, automation, and data analytics will become prime targets as logistics firms look to boost efficiency and meet evolving consumer expectations.

Recent insights from BDO's Q3 2024 M&A Market Review for the Logistics and Supply Chain sector highlight a strong recovery in deal activity, with 27 transactions completed in the quarter, including the £2.7bn acquisition of Evri by Apollo Funds. Of these, 44% involved overseas acquirers, underscoring a robust international appetite for UK assets. However, the ongoing economic environment, marked by rising business costs and the UK’s budgetary measures, may still shape the pace and structure of M&A activity in 2025.

Technology: AI, Digital and Cybersecurity Take Centre Stage

In 2025, advanced technologies will redefine the logistics and supply chain industry. Digital freight platforms, which connect shippers and carriers in real time, will also expand. By improving efficiency and reducing costs, these platforms will become essential tools for small and large businesses alike.

Logistics providers will continue to look at how AI-powered platforms can help with optimising route planning, inventory management. They will also examine how predictive analytics can deliver cost savings and operational efficiencies. The use of these ‘digital twins’ to create virtual models of supply chains will enable companies to simulate disruptions, test strategies and streamline operations with unparalleled precision.

Warehouse space marketplaces may be fuelling the ‘race to the bottom’ as manufacturers and retailers return to ‘just in time’ rather than ‘just in case’. The digitalisation of the marketplace will stretch into the freight transport sector that has been slow to adopt the technology to date.

Cybersecurity 

As logistics operations become increasingly digitised, cybersecurity is increasingly critical. Protecting sensitive data and ensuring the integrity of connected systems will require substantial investments and industry collaboration to combat cyber threats.

A stark reminder of this risk came as recently as November 2024 when Blue Yonder, a major supply chain software provider, fell victim to a ransomware attack. The incident disrupted operations for numerous clients, including major UK supermarket chains Morrisons and Sainsbury’s, which faced significant supply chain disruptions during the peak shopping season. Such incidents highlight the vulnerability of infrastructure and the cascading impact of cyber-attacks across global supply chains.

The cybersecurity threat is further exacerbated by continued geopolitical tensions. Russia has the capacity to launch cyber-attacks aimed at shutting down power grids in the UK. This is a stark warning of the potential risk to infrastructure from targeted attacks. This "hidden war" of cyber aggression underscores the need for businesses and governments to adopt robust cybersecurity measures, share intelligence and invest in stronger systems. Cybersecurity is not just a technical challenge; it is strategic cornerstone of for resilience in the future.

Sustainability: Decarbonisation and Circular Supply Chains

Sustainability will be another cornerstone of the logistics industry in 2025, driven by strict regulations and growing consumer demand for greener practices. Logistics providers will continue transitioning to electric vehicles (EVs), adopting alternative fuels and integrating autonomous transport to reduce carbon emissions.
The adoption of alternative fuels, such as hydrogen, will gather pace, as demonstrated by DHL, which piloted hydrogen trucks in 2024. However, the extent of this shift will depend on grid capacity, advancements in hydrogen infrastructure and the significant investment required to scale these technologies.

Circular supply chains promoting waste minimisation and material reuse will also gain traction as companies strive to meet net-zero targets. Typical activities include improved packaging, reverse logistics, and remanufacturing initiatives.

We expect more partnerships between logistics providers and tech companies to deliver innovative solutions like AI-driven carbon tracking tools and smart charging grids for EV fleets. Sustainability will no longer be a differentiator - it will be a competitive necessity.

Workforce Dynamics: Addressing Labour Shortages and Upskilling

Labour shortages will be a significant challenge for the logistics sector in 2025. Businesses will need to adopt proactive strategies to attract and retain talent. Investing in training programs for roles involving AI, robotics and data analysis will be essential as technology increasingly transforms logistics operations.

Enhanced safety measures and more flexible working arrangements will play a crucial role in addressing workforce challenges, particularly in warehousing and long-haul trucking. Additionally, the use of autonomous vehicles and drones is expected to grow, helping businesses address gaps in labour-intensive areas and mitigate the impact of ongoing labour shortages.

Resilience: Adapting to Geopolitical and Economic Uncertainty

As in 2024, economic volatility and geopolitical challenges will require logistics companies to be resilient 2025. The incoming Trump administration has announced plans to implement a Day One executive order introducing sweeping tariffs of up to 25% on imports from Canada, Mexico and China. Despite officially relating to issues of illegal immigration and drug smuggling, the tariffs are likely to significantly disrupt global supply chains. Businesses reliant on cross-border trade may face increased costs and delays and should look to adaptive strategies. China and other nations have warned of potential retaliation fuelling concerns about a broader international trade war creating further uncertainty for global commerce.

Businesses are likely to respond by diversifying their sourcing strategies, reducing reliance on single suppliers and expanding nearshoring initiatives to mitigate potential risks. Integrating multiple modes of transport, including air, sea, rail, and road, will enhance supply chain agility and reduce vulnerability to disruptions. Developing more resilient supply chains will not only help safeguard operations but also provide a significant competitive advantage in an increasingly uncertain global market.

E-Commerce: Redefining Last-Mile Delivery

E-commerce will remain a driving force behind the growth of the logistics sector, with an emphasis on speed, reliability and customer-focused solutions.

Strategically located micro-fulfilment centres will play a key role in enabling same-day and even ‘in a hour’ deliveries to bring products closer to customers. Drones and autonomous robots are expected to take on a larger role in last-mile logistics as regulatory frameworks evolve to accommodate these innovative delivery solutions.
 

Real-time tracking, flexible delivery options and sustainable choices such as carbon-neutral shipping will increasingly become standard offerings as will the personalised experiences that customers now demand.

 

Looking Ahead: Embracing Change and Unlocking Opportunities

The logistics and transport sector in 2025 is primed for a dynamic evolution. To remain competitive, companies must embrace cutting-edge technologies, adopt sustainable practices and build resilience into their operations.

Customer expectations, from transparency to speed and sustainability, will continue to shape industry priorities.

By leveraging technology, businesses can enhance visibility and deliver exceptional experiences to their customers.

As the logistics landscape becomes more complex, those who anticipate and adapt to these changes will unlock new growth opportunities and thrive in this transformative era and as always it is important for any business operating in the space to stay ahead of the curve. 

We apply the practical expertise and knowledge gained from managing in-house and outsourced operations to provide commercial advice. Our specialist team has a combined 100+ years' worth of experience. 

Reach out to Adam Gaunt to discuss how we can help you overcome challenges and seize opportunities.