Much like the years following the pandemic, 2024 brought a litany of supply chain challenges, some of which could continue into 2025.
Freight stakeholders have already witnessed mixed signals at the start of 2025. While there is something to rejoice with the ILA-USMX standoff finally coming to an end, an unexpectedly strong winter storm was expected to cripple ground logistics operations across the East and Gulf coasts this month. The only reprieve for the latter is that it comes during the slow season, so shippers may not be too worried about it.
Logistics brokers and providers like J.B. Hunt reported a slight increase in profit in the last quarter of 2024, although revenue dipped. Warehousing operators seem to have done well, as leasing prices have grown substantially in the last few months.
Continue reading to find out all the latest in the freight world.
Disruptive Winter Storm
A major winter storm is impacting freight operations on the Gulf Coast, bringing rare snowfall, ice accumulation, and frigid temperatures. Cities like Houston, New Orleans, and Mobile, Alabama, braced for disruptions, and airports suspended operations. However, these cities lack adequate infrastructure to handle snow and ice of this magnitude. People and businesses were told to expect power outages, travel disruptions, and significant service interruptions.
Winter storms have consistently disrupted the U.S. freight market, even more so than hurricanes in recent years. However, hurricanes impact supply chains during peak seasons, while winter storms usually occur during the slower shipping months. The heightened impact of winter weather on transportation highlights its ability to create backlogs and strain logistics networks, even without causing long-term infrastructure damage.
J.B. Hunt Resilience and Challenges
J.B. Hunt Transport Services reported mixed results for its fourth quarter amid challenging market conditions. Revenue declined 5% from $3.3 billion to $3.15 billion. However, profits edged higher year over year, reaching $155.5 million. Intermodal volumes hit record levels, rising 5%, yet revenue in the segment dipped 2% due to reduced rates and shifting freight mixes.
The trucking and logistics provider highlighted strong service performance, increased customer satisfaction, and resilience in a favorable freight market to shippers. Leadership has emphasized plans to push for higher contract rates in 2025 despite headwinds like weaker demand and minimal pricing leverage. They also expressed optimism about long-term recovery, pointing to improved bid pricing opportunities later in 2025.
A Second ILA Strike Averted
The International Longshoremen's Association (ILA) and the United States Maritime Alliance (USMX), aka the dockworkers’ employers, have reached a tentative six-year agreement, effectively averting a second strike at East and Gulf Coast ports. In the end, both parties seem to have gotten a fair share of their initial demands. The dockworkers get a 62% wage increase over the contract’s duration, raising the base hourly rate from $39 to $62, besides safeguards against using technology that could replace jobs.
The USMX will be allowed to deploy semiautomated cranes and robotic equipment. However, new installations will require corresponding job additions, ensuring no net reduction in staffing. The agreement also includes refined processes for introducing labor-saving technologies and balancing operational upgrades with workforce retention. All things considered, the contract represents a significant milestone in labor relations for the U.S. maritime sector.
Skyrocketing Warehouse Prices
Warehouse tenants renewing leases signed during the pandemic are facing steep rent hikes as prices for industrial spaces remain high. Average asking rents have risen by 61% since late 2019, reaching $10.13 per square foot in the fourth quarter of 2024. These hikes come as reduced construction of new warehouses has kept supply tight, sustaining rent pressure upward.
While some tenants secure concessions like free rent, most still pay significantly more than pre-pandemic rates. Companies looking to lower costs often face expensive moves to new facilities. For instance, luggage maker Away relocated its operations after its leasing costs were set to increase by 25%. The market’s constrained supply and long-term focus shape pricing trends even as demand normalizes.
Trade Tariffs
During his campaign, President Donald Trump signaled plans to alter trade agreements and introduce new trade barriers. Following his inauguration, automotive suppliers are now preparing for tariffs on imports from Canada and Mexico. Industry experts have mentioned that these could disrupt supply chains, with imported parts crossing borders multiple times during production.
To navigate tariffs, suppliers are advised to review their supply chains, explore industry collaboration, and consider shifting production to mitigate costs. Measures, such as relocating manufacturing, are long-term solutions, while others, like securing tariff exclusions or using foreign trade zones, offer immediate relief.
Run Better Logistics Operations with Wicker Parker Logistics
So much is at stake. Experts and industry leaders are unsure of the freight industry's future direction. However, one thing is certain: Your shipments cannot wait. This is why partnering with a solid logistics partner to navigate the coming months is a no-brainer.
Look no further than Wicker Park Logistics, a woman-owned logistics company and a WBENC Certified Business that is changing the narrative in the freight world.
Leveraging deep industry expertise, robust logistics and transport tech solutions, and a consultative approach, the company offers on-demand transportation across modes (FTL, LTL, flatbed, hot shot, reefer, etc.) and end-to-end visibility into every shipment. Get in touch for a quick quote today.
