Another year and another season as we work to keep our supply chains resilient and ready and try to figure out what the year will look like. Recently, DHL Express released a survey on hundreds of small and medium-sized enterprises' plans for 2025, and 2025 is unpredictable.
Overall, everyone seems pretty optimistic about overall performance in 2025 and 2024. While there may be uncertainty about new regulations, policies and geopolitical factors, 67% expect better performance in 2025.
It's no surprise that it's small and medium-sized businesses that are getting the most attention, as it seems everyone from consumers to Fortune 500 companies are paying attention to tariffs. The incoming presidential administration has discussed imposing tariffs at length, and with the actual percentage of tariffs still uncertain, it was the top concern for 67% of respondents.
The survey found that "while 40% of businesses are still assessing how regulatory and policy changes will impact their growth, views are divided on their potential impact. 24% believe regulatory changes are likely to have a negative impact on growth, while 20% of people believe these changes will have a positive impact. Notably, trade regulations (67%) are cited as the most important area for corporate regulatory change in 2025, indicating the continued importance of international trade considerations.”
Just two weeks into the new year, 30% of respondents expect to make minor adjustments to their supply chain strategy in 2024. An impressive 13% of respondents are prepared to significantly adjust their approach. This leaves 57% wanting to keep their strategy the same no matter what happens.
Speaking of growth, which is what everyone wants to hear about shippers, 40% of respondents said the biggest opportunity will be expanding into new markets. 31% of respondents cited economic improvements and implementation of new technologies (14%) as the most important growth areas.
2025 appears to be the year that will test supply chain resilience and shippers’ ability to adapt to new strategies. It will depend on how quickly logistics service providers can adapt to new policies, regulations and who knows what else.
TRAC Tuesday. This week's TRAC route is from Philadelphia to Chicago - two large freight markets with tight load balances. One benefit of this lane is that spot rates are relatively low compared to the National Truckload Index. The lane costs just $1.62 per mile compared to NTI, which costs $2.55, almost a dollar more.
Philadelphia and Chicago remained relatively stable in outbound bid rejections—with weekly changes of less than 30 basis points. Historically, long-haul routes have been less receptive to carriers. Therefore, spot rates may need to rise slightly to allow carriers to participate in the 758-mile trek.
Who is with whom. The never-ending war continues—the war over whether brokers should be held liable when an accident or other incident occurs with the carrier they hire. The latest development in the debate is a ruling by the U.S. Court of Appeals for the Seventh Circuit in favor of 3PLs and freight brokers. The issue was again brought before the Supreme Court, which refused to entertain it for the third time.
The latest dismissal comes in the wake of a case in which both plaintiffs and defendants asked the Supreme Court to review lower court findings. John Kingston explains why in a FreightWaves article: "TQL said in its petition for certiorari that the 11th U.S. Circuit Court of Appeals was correct in ruling to protect 3PLs. But because of conflicting circuit decisions, TQL wrote in its petition , “The issue raised is one of considerable importance to the transportation industry. "
The main sticking point appears to be whether the carrier is an “agent” of the broker or an “independent contractor.” When a carrier can be classified as the broker's agent, it is easier for the broker to be held liable. The primary test of the relationship definition is whether the broker retains the right to control delivery methods, hiring decisions, and many other factors.
With two circuits supporting 3PL and one circuit (the Ninth Circuit) opposing, negligence in such cases is indeed decided on a court-by-court basis. There is legal precedent for both outcomes. So while the Supreme Court doesn't want to get involved in this fight yet, I think one day it will have to.
One consensus among the lower courts is that the key lies in how the relationship between the carrier and broker is defined when a load is awarded.
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