Threat of Port Strikes on the US East Coast and Gulf
The U.S. logistics market is expected to be heavily impacted by the threat of strikes at U.S. East Coast and Gulf Coast ports from the beginning of the year (in fact, it has already started). The two major issues between labor and management, wage hikes, have been won by the union, and the remaining issue of port automation has raised the likelihood of strikes significantly, leading to a logistics disruption. The unions, backed by Trump, argue that port automation will lead to job losses and that hacking of automated equipment could jeopardize national security, while the companies argue that automation is necessary to limit land use and improve competitiveness. The unions have Trump's support, and the companies have their own agendas, so there is very limited room for compromise, and it is highly likely that the unions will eventually exercise their power. Therefore, logistics disruptions may occur due to the surge in volumes ahead of the Chinese New Year (1/28-2/4) and service disruptions due to the launch of new alliances and networks.
The Trump presidency
The inauguration of President Trump is expected to have a widespread impact on the logistics market. Furthermore, the influence and repercussions are anticipated to be extensive and severe.
Sourcing geographic diversification accelerated by sanctions against China
It is expected that tariff policies aimed at countering China will be strongly pushed forward, accelerating the geographic diversification of sourcing to regions such as India, Vietnam, Southeast Asia, and Mexico. Therefore, there is a need to explore strategies for entering and strengthening the logistics markets in these regions. Meanwhile, there is currently no competitive region or country capable of replacing China as the "world's factory," so China's position in the logistics market is unlikely to be easily undermined.
U.S. Logistics Market to Grow as On-shoring, Re-shoring
The pressure to attract manufacturing plants to the U.S. is expected to intensify in order to reduce the trade deficit, foster manufacturing, and create jobs. This will inevitably lead to an increase in investment and manufacturing in the U.S., which is expected to further expand the logistics market centered in the U.S. On the other hand, the Biden administration tried to attract manufacturing through subsidies through the Inflation Reduction Act (IRA), but the Trump administration is planning to attract manufacturing through pressure and threats through tariff policies, which will further complicate the investment decisions of manufacturers.
High tariff policy may reduce trade volume
The US-centered logistics market is expected to grow due to on-shoring and re-shoring, but indiscriminate tariff policies aimed at curbing China, resolving trade deficits, and solving political and social issues such as drugs may lead to a decline in global trade volume. The effects of tariff policies occur gradually over time and are not expected to cause a sharp contraction in the short term.
Deportation of illegal immigrants could lead to labor shortages and higher logistics costs
Trump's second-term policy of deporting illegal immigrants is likely to lead to labor shortages and higher wages in the warehousing, trucking, and last-mile deliver
sectors in the short term. This will lead to higher logistics costs, which will negatively impact logistics activity.
Continued growth of e-Commerce
The growth of the e-commerce market is expected to continue despite the imposition of high tariffs in the US and changes to the de minimis policy. This is because e-commerce goods from China are already cheap enough, Americans are accustomed to cheap Chinese goods, and alternatives to circumventing U.S. regulations, such as using homes as logistics centers, continue to develop. However, how long e-commerce demand will continue to be shipped by air is a separate question. This is because in the past, e-commerce demand has often started by air, but then shifted to shipping via sea containers after a period of time.
Fear of a sharp economic downturn due to political unrest in South Korea
Due to the extremely unstable political situation in South Korea, including the declaration of martial law and the impeachment of the president, economic activities in all sectors are shrinking as companies postpone or cancel investments, resulting in a sharp economic downturn, which may lead to a decrease in export and import volumes.
Expanding KE's market influence
As the largest cargo carrier on the Pacific route, KE's acquisition of OZ's passenger routes, in addition to its existing long and short-haul passenger and cargo routes, will increase its competitiveness in terms of schedule, punctuality (especially on passenger aircraft), and capacity on both long and short-haul routes. Competitiveness is expected to increase significantly, further expanding its market power. In particular, KE is expected to dominate the express delivery market, which relies heavily on passenger airplanes.
Productivity innovation is expected with full-scale application of AI such as AI Agent
In 2025, the latest artificial intelligence technologies such as AI agents are expected to be introduced to the logistics industry in earnest, revolutionizing work efficiency and productivity. The application of AI technology will contribute significantly to optimizing work processes and increasing the accuracy of logistics management.