How European logistics is adapting to a shifting trade landscape

European Update 2025

Since President Donald Trump moved into the White House, shock waves have been sent across the Atlantic toward Europe. There is great concern that the trans-Atlantic alliance is under threat as the United States turns away from Europe and more toward Russia.

And with the announcement and implementation of U.S. tariffs and trade restrictions, the risk of a global trade war and the end of free global trade is growing, introducing new consequences for the transport and logistics industry as well. Readjusting the compass and preparing for challenging times is now the motto of many companies in Europe.

Indeed, the trade war between the U.S. and Europe escalated after President Trump announced the prospect of tariffs on imports from the EU—and the EU Commission announced its intention to respond. This would particularly affect the automotive industry in Europe, which is currently undergoing a severe crisis and transformation.

European car manufacturers are looking to the U.S. with great concern, as they’re being targeted by President Trump, who has cited unfair competitive conditions and an imbalance in trade with the EU in his threats of 25% tariffs. This would have a double impact on the European automotive industry, as the EU is also likely to take reciprocal measures.

Accordingly, the leading car manufacturers are preparing for this new challenging situation. As far as logistics service providers are concerned, it also means that they must adapt to new vehicle flow patterns.

At the Automotive Logistics Forum in Dresden organized by the German Logistics Association (BVL) and the German Automotive Industry Association (VDA) in February, a strong trend toward localization became evident. For example, Simon Motter, head of group logistics at Volkswagen Group, said he expects a change in volume flows when the tariffs come into force.

The VW Group logistics specialist emphasized that the car manufacturer will increase its footprint in North America. For example, a new plant for the Scout brand will be built near Columbia, S.C. The company is also in the process of building a battery factory in Canada.

“We see North America as a growth market,” says Motter. “The local for local concept is absolutely right, especially in value chains and with volumes like ours. There, we will make sure that our regionally sourced share increases.”

The change in cargo flows also means new challenges for European automotive ports. Europe’s leading automotive gateway—the Belgian ports of Antwerp and Zeebrugge—handled nearly 334,000 fewer finished vehicles in 2024.

According to the ports, lower vehicle demand and longer transit times caused by attacks on vessels in the Red Sea were among the reasons for the 3.4% drop in total ro-ro volumes compared to 2023. New cars declined by 9.4% to 3.2 million units in 2024.

European ports are looking ahead

While automotive was a challenging business for the ports, growth and stabilization characterized the container handling development in the three leading European ports last year.

This is illustrated by container throughput in Europe’s largest port, Rotterdam, which rose 2.8% to 13.8 million TEU in 2024. Port of Antwerp-Bruges was also able to gain market share among the Northern Range ports with an increase of 8.1% in container throughput at a total of 13.5 million TEU.

Germany’s largest port—Hamburg—achieved slight growth of 0.9% over 2024 and 7.8 million TEU. At 685,000 TEU, container traffic with the U.S. contributed to this result with an increase of 5%.

Poland’s largest container hub, the Port of Gdansk, achieved an increase of 9% and reached 2.2 million TEU in 2024. The port has developed into a leading logistics and port location in recent years. Laying the foundation stone for the T3 Transshipment Terminal last year marked the start of the next expansion phase at the Baltic

The expansion of the terminal with a third deep-water quay and the extension of the storage areas is a strategic step on the way to becoming one of the largest container terminal complexes in Europe. The T3 terminal is scheduled to be completed and operational by the end of 2025. Another key project currently underway and expected to be completed by 2028 is a deep-water container terminal in Swinoujscie close to the German border.

The Baltic Sea has also become important as a route for the supply of energy resources such as liquefied natural gas (LNG) from the U.S. and Qatar. With the expansion of the LNG Terminal in Swinoujscie, completed this January, the port is now capable of re-gasifying over 8 billion cubic meters of gas annually and becoming a leading LNG hub in Europe.

In times of wars and terror attacks, cyber incidents also became a big issue for the ports. Daily cyberattacks impact the entire supply chain due to the close data and communication networks of the various logistics parties. Progress was made in 2024 in strengthening the resilience of the port and the supply chain via the port of Rotterdam.

To better withstand these threats, the port authorities under the Dutch Seaports Association (BOZ)—Groningen Seaports, North Sea Port, Port of Rotterdam, Port of Moerdijk, and Port of Amsterdam—have decided to collaborate with companies in their regions to enhance the digital resilience of the port ecosystem.
Stichting FERM, a non-profit foundation primarily focused on cybersecurity and cyber resilience and already active for the ports of Rotterdam and Moerdijk, will be transformed into a national cyber-security platform for the Dutch seaports united in the BOZ.

According to Boudewijn Siemons, chair of this initiative and CEO of Port of Rotterdam Authority: “Cybersecurity is critical to the continuity and security of our ports. At a time when digital threats are becoming more sophisticated, we must take proactive and concerted action to protect our infrastructure and operations. Only by working together can we strengthen the resilience of our ports and prepare for the challenges of the future.”

Challenges of e-commerce

E-commerce is booming in Europe and the United States. According to the digital research firm Statista, the e-commerce market in the U.S. is projected to reach $1.34 trillion in 2025, while in Europe it’s expected to grow to $707.90 billion.

This boom has brought high growth to air cargo in particular, but is also leading to major problems with uncontrollable imports of low-value goods—especially from big Chinese e-commerce providers such as Temu and Shein. According to reports, they’re currently flooding the markets with cheap products and exploiting the previously liberal customs limits.

In 2024, around 4.6 billion low-value consignments (worth €150 or less) entered the EU market—equating to around 12 million parcels a day. Similar to the de minimis regulation announced by the U.S. administration for packages worth $800 or less, the EU Commission is also planning new regulations. In order to meet these challenges, the Commission is pushing for a stricter enforcement of the EU’s product safety and environmental rules and is calling for closer coordination between customs and market surveillance authorities.

Ensuring that e-commerce imports comply with EU standards is a priority. A key measure is the removal of the €150 de minimis exemption, which currently allows imports of low-value consignments to enter the EU duty free. The Commission’s plan is in alignment with the EU customs reform currently underway.

The objective of the reform is to modernize customs procedures and strengthen control capacities. It’s anticipated that the EU Customs Data Hub will be introduced as part of the reform. The Hub is designed to centralize and streamline customs reporting, with the aim of enhancing the detection of non-compliant products before they reach EU consumers.

Additionally, the Commission is exploring the possibility of introducing a handling fee for e-commerce imports. This would ensure that the costs of customs enforcement are fairly shouldered by importers rather than EU taxpayers. The evaluation of the proposals, which are part of an EU draft law for a comprehensive reform of customs legislation, is being carried out with the support of the co-legislators, the EU member states and their national authorities—as well as responsible industry players, consumer associations, and international partners.

According to freight experts, the U.S. and EU proposals to remove de minimis duty exemptions could be a major blow to the air cargo industry, which has benefited from the e-commerce boom.

“This would lead to higher import costs for retailers and consumers, significantly increase customs and administrative costs and possibly shift air cargo flows,” Martin Habisreitinger, COO airfreight at Hellmann Worldwide Logistics, told the German transport newspaper DVZ.

Furthermore, it would have a negative impact on airlines’ freight rates. “In the short term, we can expect a reduced demand for air cargo and correspondingly falling rates,” Habisreitinger added.

Timo Stroh, who heads the airfreight committee at the German Freight Forwarding and Logistics Association (DSLV), expects significant overcapacity. “If that happens, it can’t be ruled out that we’ll see a lot of parked freighters,” he warns.

Despite the tense geopolitical situation, the air cargo industry reported record demand in 2024.

According to the International Air Transport Association (IATA), full-year 2024 global demand, measured in cargo ton-kilometers (CTK), increased 11.3% (12.2% for international traffic) compared to 2023 and exceeded the record volumes set in 2021.

Full-year capacity in 2024, measured in available capacity ton-kilometers (ACTK), increased 7.4% compared to 2023 (9.6% for international operations).
The European carriers performed well in 2024 with an 11.2% year-on-year demand growth for air cargo, while capacity grew by 7.8% year-on-year. The boom is being driven by the strong development of e-commerce and various restrictions in ocean shipping, which have led to growing demand for air cargo, says Willie Walsh, director general of the IATA.

For 2025, IATA is forecasting slower global growth of 5.8%, in line with historical averages. Walsh expects that the air cargo industry will be challenged to adapt to the unfolding geopolitical shifts, as the Trump administration has shown a strong interest in using tariffs as a policy tool that could have a double whammy on air cargo—boosting inflation and deflating trade.

Data from ACI Europe shows that European airports are also on a path back to pre-pandemic levels. Freight traffic across the European airport network increased dynamically in 2024 at 13.2% over the previous year—with EU+ airports growing by 12.4% and non-EU+ airports by 18.4%. Overall, freight traffic was 11.8% higher than pre-pandemic (2019) volumes.

The top 5 European airports for freight traffic in 2024 were: Istanbul (1.97 million tons/39.6% vs 2019); Frankfurt (1.95 million tons/-2.5% vs 2019); Paris CDG (1.87 million tons/-1.3% vs 2019); London Heathrow (1.53 million tons/-3.2% vs 2019); Amsterdam Schiphol (1.49 million tons/-5% vs 2019); and Liège (1.15 million tons/+28% vs 2019).

Istanbul has replaced Frankfurt as the busiest European airport for cargo. The Turkish iGA Istanbul Airport became a significant gateway between Europe, North Africa, the Middle East, and Central Asia for domestic and international carries and logistics companies.

One of the major international players is FedEx Express, which has invested in a new 25,300-square-meter dedicated facility at iGA Istanbul Airport. The new facility includes three parking positions for FedEx aircraft, space for 32 vans; seven truck doors; and will use state-of-the-art sorting technology with capacity to handle 3,000 pieces per hour.

The new FedEx facility is also designed with separate parcel and freight processing, benefiting customers that want to bundle both types of shipments on a single network with a single interface. Operations are scheduled to start in 2025.

“Get Brexit done”

The UK has not been part of the European Union for five years now. January 31, 2020, is a historic date for Brexit. “Get Brexit done” was promised by the Conservative Party, but it turns out that after half a decade, the impact of Brexit is still being felt by the logistics industry.

The sluggish border control procedures are still an obstacle in trade with the EU, according to the organization Logistics UK that represents more than 20,000 businesses. “The introduction of the new border controls over the last 12 months has been far from smooth, with constant changes to deadlines and lack of clarity over precisely how the new procedures were being implemented,” says Nichola Mallon, head of trade and devolved policy at Logistics UK.

Logistics UK is urging the government to consider the sector’s experience when developing their future trade strategy and to listen to its members and take into account the operational needs of the logistics industry to avoid trade barriers.

This comes as the final phase of the Border Target Operating Model (BTOM) has been implemented, which requires Safety and Security Declarations for imports from the EU. Nichola Mallon emphasized that the government needs to learn from the challenges and lack of clarity experienced during the introduction of new border controls.

Mallon suggests that by engaging with the logistics industry, which has the expertise in understanding barriers to trade, the government can design and implement a trade strategy that streamlines and expands trade more effectively. A comprehensive review of the EU-UK Trade and Cooperation Agreement has been demanded.

From the political side, Brexit was accompanied by major promises, which were not implemented satisfactorily from the perspective of the British population and economy. In January 2025, for example, 55% of respondents in a survey by the research institute YouGov said that leaving the EU was wrong. Only 30% still consider

Professor Jonathan Portes, of the “UK in a Changing Europe” think tank, also came to a very clear conclusion about Brexit in his latest report: “Overall, economists’ characterization of Brexit as a ‘slow puncture’ rather than a ‘car crash’ has been vindicated.”

Five years after Brexit, it’s still unclear which direction the UK will go. In terms of closer ties with the EU, UK politicians are repeatedly drawing “red lines,” while the EU doesn’t want to allow any economic concessions to the UK in the form of “cherry-picking.” However, there are attempts at rapprochement.

At this year’s World Economic Forum in Davos, EU trade commissioner Maroš Šefcovic suggested that Brussels is open to the UK joining the Pan-Euro-Mediterranean (PEM) Convention to strengthen trade relations. The PEM Convention, which includes the EU and 24 other countries—such as Norway, Algeria and Ukraine—allows materials sourced from any PEM country to count as originating in the country of manufacture of the final product.

For UK companies, participation would mean that they could use components from any PEM country and still qualify for tariff-free trade under preferential agreements. This would provide valuable support for industries such as automotive, chemicals, and food production, where complex cross-border supply chains are the norm.

There have been positive reactions from industry associations and business organizations, such as the British Chambers of Commerce, as they hope that PEM membership will simplify supply chains, reduce bureaucracy, and increase trade efficiency.

PEM could provide significant value if it can operate alongside the rules of origin requirements set out in the UK-EU Trade
and Cooperation Agreement (TCA). This dual framework would allow UK and EU exporters to choose the most favorable conditions to qualify for
tariff-free access.

However, too much rapprochement with Europe could jeopardize the U.S.-UK trade deal that President Trump has suggested during Prime Minister Keir Starmer’s visit to the White House earlier this year. This “real trade deal,” which Trump says could happen “very quickly,” would help the UK avoid U.S. tariffs and insulate the UK from the direct impact of global trade tensions.

Dagmar Trepins is European correspondent for Logistics Management. She is based in Denmark.