Global trade uncertainty reshapes supply chain strategy in 2025, note industry veterans at Prologis’  Groundbreakers conference

As global trade has seen significant shifts in a short time across 2025, coupled with the ongoing need for supply chains to build resilience and speed and become ever more agile, the role of the supply chain has subsequently evolved to being able to respond in short order to various things, including geopolitical tensions, climate events, labor shortages, shifting energy demands, and emerging technologies like artificial intelligence.

Those were some of the takeaways from a session this week at Prologis’ annual Groundbreakers event, which was held in Los Angeles, with Gene Seroka, Executive Director at the Port of Los Angeles, and Yossi Sheffi, Professor of Engineering Systems, at MIT. The session was moderate by Dan Letter, Prologis President.

Seroka put the ongoing trade uncertainty into perspective, noting that since January more than 100 trade and tariff announcements have come out of Washington, creating what he called a roller coaster effect in 2025.

“When hard trade policy came out, people slammed on the brakes, and imports fell off a cliff,” said Seroka. “When that policy was softened, and deadlines were extended, we started to see freight [levels] pick up again, and that is kind of what we have seen this year, although the story goes back all the way to the campaign trail last year, when this tariff and policy discussion began.”

As for his take on what may be in store in 2026, Seroka said it depends on a few different things, noting that GDP expectations and workforce and employment data is “buoying” along at the moment, as evidenced by four sub-par months of jobs numbers, with jobs numbers for September not expected to be issued tomorrow, due to the federal government shutdown.

“We kind of see exactly what we heard back in January from companies,” he said. “One with the uncertainty of trade policy, I don't know if we're going to get a new announcement in two hours, two days or two months, so I'm going to hit the pause button. I'm going to try to make sure I have ample inventory. If I'm a retailer, but I'm not going to overbuy for fear of having steep markdowns after the holidays. If I'm a part supplier for American factories, I'm going to keep a steady but low flow, because the downside is if I stop buying parts that go to a car maker in Detroit, and I risk shutting down a line that could be between $2 million and $4 million an hour in lost costs and wages and not worth the bet.”

Looking at supply chain resilience, Sheffi explained that the primary problem related to it is uncertainty, noting that the supply chain has seen in in various ways before, including the pandemic and ongoing geopolitical issues, among others.

When talking about resilience in today’s supply chain, Sheffi said that low costs and supply chain supporting revenues are always key topics.

“Resilience is a term from material science regarding the ability of any material to return to its former shape after deformation,” he said. “Here we are talking about the ability of an organization to get back to the same KPI being a level of service or a level of manufacturing, after some kind of disruption. That is the essence, the essence of resilience. But honestly, supply chain managers are good at it, that it's much better than what you read about in the in the press.”

From POLA’s perspective, Seroka said that of the 125,000 companies that import through the port annually basis, but no one has more than a 5% share, calling it a pretty flat curve of people to bring their products in, coupled with only a couple dozen that are the big, national and international named brands at the retail level.

“Most of our customers are small-to-medium sized businesses, some family businesses for generations, dipping into their savings to pay now 1.5-to-2 times the amount for the products that they're trying to buy, compared to pre-April or pre-January levels,” he said. “This is where I'm starting to see the level of discomfort when it comes to resilience. How far can you go? You can't necessarily pass that cost on, because then you are competing with the big brands. And if you're a parts supplier, and you kind of miss a week or two and run the risk of shutting down that line, you have real problems, too. So, the great majority of these companies are really living week to week based on that uncertainty and how much it's going to cost them to buy the goods that go on to their customers and consumers.”

To that end, Sheffi commented that companies remain focused on being strategic, like pre-buying before a deadline takes effect and trying to build inventory when prices are low, with the caveat that it is not a long-term solution. These types of approaches, he said, can keep companies in business for a while, but many businesses are currently living week to week, making these approaches essential.

“Today’s supply chain isn’t just about low cost or supporting revenue—it’s increasingly about resilience and sustainability,” said Sheffi. “Resilience costs money. I often ask business leaders, 'do you buy insurance?' Building resilience is better than insuring against failure.”