World events have contributed to a tricky picture for the transport and logistics sectors in 2024. However, as Gov Kandola, Head of our Transport & Logistics practice, notes organisations in these industries can get ahead of the curve for next year with the right talent strategy.
Read on for Gov’s thoughts on the year that was, and what we can expect for 2025!
Let’s address the elephant in the loading bay: it’s been a tough year for the transport and logistics sectors. Much of this has come down to geopolitical events and tensions, which in turn have had considerable knock-on effects on the industries in which I work. Talent leaving the field, tempted by interest from other areas, has added to what has been a challenging time for many in this space. However, there are reasons for optimism as we look ahead to next year – let’s hope that things pick up.
As is now customary, I wanted to review this year’s action in the transport and logistics sectors, what it has meant for talent, and what might be on the horizon in 2025. Without further ado, let’s get into it!
World events have hugely affected these industries
In today’s globalised, interconnected world, it stands to reason that the geopolitical picture has a massive bearing on the performance and efficacy of the transport and logistics sectors. This year has been no different – unfortunately, for all the wrong reasons. Ongoing wars in Ukraine and the Middle East, as well as the Red Sea shipping crisis, have put considerable pressure on global supply chains. This has meant – you guessed it – increased costs, and it is far from certain when we will see a change in any of these situations.
Indeed, the instability has forced businesses to factor in uncertainty. Issues around inflation and the cost of living have hit markets and industries the world over, having negative effects on interest rates and, of course, the demand for goods.
Strikes have also had an impact
Rising prices generally have also contributed to the various strikes we’ve seen in the transport and logistics space this year. Workers across numerous ports and unions have pushed for increased pay and, in some cases, against the creep of automation into their workplaces. As such, there have been strikes across the docks in Montreal, the US, and among truckers in Germany. Shippers have sought to use air cargo to offset these disruptions, though one consequence is that air transport – already far from cheap, as logistics goes – has become busier and more expensive.
What has happened for candidates in 2024?
With such a complicated global picture for the industry, then, transport and logistics businesses have been reflecting on what they really need to thrive and push forward next year. Much of this, naturally, will come down to talent strategy. A lot of strong candidates have left, so businesses are doing all they can to hold onto their existing personnel. Organisations should understand that if they want good people, they need to have a strong understanding of the current market – that is, what they can offer candidates that other sectors cannot.
For instance, the pressure on global trade has increased the need for regionalised supply chains, which in turn calls for talent with expertise in specific territories and their local regulations. Finding the candidates with the specialised knowledge to manage cross-border complexities, however, is a challenge.
Separately, it is worth noting that sales and commercial teams have been perhaps the hardest hit by tricky landscape for transport and logistics talent this year. We saw restructuring take place in a number of organisations in response to the difficult picture, and even as the situation seems to be picking up, commercial and sales units are once again struggling. The integration of more advanced technology and data analytics into logistics has seen it competing directly with industries that have traditionally pulled in talent, such as finance and tech. Furthermore, the higher salaries offered by companies in these spaces have further compromised logistics organisations, making them lose out on top talent or have to significantly increase pay packets to attract them.
Driving talent strategy and executive search in transport and logistics for next year
My advice to companies looking to add new blood in 2025 would be to stay ahead of the curve and be selective when it comes to making additions. Return on investment should be forefront in the minds of hiring panels. Unless someone can really add value to an organisation, it is best to think twice about bringing them on board – especially amid a freight recession. Throwing a new hire in and hoping for the best is so much more costly and less efficient than doing due diligence, research, and headhunting passive candidates. Targeting candidates who are already working in the transport and logistics space will be good practice for hiring panels.
2025 predictions
Looking ahead to 2025, I think we are due to see a spike in private equity investment in transport and logistics globally. Various large investors are effectively sitting on money they’ve accumulated, and while some funds are definitely doing better than others amid the freight recession, this nonetheless creates an opportunity for stronger-performing funds to purchase struggling ones.
Separately, we are likely to see plenty of M&A action as companies move to consolidate their position while still looking to grow. Executive teams will be looking for talent with a background in handling mergers and acquisitions, proven track records of driving growth, and refinancing. As I discussed recently in my overview of the CFO role in transport and logistics, individuals who have experience dealing with banks are increasingly in demand in the C-suite. By contrast, there has been significant churn among talent at C-1 level and I expect this to continue into next year.
What of the global picture?
I began this roundup of 2024 by looking at geopolitics, and while predicting anything in such uncertain times is difficult, to say the least, it would be remiss of me not to consider some world events that are likely to have an impact on the sectors in which I work. The most obvious factor is the US, where a second Trump administration is likely to have a positive effect on domestic trucking, air cargo, and international freight forwarding. His focus on oil for energy production is likely to reduce inflationary pressures, which could lead to a greater drop in market rates and boost consumer demand.
The other side of this, however, is that the president-elect’s protectionist economic policy will have far bigger implications for transport and logistics. We will see a spike in air cargo due to market uncertainty, though in the long term this vertical could be affected by tariffs. The additional costs of US imports and exports alike will be borne by consumers. Will we see less trade with the world’s largest economy, as well as a corresponding increase in cheap products from China as Trump’s trade war kicks off once more? Watch this space...
All the best for the holiday season
I would like to wish my network an enjoyable and restful holiday season, and all the best for 2025! If you would like to discuss executive search and boosting talent strategy across the transport and logistics sectors, don’t hesitate to get in touch.