With decades of experience navigating the turbulent waters of global logistics, Rohit Laila has witnessed the evolution of the supply chain from a back-office function to a critical boardroom concern. His expertise in delivery systems and passion for technological innovation provide a unique lens through which to view the pandemonium of 2025. This past year tested the resilience of global trade networks like never before, marked by abrupt tariff implementations that forced rapid sourcing redesigns, overwhelming surges at ports that strained inland infrastructure, and industry-shaking merger announcements. We sat down with Rohit to dissect the cascading effects of these disruptions and understand how businesses navigated a year defined by constant uncertainty.
The article highlights how businesses moved production from China to avoid tariffs of up to 200%. What specific, step-by-step processes did companies use to rapidly redesign these sourcing networks, and what were the most significant operational hurdles they faced in finding and vetting new suppliers?
Honestly, there was no clean, step-by-step process; it was a frantic scramble for survival. The first move for most was pure triage: identifying which product lines were most exposed to those crippling 200% tariffs. From there, it was an all-hands-on-deck effort to find alternative manufacturing hubs in Southeast Asia, Mexico, or even Eastern Europe. The biggest operational hurdle wasn’t just finding a factory, but vetting it under immense time pressure. We’re talking about ensuring quality control, production capacity, and ethical standards in a matter of weeks, a process that normally takes months, if not years. You can’t just flip a switch. It meant dispatching teams on the ground, navigating unfamiliar regulatory environments, and rewriting entire logistics playbooks on the fly, all while your primary supply line was under threat.
We saw massive frontloading at ports like Los Angeles, which recorded its second-best February. Beyond those volume metrics, what were the downstream effects on warehousing capacity and inland transportation? Could you share an anecdote about the resulting logistical chaos on the ground?
Those record numbers at the ports tell only half the story. That surge of over 800,000 TEUs in a single month at one port created a massive logistical tidal wave that crashed inland. Warehouses near the ports were filled to the rafters almost overnight, forcing companies to lease secondary or even tertiary space hundreds of miles away at exorbitant rates. I remember one client, a mid-sized retailer, who had containers stuck at the port for weeks simply because they couldn’t find a warehouse with an open bay door or a chassis to move them. It was a complete gridlock. Drayage drivers were working around the clock, but the infrastructure simply couldn’t absorb that much volume that quickly. It felt like trying to force a river through a garden hose—the pressure just kept building, leading to delays and costs that rippled through the entire country.
The Union Pacific and Norfolk Southern merger announcement sent shockwaves through the industry. With concerns about reduced competition, what specific contingency plans or negotiation tactics are shippers developing now to mitigate the risk of higher rates and poorer service before the deal potentially closes?
Shippers are absolutely not waiting for that $85 billion deal to close in 2027; they’re in full-on preparation mode right now. The smartest ones are actively diversifying their carrier portfolios. They’re strengthening relationships and locking in multi-year contracts with other Class I railroads to ensure they have viable alternatives. A key tactic is to demonstrate that their freight is not captive to a single network. By exploring more intermodal options and even building out regional trucking partnerships, they create leverage. During negotiations, they can now concretely say, “If your rates increase by X or service drops to Y, we have a tested and ready plan to move our volume elsewhere.” It’s about building a resilient and flexible network that isn’t beholden to the whims of a single transcontinental behemoth.
The administration’s crackdown on foreign truck drivers included stricter English proficiency enforcement and a pause on work visas. How did these policy changes tangibly impact daily driver availability and freight costs for carriers, and what strategies did they use to cope with the shortfall?
The impact was immediate and severe. It was like a valve being shut off on an already shrinking pool of drivers. On a daily basis, carriers suddenly found themselves with fewer drivers to cover loads, which instantly drove up spot market rates as shippers competed for limited capacity. We saw a direct increase in driver wages and sign-on bonuses as carriers fought to retain their existing workforce. To cope, companies had to get incredibly creative. They accelerated investments in route optimization software to squeeze every ounce of efficiency from their fleets, they doubled down on domestic driver recruitment programs, and many began seriously exploring “drop and hook” programs with their biggest customers to minimize driver wait times and maximize driving hours. It was a multi-pronged strategy born out of sheer necessity.
After the UPS MD-11 crash in Louisville, both UPS and FedEx grounded their fleets. Can you walk me through the immediate contingency plans carriers executed to minimize disruptions? What specific alternative assets, such as ground transport or spare aircraft, were most crucial in that effort?
The moment that tragic crash occurred, it triggered a massive and well-rehearsed contingency response. The first priority after the human element was network integrity. With the Worldport hub halted and fleets grounded, the most crucial asset was the ground network. FedEx and UPS immediately pivoted an enormous volume of parcels from air to their premium ground services. Think of their vast fleets of trucks as the circulatory system that kept things moving when the heart of the air network paused. Simultaneously, they activated their spare aircraft—older models, leased charters, anything certified and available—and rerouted international flights to other hubs. It was an incredible display of multi-modal agility under the worst possible circumstances, proving that resilience is built on having redundant and flexible capacity across air and ground.
The Supreme Court is reviewing the legality of tariffs imposed under the IEEPA. How are importers that sued for refunds, like Costco and Bumble Bee Foods, currently accounting for this on their balance sheets, and what operational plans are they making for a potential favorable ruling?
From a financial standpoint, this is a delicate balancing act. Companies are treating these potential billions in refunds as a “contingent asset.” It’s disclosed in their financial reports to investors, but you can’t officially book it as revenue, so it doesn’t affect their current bottom line. Operationally, they’re running parallel strategies. Plan A assumes the tariffs remain, meaning all their current pricing models, sourcing decisions, and cost structures are based on paying those duties. But they absolutely have a Plan B ready for a favorable ruling. This plan outlines exactly how that massive cash infusion would be deployed—whether it’s to pay down debt, strategically lower prices to gain market share, or reinvest in strengthening their supply chains to be less vulnerable to future political shocks. They have to be ready to act the moment the decision comes down.
What is your forecast for U.S. cross-border trade in the coming year? Considering the diplomatic back-and-forth and USMCA review mentioned, do you predict more stability, or will the volatility with Canada and Mexico continue to be a primary challenge for supply chain managers?
I would caution against expecting any real stability in the near term. The events of 2025 have proven that the tenor of our trade relationships with Canada and Mexico can shift dramatically and with very little warning. While there have been temporary pauses and exemptions that provided some relief, the underlying friction and the potential for new tariffs remain. The looming USMCA review next year is another major source of uncertainty that every supply chain manager has circled on their calendar. Therefore, I believe continued volatility will be the primary challenge. The most successful companies will be those that stop hoping for a return to the “old normal” and instead bake in agility and redundancy as permanent features of their cross-border strategies. Assuming unpredictability is the only predictable factor is the smartest way forward.
