Technology Becomes Critical Differentiator in Uncertain Trade Climate

Logistics Service Providers (LSPs) are grappling with a volatile global trade environment. This situation is influenced by factors such as geopolitical instability and fluctuating tariffs. Freight forwarders and customs brokers are compelled to lower their prices while also enhancing their services. These challenges require innovative solutions, and many LSPs are increasingly turning to technology and artificial intelligence (AI).

Technology as a Key Differentiator

According to the latest Descartes Global Forwarder/Broker Benchmark Study, technology is becoming an essential factor for LSPs. It is now viewed not just as an enhancement but as a critical competitive differentiator. The rapidly evolving landscape presents numerous hurdles for forwarders and brokers.

Challenges in Global Trade

• Global instability is the top macroeconomic concern for LSPs, affecting 60% of respondents in the 2025 survey.
• Pricing pressures impact 61% of forwarders and brokers.
• Regulatory complexities, including inconsistent tariffs, affect 42% of companies.
• Customer demand for visibility and digital self-service options is on the rise.

As customer preferences evolve, LSPs must adapt by enhancing service offerings. In 2025, Harmonized Tariff Schedule (HTS) classification services (51%) and duty analysis services (50%) are among the most sought-after services. These demands highlight the importance of innovative solutions that provide better visibility and analytical capabilities.

Investing in Technology

To navigate the complexities of the trade landscape, forwarders and brokers are focusing on technology investment. The survey indicates that 63% of LSPs consider technology their preferred method for coping with industry changes. Furthermore, 65% of firms regard technology as a vital component of their growth strategy.

Shifts in IT Investment Priorities

Investment goals in technology have shifted in recent years:

• Back-office operations formerly dominated IT investments but have dropped to 42% by 2025.
• Automation becomes a focal point, with 52% of LSPs believing it enhances profit margins.
• AI is expected to play a significant role in enhancing automation and intelligence — seen as a primary area for investment by 55% of firms.

While enthusiasm for AI is evident, current adoption rates show only 18% of businesses are effectively utilizing AI. However, as AI continues to evolve, this is expected to change rapidly.

Impact of Automation and AI

Several key areas are becoming vital for AI application:

• Rate management is suggested as the greatest source of IT value by 21% of LSPs.
• Digital self-service tools rank highly with 38% noting their significant IT value.
• Regulatory compliance systems are viewed as crucial by 62% of respondents.

However, a divide exists in technology adoption between large and small firms. Sixty percent of larger companies deem technology as fundamental, contrasting with only 27% of smaller enterprises. This gap translates into differing strategies, where larger firms are more likely to invest in cutting-edge technology.

Future of AI in Logistics

The outlook for AI in logistics is promising. Many LSPs are expected to transition from pilot programs to operational deployments of AI-driven solutions over the next few years. High-impact use cases include document automation and predictive visibility, which are already being prioritized for investment.

Recommendations for Stakeholders

To thrive in today’s unpredictable market, companies should adopt innovative strategies instead of waiting for conditions to stabilize. Here are some essential steps:

• Prioritize technology investments that provide quick-win automation.
• Focus on enhancing customer value through transparency and self-service options.
• Build capabilities around compliance and adaptability to trade policies.

Ignoring these recommendations could leave LSPs further behind in an increasingly digital marketplace. As companies navigate uncertainty, those embracing technology will secure a competitive edge, transforming challenges into opportunities.

Ultimately, the path to success lies in integrating AI-driven solutions that enhance visibility and compliance. Technology-driven differentiation is not just an advantage; it’s becoming a necessity for survival in the world of logistics.

Glenn Palanacki is the VP of Product Development at Descartes, contributing to the discussions around technology’s pivotal role in logistics today.