EY: Adapting Procurement to Supply Chain Shifts in 2025

The supply chain landscape is changing, with AI-driven digitalisation, sustainability regulations and nearshoring shaping procurement strategies.

As trade policies shift and logistics costs fluctuate, EY’s latest Supply Chain Quarterly Update for Q1 2025 highlights key challenges and opportunities for procurement teams.

While supply chains are stabilising, organisations must prepare for rising costs, trade disruptions and new sourcing strategies to maintain efficiency and resilience.

Managing Supply Chain Costs and Policy Risks

EY’s report emphasises the need for procurement teams to remain agile as logistics costs and trade policies evolve.

According to Sumit Dutta, Principal for Supply Chain & Operations at EY: “The trucking industry has shown signs of resurgence, with spot trucking rates indicating a potential recovery from a two-year freight recession. This uptick, along with forecasted increases in both spot and contract rates, points toward a tightening market that may influence shipping costs and carrier contract strategies in the near future.”

With transportation costs increasing, procurement professionals must focus on supplier diversification, cost-efficient logistics partnerships and data-driven decision-making to optimise supply chain expenses.

Trade policies also present a challenge. Dutta highlights how “the developments related to proposed trade tariffs by the US government necessitate strategic shifts in sourcing and production network. Organisations are proactively adjusting to these changes, aiming to mitigate any potential impact on supply chains and maintain operational efficiency.”

Potential tariffs, including a 25% tariff on Canada and Mexico and an additional 20% on China, could drive up costs and disrupt procurement strategies. To counter this, businesses are turning to nearshoring, sourcing flexibility and regionalised supply chain models.

Leveraging Regionalised Supply Chains for Resilience

Regionalisation is becoming a key procurement strategy, allowing businesses to improve agility and reduce reliance on global shipping routes that are vulnerable to geopolitical tensions.

EY’s report notes that third-party logistics providers (3PLs) saw a 9% increase in warehouse leasing by the end of 2024.

This shift highlights how companies are using 3PLs to enhance scalability, efficiency and cost-effectiveness. These providers, based in key logistics hubs such as Pennsylvania’s I-78/81 corridor and California’s Inland Empire, offer expertise in transportation, warehousing and supply chain optimisation.

By Q3 2024, 3PLs held a 34.1% market share and accounted for 41% of bulk leasing activity in seaport markets by November. This growing market presence reflects the demand for flexible logistics solutions that can navigate trade policy changes, labour shortages and rising costs.

For procurement teams, adopting regionalised supply chains means securing alternative suppliers, increasing inventory buffers and investing in digital procurement tools to track costs and performance across multiple regions.

The Role of Procurement in Driving Supply Chain Efficiency

Despite ongoing disruptions, supply chain pressures are easing. The Global Supply Chain Pressure Index fell from -0.31% in January to -0.07% in February 2025, indicating reduced costs, fewer delays and improved raw material availability.

These changes present an opportunity for procurement teams to optimise inventory levels, negotiate better supplier contracts and improve cash flow. Additionally, US labour productivity improved year-on-year in Q4 2024, with the Manufacturing PMI reporting 50.9 in January and 50.3 in February. A PMI above 50 suggests manufacturing expansion, leading to increased demand for raw materials and logistics services.

Higher productivity allows procurement teams to streamline supplier negotiations, enhance contract management and invest in automation to drive cost savings. This focus on efficiency also strengthens resilience against future disruptions.

As organisations navigate shifting trade policies and economic conditions, procurement teams play a critical role in maintaining stability. By embracing regionalised supply chains, supplier diversification and data-driven sourcing strategies, businesses can stay competitive.

Higher productivity allows procurement teams to streamline supplier negotiations, enhance contract management and invest in automation to drive cost savings. This focus on efficiency also strengthens resilience against future disruptions.

As organisations navigate shifting trade policies and economic conditions, procurement teams play a critical role in maintaining stability. By embracing regionalised supply chains, supplier diversification and data-driven sourcing strategies, businesses can stay competitive.

Explore the latest edition of Procurement Magazine and be part of the conversation at our global conference series, Procurement & Supply Chain LIVE.

Discover all our upcoming events and secure your tickets today. ​​​​​​​

Procurement Magazine is a BizClik brand.