Global supply chains are undergoing significant adjustments as businesses confront a more complex trade landscape influenced by geopolitical tensions, shifting tariff policies, and changing trade patterns, industry leaders said during a recent briefing at the Port of Los Angeles.
Gene Seroka, executive director of the port, and Dan Letter, chief executive officer of Prologis—the world’s largest logistics real estate company—outlined how companies are managing uncertainty while continuing to invest in logistics infrastructure, warehousing, and trade operations.
The conversation took place amid ongoing global developments including ceasefire talks involving Iran and the United States, continued conflicts in the Middle East and Europe, and evolving dynamics in China-US trade relations.
Seroka highlighted the potential impact of a proposed reopening of the Strait of Hormuz, a critical maritime passage through which approximately 20% of the world’s energy products flow. He stated that such reopening could alleviate pressure on energy markets and bolster business confidence. However, he cautioned that the memorandum of understanding between the US and Iran remains only a preliminary framework. Normalizing operations through the strait will likely be gradual, given ongoing concerns over crew safety and the need to resolve backlogs from recent disruptions.
Despite these challenges, Seroka reported that cargo movements remain resilient, with port operators and partners in Asia maintaining steady flow. He also noted that declining bunker fuel prices and improving market confidence may support increased trade volumes in the coming months.
Regarding China-US trade relations, Seroka characterized recent government dialogues as a positive development but emphasized that many businesses still seek clearer policy guidance to inform long-term decisions on trade, investment, and supply chain management. China continues to be one of the largest trading partners for the Port of Los Angeles, with a substantial share of container volume linked to the country.
Tariff uncertainty remains a significant factor influencing business strategies. While discussions have considered opportunities for expanding US agricultural exports such as beef and soybeans, Seroka observed that increased competition from Brazil and Argentina in China’s soybean market complicates efforts for the United States to regain lost ground. He added that once overseas buyers adopt new sourcing relationships, it can be difficult and time-consuming for US exporters to reestablish market share.
The combination of ongoing tariff deadlines and potential new trade measures has led many companies to shorten planning horizons and modify inventory approaches, reflecting the evolving realities of global commerce.
From the perspective of logistics providers, Letter expressed that supply chains have grown more resilient after navigating years marked by interest rate increases, geopolitical disputes, and global conflicts. He confirmed that companies are now making strategic decisions with longer timeframes, often five years or more, to adapt to the current environment.
Together, these insights underscore the significant reshaping of global supply chains amid a period of heightened uncertainty, while highlighting the enduring importance of international trade and infrastructure investment.