The logistics sector in 2025: geopolitical risks and a shrinking truck driver workforce

Lithuania’s transport and logistics sector is seeing off 2025 without fireworks. The latest sector survey conducted by the Transport Innovation Association (TIA) shows that the market has entered a phase of pragmatic survival: although mass bankruptcies have been avoided, optimism about 2026 remains limited. The biggest headache is no longer fuel prices, but labour shortages, unpredictable geopolitical developments, and government decisions.

“2025 in the logistics sector was stable, but without any breakthrough growth. Most companies managed to maintain revenues, but neither the market nor its participants felt clear growth,” summarises the situation Rugilė Andziukevičiūtė-Buzė, head of TIA.

The figures confirm this assessment: almost 47% of companies describe the year as stable, yet as many as 42.6% rate it as unsuccessful. Only one in ten companies (10.6%) recorded success, while more than half of the sector (55.3%) admit they are already feeling tangible signs of an economic slowdown.

The pull of the eastern corridor

Although 83% of Lithuanian transport companies currently link their future with western Europe, this direction also conceals a clear profitability paradox. Historically, transit flows from China to Europe by land were important to Lithuania’s economy — for a long time, routes ran through Russia and Belarus into Lithuania, from where goods continued westwards. However, this scheme has fundamentally changed due to Russian and Belarusian aggression: geopolitical risks and sanctions have led to flows being redirected more often via Latvia and Poland, or bypassing the region altogether.

Nevertheless, some Lithuanian carriers continue to participate in these supply chains, adapting to changing routes. The logic behind such decisions is purely economic. Survey data show that margins in western markets are under pressure from intense competition (cited as a challenge by 51.1% of companies), while in certain segments of eastern routes, double-digit profitability is still possible. Although this is not a mass practice, its scale allows it to be described as a high-risk niche where carriers consciously balance risk and return.

“We see a clear split in the sector — some choose stability and lower returns, others opt for higher risk and short-term profit. The eastern direction today is not about geography, but about risk tolerance,” says R. Andziukevičiūtė-Buzė, stressing that not all companies are able to quickly reorient and operate successfully in western markets.

At the same time, more and more carriers and freight forwarders are looking at the middle, or Caspian, corridor as an alternative to routes via Russia. While this route is seen as geopolitically safer, it raises a fundamental question: will Lithuania maintain its competitiveness as a transit country in such a configuration of routes? It is clear that cargo flows will continue to move between east and west in search of the fastest and cheapest paths. The key question today is therefore not whether flows will move, but whether Lithuania will be able to become part of them and retain its place in the international transit ecosystem.

Labour trap: between tightening rules and internal tension

In 2025, the biggest problem for carriers became not borders or routes, but empty truck cabins. Labour shortages are identified in the survey as a core, existential problem for the sector, limiting not only growth but the continuity of daily operations.

The situation is further complicated by tightening regulation of employment for third-country nationals. Negotiations with the ministries of the interior and of social security and labour on the law on the legal status of foreigners and the quota system for third-country nationals are progressing slowly, and so far provide businesses with neither clarity nor predictability. Carriers emphasise that the ability to plan operations over longer horizons has effectively disappeared.

Additional tension arises from practical obstacles: attracting workers from third countries is becoming extremely difficult, and in some cases almost impossible, especially from countries where Lithuania has no diplomatic representation. This institutional vacuum creates imbalances in labour relations and increases the risk of conflicts within companies. Survey data show that 46.8% of companies consider driver shortages a critical challenge. How much public authorities cooperate and recognise this sector’s critical needs will shape future competitiveness. So far, however, government decisions regarding third-country workers have not been favourable to business, and there are no clear signs of improvement — business requests to increase quotas have been rejected.

Institutional dead end: unpredictability, not rules, is holding back investment

The survey clearly showed that in 2025 the greatest influence on sector decisions came not so much from market demand as from the unpredictability of government decisions and geopolitical instability. As many as 83% of respondents rated the unpredictability of government decisions at the maximum level (5). This is identified as the most important risk shaping cautious, defensive business behaviour.

Respondents consistently stress that the problem lies not in regulation itself, but in its fragmented and hard-to-predict application. It is becoming difficult for businesses to plan even in the medium term, when rules change faster than companies can adapt. This tension is further amplified by uncertainty in eastern directions — sanctions risks and sudden political decisions directly affect the entire ecosystem, from route planning to insurance and financing conditions.

“For business, the key issue is not that rules change, but that it is unclear when and how they will change. This uncertainty has become the main factor limiting investment and long-term decisions,” comments R. Andziukevičiūtė-Buzė.

Investment pragmatism

A cautious outlook on the future also dictates investment priorities. Digitalisation in logistics in 2026 will be more evolutionary than revolutionary. While transport management systems are already a standard (used by 72.3% of companies), only 8.5% of respondents plan to actively invest in artificial intelligence solutions. The dominant approach is to do only what pays back quickly or is unavoidable due to regulation (e.g. eFTI requirements). In practice, more and more carriers and freight forwarders are coming to see automation not as an experiment or an additional risk, but as a direct tool for improving operational efficiency and financial results.

A similar situation is observed in the field of sustainability. The sustainability agenda is approached pragmatically: the main obstacle is clients’ unwillingness to pay a higher price for “green” transport — confirmed by 51.1% of respondents. Some businesses state plainly that sustainability today is a flagship theme for large players, while for small companies facing costs 1.5–2.5 times higher, it remains an unaffordable luxury. Nevertheless, in the longer term, sustainability solutions in the sector are likely to come through cost reductions and efficiency gains rather than sudden commitments. As technologies become cheaper and regulation clearer, a window of opportunity will gradually open for smaller market participants as well.

Outlook for 2026: slow adaptation or market withdrawal

Survey data allow for a clear conclusion: 2026 will not be a breakthrough year for Lithuania’s transport and logistics sector. Nearly 60% of companies forecast a year similar to 2025, while another 34% are preparing for a possible further downturn. Optimism is rare, and planning is limited to short horizons.

The overall sector backdrop today reflects not an ожидание of growth, but a constant state of adaptation, with businesses balancing cost control against external uncertainties. Yet it is precisely in this environment that a clear divide is emerging: winners will not be those who wait for more stable times, but those who actively seek new routes, explore innovations, invest in IT solutions, process optimisation, and efficiency. Businesses cannot change geopolitics or government decisions, but the ability to adapt quickly and act flexibly is becoming the key competitive advantage.

“Today, the winners in the sector are not those with the biggest ambitions, but those who can calmly and consistently get their internal processes in order. In the coming years, this will be a contest of endurance, not speed,” says R. Andziukevičiūtė-Buzė.

Despite cautious forecasts, Lithuania’s transport and logistics sector remains structurally strong. Over recent decades, it has proven its ability to adapt to changing supply chains and to create high value-added services even under conditions of limited natural resources. Global freight flows will continue to move — the essential question is whether Lithuania will be able to attract part of these transit flows through its own ecosystem.