Ocean spot rates have climbed more than 300% over the past five months, creating severe backlogs across global supply chains and squeezing shippers who depend on timely cargo delivery, according to GEODIS President and CEO Laura Ritchey. Industry benchmarks such as the Drewry World Container Index and the Shanghai Containerized Freight Index have reflected the steep ascent, with the most acute pressure concentrated on Asia–Europe and Trans-Pacific trade lanes that carry the bulk of global manufacturing imports.

Speaking on FreightWaves Today, Ritchey described a convergence of factors driving the disruption: blank sailings by ocean carriers, port congestion, and ongoing geopolitical threats in the Red Sea and Strait of Hormuz. Since November 2023, Houthi forces have attacked commercial vessels transiting the Red Sea and Bab el-Mandeb Strait, prompting major carriers to reroute vessels around Africa's Cape of Good Hope — adding roughly 10 to 14 days to Asia–Europe voyages and absorbing significant effective capacity. The combined effect has left cargo that was booked as early as March still unfulfilled heading into July.

"We have product that we've been trying to book since March that's still rolling in July," Ritchey said. "And for people in the manufacturing space where they need these things on their assembly line, they're not too happy."

"We aren't seeing quite the COVID levels, but a container is a lot more expensive than it was just a few months ago," she added.

Ritchie said that air freight capacity exists as an alternative but comes at a premium cost that shippers must be prepared to absorb. The situation is further complicated by semiconductor and chip shortages affecting major technology clients, which simultaneously increases pressure on both ocean and air freight modes.

Port congestion has been particularly acute in India, Ritchey noted, where significant bottlenecks have taken considerable time to clear. The cumulative backlog of goods continues to strain manufacturing supply chains that depend on just-in-time delivery of components.

An Uneven Economic Landscape

GEODIS, which employs 20,000 workers across 230 U.S. sites spanning freight forwarding, contract logistics, and transportation, is staying closely aligned with customer forecasts to navigate the uncertainty. The company, headquartered in Nashville, divides its U.S. operations into three regions.

Ritchey described the current economy as deeply uneven, with performance varying dramatically depending on end-market exposure. Some GEODIS customers are posting sales growth of 30% to 40%, while others remain flat. She noted that ISM manufacturing data appears robust, driven significantly by artificial intelligence data center construction and large-scale infrastructure buildout.

Apparel has emerged as a bright spot, with unit volumes rising even on an inflation-adjusted basis. Ritchey attributed part of this strength to consumers trading off discretionary spending — such as reducing gasoline purchases — to allow for occasional splurges. She also noted a post-pandemic shift toward more professional attire as workers return to offices, following an extended period of casual dress codes during COVID.

Conversely, housing improvements and new housing starts remain soft. The bifurcation across sectors makes broad economic predictions difficult, Ritchey said.

Data Centers Create New Supply Chain Challenges

Ritchey highlighted an emerging problem tied to data center construction, noting that these facilities are being built increasingly far from urban centers, often in areas lacking adequate warehousing infrastructure for repair parts and limited amenities to support workers. The hyperscale data center buildout — driven by cloud providers and AI compute demand — has intensified competition for land, power, and logistics infrastructure in regions already straining to accommodate rapid industrial growth. As municipalities and even some states impose moratoriums or restrictions on data center development — including Hamilton County in Chattanooga, Tennessee — the facilities are being pushed into more remote locations.

"If you have this $100 million or even multi-billion dollar investment, you need to make sure it runs," Ritchey said, emphasizing that the absence of nearby supply chain infrastructure creates operational vulnerabilities once data centers become operational.

She pointed to Prologis as well-positioned in this environment, given its extensive land bank and database assets that allow the company to support both warehousing and data center operations at scale.

The discussion of data center power requirements also touched on nuclear energy, with Tennessee Valley Authority (TVA) recognized for its leadership in supporting regional industrial development.

Technology and AI Integration

GEODIS is deploying artificial intelligence across multiple operational areas. The company is using AI to manage shipment data, oversee trucker operations, and handle other process-intensive workflows that lend themselves to automation.

A particular focus is on training and upskilling warehouse associates. GEODIS teammates collectively speak more than 30 languages, and AI tools are being leveraged to provide instruction and communication in workers' native languages — a capability the company previously lacked.

"We just haven't had the robustness to be able to interact with them in their own language and to be able to really lead the business forward," Ritchey said.

GEODIS is also piloting drones for inventory management inside warehouses, an approach Ritchey said offers improvements in both accuracy and worker safety compared to traditional cycle counting. The drones address one of the most common sources of warehouse injury claims — workers climbing equipment at height — while also overcoming some of the same density and product-type challenges previously encountered with RFID technology.

From Visibility to Orchestration

Ritchey argued that supply chain visibility alone is no longer sufficient, pointing to orchestration as the defining capability for third-party logistics providers over the next two to three years. Orchestration, as she described it, means using predictive data to autonomously respond to disruptions rather than merely tracking shipments.

"If there's a physical flow and a data flow, and a lot of what 3PLs do is a data flow, what are we gonna do in two or three years when the data can be managed by AI?" Ritchey asked. "It's gonna be about how we orchestrate, how we actually get more predictive."

She referenced a perspective gaining traction on LinkedIn: that delivery itself will become the product in the future, with the timing, method, and speed of delivery mattering more than the item being shipped — a concept often called the Amazon effect.

Client Experience Organization

Earlier in 2024, Ritchey created a client experience organization by consolidating three previously fragmented functions: continuous improvement, data and analytics, and account management. The new group reports directly to her to ensure organizational neutrality.

Ritchey modeled the restructuring partly on American Airlines, which reorganized its customer journey after identifying internal silos that prioritized operational convenience over passenger experience. She found parallels at GEODIS, where data and analytics had been placed with IT, and continuous improvement had been housed within engineering — groupings that reflected internal organizational logic rather than the customer's experience.

"Sometimes we put it in operations, sometimes we put it in sales, and that makes the organization sort of become not neutral," Ritchey said. "They have a bias to give you their own perspective."

Leadership Philosophy and the 5 Whys

Ritchey, who completed her first year at GEODIS's Nashville headquarters, emphasized the importance of direct observation in understanding operations. She described visiting warehouses ranging from least to most automated, deliberately departing from prepared tour paths to talk with frontline workers about their actual challenges.

When asked what surprised her most during site visits, Ritchey cited the passion of GEODIS teammates. Using a "magic wand" question — asking workers what they would change — she received practical, team-oriented responses rather than personal requests. The company also has a notable number of "boomerang" employees who leave, gain outside experience, and return.

Ritchey employs the 5 Whys methodology, rooted in the Toyota Production System, to diagnose root causes of operational issues. The approach involves repeatedly asking why a problem occurred to move beyond surface-level symptoms and identify underlying causes, then implementing permanent fixes to prevent recurrence.

Regulatory Environment and Industry Outlook

Ritchey noted that the current regulatory environment, including tightened broker liability scrutiny following a Supreme Court ruling, is generating increased demand for established, compliance-focused 3PLs. She indicated that the ruling is removing some capacity from the market as less-robust operators struggle to meet heightened requirements.

GEODIS is owned by SNCF, the French national railroad, which Ritchey said provides financial stability and a strong compliance infrastructure — assets she characterized as increasingly valuable in the current regulatory landscape. She expressed optimism that the industry changes represent a natural resetting of supply and demand rather than a temporary cycle.

Looking ahead, Ritchey said she is most encouraged by a broader cultural shift in how shippers approach outsourcing decisions.

"People are back to actually thinking about supply chain as partnerships instead of transactional," she said. Shippers are increasingly deliberate about defining which core functions — product development, marketing, manufacturing — they retain internally and which they entrust to a third-party logistics provider.

GEODIS is positioning itself to serve as an integrated partner in that model, with the technology infrastructure to support clients across the full supply chain journey.

Source: FreightWaves