If there’s one constant in 2025, it’s uncertainty. Warehouse leaders are navigating fluctuating tariffs, labor shortages and supply chain disruptions, all forcing them to rethink their operations. As a result, many warehouse leaders find themselves stuck, unable to act decisively in Q1.
But warehouses have faced chaos before — and adapted. When the pandemic upended retail, they stepped up to meet rising e-commerce demands. When persistent supply chain disruptions made parts scarce in 2021, suppliers pivoted, prioritizing agility and flexibility. Sitting around and waiting for stability wasn’t an option then, and it remains inviable today. So, let’s discuss how warehouse leaders can thrive in the face of volatility this year.
The state of the industry
In Q1 of 2025, the Trump administration announced a bevy of tariffs, including a 25% tax on all steel and aluminum imports. However, the administration has also paused several tariffs, including a proposed blanket tariff against Canada and Mexico.
The issue here isn’t necessarily the tariffs themselves, but rather, the volatility surrounding their rollout. The pattern of announced tariffs and subsequent rollbacks has left many leaders in a holding pattern, unable to make informed decisions about where to locate new warehouses.
Meanwhile, persistent labor issues continue to cause concern in early 2025. Industry research suggests the warehouse automation market will surpass $55 billion by 2030. Statistics like these underscore and exacerbate the concerns of labor unions surrounding AI and automation on the warehouse floor.
The solution to both of these issues lies in a flexible approach to warehouse operations.
Flexibility in automation and decision-making
For warehouse leaders, waiting out turbulence is just not an option. Instead, focus on building resilience in your operations. That means:
- Investing in modular automation. The robots-as-a-service (RaaS) delivery model is becoming more popular as an option for scaling up and down without massive capital expenditures. With RaaS, warehouses can add automation in a flexible, cost-effective way — paying for what they need, when they need it. That’s particularly helpful when you’re operating in a highly volatile market.
- Using warehouse space more strategically. Some businesses are opting to stockpile inventory to get ahead of potential tariff hikes, but this isn’t a sustainable strategy. Instead, companies should consider short-term or on-demand warehouse solutions (think of it like ‘Airbnb for warehouses.’)
- Diversifying your market. Relying solely on the U.S. market may not be a viable solution for the next several years. So, leaders should start exploring options for expanding into Western Europe or Latin America. It’s the best way to ensure that regional uncertainty never jeopardizes your ability to deliver.
- Upskilling your human workers. The most prudent path forward for warehouse automation is one that prioritizes rapid innovation and upskilling, at worst displacing workers to other roles rather than leaving them out in the cold. At Plus One Robotics, we believe people are your greatest asset; so, ensure you invite them into the future of warehousing with on-the-job training about AI and automation.
- Adopting a frugal mindset. Lean engineering has dominated the news cycle recently, with DeepSeek’s low-budget AI advancements enchanting many American spectators. Warehouse leaders can learn a key lesson from DeepSeek: You make better engineering decisions under constraint than you do under plenty. This is one of our founding principles at Plus One and means we always seek to do more with less. In times of uncertainty, adopting this mindset drives resilience in the organization.
The bottom line? Agility wins
Waiting for certainty in an uncertain world is a losing strategy. The best warehouse leaders in 2025 will be the ones who embrace flexibility — whether through automation, supply chain diversification or strategic financial moves (or, all three!).
In short, the industry is changing. But there’s room for profitability in 2025. You’ll just need to identify solutions that help you adapt, scale and plan ahead during volatile times.