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Market Update Quarterly
Quarter 3 | Summer 2025
Summary: Restaurant Supply Product Pathway Global trade is under pressure due to new U.S. tariffs, geopolitical tensions, and supply chain bottlenecks, driving up input costs and leading to strategic sourcing shifts toward nearshoring and artificial intelligence powered decision-making.
Manufacturing
Ground Logistics
Ocean Logistics
Raw Material Availability
Port Worker Strikes
Amazon Strikes
Cost
Armed Conflict
Diesel Fuel Cost
Tariffs
Capacity
Warehouse Inventory
• Ocean Freight Rates & Capacity Disruptions: Ocean freight conditions into the U.S. remain unstable, shaped by ongoing global disruptions and evolving trade dynamics. Carriers and supply chain stakeholders face continued challenges from constrained capacity, port congestion, labor negotiations, and shifting tariff structures. This has led to higher costs, delayed transit times, and increased planning complexity for importers. Strategic flexibility and proactive planning are essential (Reuters 2025) . • Sourcing Trends & Strategic Shifts: In 2025, sourcing strategies focus on increasing resilience and agility amid ongoing disruptions. Companies are diversifying suppliers by nearshoring to regions like Mexico and Vietnam to reduce reliance on China, while leveraging Artificial Intelligence (AI) - powered tools and digital platforms to accelerate decision-making and enhance transparency. Sustainability and ethical sourcing have become key priorities, with emphasis on ESG standards and supply chain traceability. Overall, procurement is shifting toward more flexible, tech- enabled, and responsible approaches to manage risk and ensure steady supply (Business Insider 2025) .
The global shipping industry remains under pressure, with a complex mix of trade policy changes, geopolitical disruptions, and logistical bottlenecks continuing to disrupt international commerce. These conditions have led to elevated costs, delays, and uncertainty across supply chains, particularly for sectors that rely heavily on imported raw materials and components. Major Trends & Issues: • U.S. Tariffs: The U.S. implemented a 10% universal import tariff in April 2025, followed by retaliatory tariffs ranging from 15% to 145% on targeted countries. These tariffs significantly affect input costs for materials like aluminum, steel, and plastics and have triggered global trade tension and supplier realignment. Detailed tariff information is provided on page 3. For ongoing updates and the latest information, please visit ACR News.
Q3 2025 Market Update
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Summary: Key Updates – U.S. Tariffs
As of August 1, the U.S. imposed widespread import tariffs of up to 50%, significantly impacting material costs and sourcing decisions across industries, especially for products from Canada, India, Brazil, and others.
As of August 01, 2025, the U.S. has implemented sweeping new import tariffs ranging from 10% to 41% across more than 60 countries, raising the average duty rate from roughly 2.3% to about 18%, the highest in nearly a century. Major trade partners such as Canada (35%), India (50%), and Brazil (50%) face the steepest increases, while countries like Thailand and Vietnam negotiated lower rates of 19% and 20%, respectively. These tariffs are already driving up costs for materials like aluminum, steel, and plastics, with broad implications for supply chains and sourcing strategies. (AP News) • A universal 10% baseline tariff now applies to most imports except from China, Hong Kong, Macau, Canada, and Mexico. • Affected partners include the EU, Japan, South Korea, Thailand, Vietnam, and others, facing tariffs ranging from 15% to 50%. • Canada faces 35% on non-USMCA compliant goods. Brazil faces 50%, and several Southeast Asian and Eastern European countries now exceed 30%. • Tariff percentages are subject to change . For ongoing updates and the latest information, please visit ACR News. Sector-Specific and Policy Notes • Steel and Aluminum: These remain under a standing 50% duty under Section 232 since April 2025. • Automobiles and Auto Parts: These continue to incur 25% tariffs regardless of country of origin. • De Minimis Exemption Removed: Goods under $800 from China, Hong Kong, and Macau are no longer duty-free. All shipments from these regions are now fully taxed. • Rollout Timing: Several increases originally delayed are now live as of August 1. India and a few others will see implementation by August 7.
Countries & Territories
Reciprocal Tariff, Adjusted
20%
Bangladesh
19%
Cambodia
55%
China
European Union: Goods with Column 1 Duty Rate [1] > 15% European Union: Goods with Column 1 Duty Rate [1] < 15%
0%
15% (minus Column 1 Duty Rate)
50% (As of 08/06/2025)
India
19% 15% 19% 19% 19% 20% 20% 19% 15%
Indonesia
Japan
Malaysia
Pakistan
Philippines
Sri Lanka
Taiwan
Thailand
Turkey
20% *Not an exhaustive list of all countries with increased tariffs
Vietnam
Note: Countries not listed still face the general 10% baseline unless specified in USTR notices or Section 232 rulings.
Q3 2025 Market Update
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Summary: Ocean Freight
Ocean freight remains highly volatile with constrained capacity, rising costs, and frequent route
disruptions, demanding proactive supply chain planning and increased flexibility from importers.
Ocean freight into the U.S. as of August1,2025 is defined by tight capacity on core routes, sticky port congestion, elevated and volatile rates, and continued labor and tariff-driven disruption. Carriers and shippers are reacting with rerouted trade lanes, alliance adjustments, and strategic shifts in sourcing. If you are managing product flow or planning supply chains, act decisively, plan for uncertainty, and stay nimble. Capacity remains tight on core Transpacific U.S. lanes despite global overcapacity, thanks to blank sailing and service cuts. Labor tensions persist , particularly around automation, and could reignite disruptions later in 2025. Rates are high and volatile – tariff windows and geopolitical uncertainty are heating up spot and contract pricing. Routing shifts and overland alternatives are increasing as shippers seek flexibility amid tariff and congestion risk. Near-term cost spikes expected through mid-August, then potential softening unless new policy shocks emerge.
2. Labor and Port Conditions • Labor disruption risk has eased: the previous October2024 East & Gulf Coast strike was suspended and a contract extended through January 15, 2025. (Reuters) • Negotiations resumed in early 2025, heavily focusing on automation. The International Longshoremen's Association (ILA) opposes expansion while employers argue it is needed for efficiency. (Freightos) • Port productivity remains uneven. U.S. West Coast ports are managing steadily, but both domestic and European transshipment hubs continue suffering congestion, long berth delays, and equipment shortages. (Wall Street Journal) (C.H. Robinson) 3. Shipping Costs & Rate Environment • Spot and contract rates remain elevated. While overall volume and usage trackers suggest weakening rate trends, carriers maintain discipline via general rate increases. (GRIs) (C.H. Robinson) • Tariff policy uncertainty fuels volatility: A temporary tariff pause for non-China goods ended on August1, and Chinese tariff concessions expire August12—these deadlines have already triggered booking surges, especially out of China. (Freightos) 4. Routing and Supply Chain Shifts • Importers are increasingly shifting sourcing to Southeast Asia, India, and Vietnam to avoid tariff risk, though China remains a major origin point. (Wall Street Journal) (C.H. Robinson) • To hedge against port bottlenecks, more cargo is being rerouted inland, and carriers and shippers are favoring smaller regional ports and consolidation nodes. (C.H. Robinson)
Key Challenges:
1. Capacity & Service Availability • Despite the global fleet growing by ~8% in 2025, demand is only up modestly (~3%), generating pockets of overcapacity even as many trade lanes face space shortages. (C.H. Robinson) (Jusda Global) • Ongoing blank sailings and alliance reshuffles are actively tightening capacity on key routes, particularly Transpacific lines to U.S. East and West Coasts. (C.H. Robinson) • Services out of Asia into the U.S. have seen cuts of 30–40%, and West Coast volumes spiked in late Q2 as importers front loaded ahead of tariff deadlines. (C.H. Robinson) (N.Y. Post)
Q3 2025 Market Update
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Summary: Foodservice Industry Insights The U.S. foodservice sector is dealing with labor shortages, inflation, and disrupted supply chains, even as consumer demand returns and operators adapt with tech, alternative sourcing, and menu flexibility.
• Supply Chain Disruptions: Global conflicts, trade restrictions, and climate-related events have led to unpredictable availability and fluctuating prices for essential ingredients. These disruptions have forced restaurants to adjust menus and seek alternative suppliers to maintain operations. • Consumer Behavior Shifts: Today's diners are more value- conscious and health-oriented. There's a growing demand for plant-based options, allergen-friendly menus, and sustainable practices. Additionally, the rise of fast-casual and hybrid dining models reflects a preference for convenience without sacrificing quality. Despite these challenges, the foodservice industry is projected to reach a market value of $5.2 trillion globally in 2025, with the U.S. market contributing significantly to this growth. Operators who adapt to the evolving landscape by embracing technology, streamlining operations, and aligning with consumer preferences are poised to thrive in this dynamic environment. (Culinary Coverage) In summary, while the U.S. foodservice industry faces a myriad of challenges in summer 2025, opportunities exist for those willing to innovate and adapt. By addressing labor shortages, managing rising costs, navigating supply chain complexities, and meeting shifting consumer demands, restaurant operators and distributors can position themselves for sustained success.
As of summer 2025, the U.S. foodservice industry is navigating a complex landscape marked by persistent challenges and emerging opportunities. While consumer demand shows signs of recovery, restaurant operators and foodservice distributors continue to grapple with labor shortages, inflationary pressures, supply chain disruptions, and evolving consumer expectations. Key Challenges: • Labor Shortages and Immigration Policies: The restaurant sector remains heavily reliant on immigrant labor, with over 20% of workers born abroad. Recent immigration enforcement actions and policy changes have intensified labor shortages, making it increasingly difficult for operators to staff their establishments adequately. The revocation of Temporary Protected Status for certain migrant groups has further strained the labor pool, particularly in the hospitality industry. (ft.com) • Rising Operational Costs: Operators are contending with escalating costs across multiple fronts: • Food Prices: Although inflation has moderated, food costs continue to rise, with the USDA projecting a 2.2% increase in 2025. • Labor Expenses: Minimum wage hikes in 21 states and 48 municipalities have added to payroll burdens. • Tariffs: Newly imposed tariffs on imports from countries like Mexico, Canada, and China are expected to drive up prices for key ingredients, including avocados, baked goods, and seafood.
Q3 2025 Market Update
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Summary: Polystyrene Foam Materials Legislation Over 15 U.S. states have enacted bans on polystyrene food containers, signaling a major industry shift toward compostable and recyclable packaging, with growing regulatory pressure on manufacturers through EPR laws.
As of June 2025, several U.S. states have enacted bans on polystyrene foam food containers due to environmental and health concerns. These bans are part of a broader legislative shift toward reducing single-use plastics and promoting sustainable, recyclable, or compostable alternatives in foodservice packaging. In addition to outright bans, many states are advancing Extended Producer Responsibility (EPR) legislation, which holds manufacturers accountable for the entire lifecycle of packaging materials, including collection, recycling, and disposal.
California: As of January 1, 2025, banned the use of most polystyrene foam food containers under the Plastic Pollution Prevention and Packaging Producer Responsibility Act (SB54). Oregon: Effective January 1, 2025, banned the production, sale, and distribution of polystyrene foam cups and takeout food containers. Rhode Island: Implemented a ban on January 1, 2025, prohibiting the use of disposable polystyrene serviceware for prepared food. Delaware: Ban effective July 1, 2025, prohibiting restaurants and other food service establishments from providing polystyrene foam containers for ready-to-eat food or beverages. Virginia: Enacted a ban to be implemented in two phases: July 2025 for larger businesses and July 2026 for businesses with fewer than 20 locations. Hawaii: While not a statewide ban, all counties except Kalawao have enacted bans on polystyrene food containers, effectively creating a de facto statewide prohibition. District of Columbia: Banned polystyrene foam takeout containers on January 1, 2016, with an expansion on January 1, 2021, to include the retail sale of polystyrene foam. American Samoa: Banned the import, sale, and distribution of polystyrene foam containers on February 6, 2024, with the law taking effect 60 days later. These bans reflect a growing trend toward reducing single-use plastics and encouraging environmentally friendly alternatives in the food service industry. (Deschutes)
Below is a list of states with current or upcoming statewide bans:
Maryland: Implemented a statewide ban on expanded polystyrene food service products effective October 1, 2020. Maine: Became the first state to pass a ban in 2019, with the law taking effect on July 1, 2021. Vermont: Enacted a ban effective July 1, 2021, prohibiting the use of polystyrene food containers. New York: Implemented a ban on January 1, 2022, covering single-use foam food and beverage containers and loose fill packaging. New Jersey: The "Get Past Plastic" law took effect on May 4, 2022, banning polystyrene foam food service products. Colorado: Ban effective January 1, 2024, prohibiting the use of polystyrene food containers. Washington: Implemented a ban starting June 1, 2024, making it illegal to sell or distribute polystyrene foam containers, including clamshells, plates, bowls, cups, trays, and coolers.
Learn more about Extended Producer Responsibility (EPR) Legislation here.
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Key Takeaways – Q3 2025 Trade & Tariffs – The U.S. implemented sweeping tariffs on over 60 countries, disrupting global sourcing, driving material cost increases and supplier realignment. For ongoing updates and the latest information, please visit ACR News.
Packaging & Regulatory Trends – 15+ U.S. states and jurisdictions have enacted bans on polystyrene/expanded polystyrene food containers. Broader legislative momentum is growing for Extended Producer Responsibility (EPR) laws. Foodservice providers are shifting toward compostable, recyclable, and reusable packaging. ACR’s Strategic Response & Commitment – At ACR, our long-standing investments in a diversified global and North American supply network position us to respond effectively to evolving tariff policies and market disruptions. Since early 2025, we have significantly reduced our reliance on China-based manufacturing, which now accounts for only a single digit percentage of total sourcing. We are agile, collaborative, and reliable. By leveraging a flexible, collaborative supply chain supported by domestic manufacturing we continue to ensure reliable service, competitive pricing, and consistent product availability. Our commitment remains focused on delivering high-quality, innovative packaging solutions that align with sustainability goals and the growing demands of foodservice operations. We will continue to monitor trade developments closely and provide timely updates to support your business with confidence and clarity.
Ocean Freight & Supply Chain Disruptions – U.S.-bound ocean freight remains volatile with tight capacity, port congestion, labor tensions, and tariff-induced rerouting. Spot rates are high and unstable and strategic planning and flexibility are critical to minimize disruption. Blank sailings, Red Sea diversions, and inland routing are increasing as shippers seek agility. Global Sourcing Trends – U.S. companies are accelerating nearshoring to Mexico, India, and Southeast Asia to reduce dependency on China. Adoption of AI, digital tools, and ESG-aligned sourcing is rising to manage cost, speed, and risk. Procurement is evolving toward more tech-enabled, transparent, and sustainable models. Foodservice Industry Impacts – Restaurant operators face compounded pressure from tariffs, labor shortages, and inflation. Tariffs on food inputs (avocados, seafood, baked goods) are raising menu costs. Labor availability is tightening due to immigration policy changes. Despite challenges, the U.S. foodservice market remains strong with $5.2T projected value in 2025.
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Q3 2025 Market Update
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