The global economy is approaching the end of its business cycle. Recession signals are flashing everywhere. The latest financial results from logistics giant UPS confirm an economic slowdown.

The logistics sector offers hard data for economic forecasting. Numbers from inside the industry help filter out the cacophony of politically tinted economic projections and biased reporting. When even UPS shifts into reverse, it’s a clear sign: the heartbeat of the global economy is slowing.

Transport Volume Declining

UPS closed the first quarter of 2025 with revenues of $21.5 billion, down 0.7% compared to the same quarter last year. Although the company reported an adjusted profit of $1.49 per share—clearly beating the forecast of $1.39—the headlines were dominated by job cuts and active cost management.

The earnings report offered tangible evidence of economic deceleration: 20,000 job cuts are planned, and 73 locations will be shut down worldwide this year. The management remained cautious in its outlook, offering no clear guidance. Still, the market responded positively. The stock closed up 2% in after-hours trading on the New York Stock Exchange.

The breakdown of results was striking: while domestic U.S. business grew by 1.4%, transport volume declined by 3.5%. International revenue increased by 2.7%, but there are strong indications that shipment volumes outside the U.S. fell significantly—though the company did not disclose exact figures.

Smart cost controls ultimately carried the company over the finish line in Q1. Yet the noticeable decline in shipping volumes signals a broader slowdown in the logistics sector. Ongoing trade tensions and the deadlock in tariff negotiations between the U.S. and its trade partners leave little hope for a near-term reversal of this trend.

Germany’s Logistics Lead Europe

Looking at Germany as Europe´s economic powerhouse, there is still no recovery in sight as the country enters its third consecutive year of recession. According to the Federal Statistical Office, Germany’s economic output in Q1 2025 was 0.2% lower than in the same quarter the previous year, though it grew by 0.2% compared to Q4 2024. These figures provide little reason for optimism.

The German Logistics Association (BVL) regularly compiles an industry index that confirms this bleak picture: the current business climate stands at 85.8 points (with 100 as the growth threshold), and expectations for the current year are hovering at a weak 80.8. Particularly troubling is the 8% decline in logistics real estate investment in the first quarter.

What about jobs in the sector? Consolidated data on layoffs is currently lacking, but the German logistics heavyweight DHL offers some insight into the situation. DHL reported a 7.2% drop in operating profit for 2024 and plans to cut 8,000 jobs in 2025. UPS, its American counterpart, already responded to the weakening economy last year by slashing 12,000 jobs.

A Complicated Macro Environment

The logistics sector faces headwinds from two directions: First, there is the geopolitical arena, which has become more volatile since the imposition of U.S. tariffs. Consider this: roughly 43% of total U.S. container imports are handled through East Coast ports. These ports offer real-time, quantitative insight into the logistics industry's health.

According to preliminary April estimates by the Global Port Tracker from the National Retail Federation, container volumes in the second half of the year are expected to fall by 20%. Should this forecast come true, it would represent a dramatic collapse in trade flows—one that would demand urgent solutions to the tariff dispute.

A glance at the macroeconomic indicators from the three major economic zones—USA, EU, and China—corroborates the impression from the logistics sector. According to the widely followed Purchasing Managers' Index (PMI), which consolidates metrics such as new orders, output, employment, delivery times, and inventories, the global economy is clearly losing momentum.

In April, the U.S. PMI dropped from 53.5 to 51.2, nearing the stagnation threshold. In the Eurozone, the index slipped from 51.3 to 49.7, entering contraction territory. China reported a decline from 51.4 to 50.2 in the same month. These figures are likely to deteriorate further in the coming months amid ongoing trade disputes. Beneath the surface of a still-resilient service sector, only U.S. industry remains in expansion mode—rising from 50.2 to 50.7 in April. China, at 49, and the Eurozone, at 48, remain firmly below the growth threshold.

Crisis Meets Overindebted States

The early indicators from the logistics sector speak plainly: we are nearing the end of the economic cycle. Rising bankruptcies and job losses will follow, and loan defaults will burden both the banking sector and credit creation. The impending crisis is hitting fiscally overstretched states, many burdened with exorbitant debt levels—raising the likelihood of enforced austerity.

The U.S. alone carries public debt equal to 120% of GDP; Italy stands at 140%, and China is estimated to be at 100%. These figures cast serious doubt on the public sector’s capacity to intervene. If public over-indebtedness blocks access to free bond markets, traditional economic policy responses are distorted. As we've seen before, the additional debt taken on for stimulus programs will then be absorbed by central banks. Simultaneously, credit costs will be reduced via low interest rates and looser reserve requirements—in the hope that the private sector will resume lending.

We shall see how far the classical Keynesian playbook will carry us in the coming recession. With its trillion-euro debt programs, Germany may be called upon in the coming years to ignite artificial sparks in the anaemic Eurozone economy. Meanwhile, the American path of reindustrialization and fiscal consolidation appears the more promising route.

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Thomas Kolbe, born in 1978 in Neuss/ Germany, is a graduate economist. For over 25 years, he has worked as a journalist and media producer for clients from various industries and business associations. As a publicist, he focuses on economic processes and observes geopolitical events from the perspective of the capital markets. His publications follow a philosophy that focuses on the individual and their right to self-determination.