• Why indirect procurement needs a strategic reset in 2025

    Indirect categories pose clear risks in 2025. Persistent inflation, rising labour costs, and continued trade instability are making cost control increasingly difficult. In addition, suppliers are pushing for price increases. Without effective action, businesses could see their indirect spend increase by 3-14% in 2025.

    However, for businesses that take a more structured, strategic approach, indirect categories also represent a powerful opportunity to gain a competitive edge. With greater visibility into cost drivers, sourcing levers, and performance benchmarks, procurement teams can better anticipate disruption, uncover untapped opportunities, and take decisive action to deliver savings.

    This report – the first in a new series – draws on Efficio’s real-world project data to provide that visibility.

Figure 1 illustrates supplier-requested price hikes across key indirect categories and compares them with outcomes following (i) tactical negotiation and (ii) more strategic action. The sizeable difference between initial price demands and post-mitigation results highlights just how much impact the right sourcing strategy can have.

Beyond highlighting the scale of 2025 cost pressures, Figure 1 also shows categories where mitigation has proven most effective, giving procurement leaders a clear basis for prioritisation. While all indirect categories are experiencing cost pressure, logistics and packaging stand out for two key reasons:

  1. The scale of supplier-requested price hikes: 5-7% in logistics and up to 14% in packaging
  2. The effectiveness of mitigation strategies: In logistics, measures such as route optimisation not only offset the price increase but even delivered 4-6% savings. In packaging, actions like specification harmonisation and supplier consolidation proved even more impactful – reducing cost exposure from +13-14% to -10-12%, a decrease of 26 percentage points. 

Other categories, such as IT & Software, are also experiencing supplier-requested increases (5-6% supplier-requested price increases). Mitigation strategies have successfully reduced prices, but to a lesser extent (2-4% savings). This makes categories like logistics and packaging attractive focus areas, where targeted strategies can yield the most sizeable impacts.

This first issue examines these two categories in detail, outlining practical sourcing levers that can help procurement teams contain rising costs and thrive amid disruption.

Cost pressure hotspot 1: Logistics

The European logistics sector is facing rising costs and disruption due to a combination of macroeconomic volatility and shifting trade dynamics. US tariffs on Canadian, Mexican, and Chinese goods have triggered retaliatory measures, creating network instability. At the same time, e-commerce growth and nearshoring trends continue to fuel logistics demand, increasing pressure on freight markets already strained by high fuel costs, labour shortages, and port congestion.

These pressures are particularly acute in road freight. Without mitigation strategies, businesses should expect price increases of 6-8%, with hikes of over 15% for some geographies like Portugal. Routes that no longer align with shifting transport networks are typically subject to premium pricing, meaning even re-negotiating with incumbents may leave organisations exposed to 4-5% annual increases.

However, targeted interventions can reverse these trends.

Key actions for procurement teams 

To counteract the ongoing challenges, procurement teams will need to adopt a hybrid logistics model that combines long-term strategy with agile, real-time responsiveness. This includes the following measures: diversifying suppliers to reduce reliance on a single provider or region; moving supply hubs closer to demand centres to reduce freight costs while increasing responsiveness to changes and disruptions; adopting a multi-modal transport approach that integrates rail, air, and sea freight; and balancing long-term freight contracts for cost stability with the flexibility to tap into spot markets as needed.

Digital optimisation is key – procurement teams should take advantage of AI tools to increase efficiency, improve delivery reliability, and cut costs. For instance, AI tools can support route planning; algorithms can analyse information such as historical freight data, traffic, and weather conditions to determine the most efficient routes. AI tools can also flag potential issues before they escalate and automate activities such as freight matching and market monitoring.

No mitigation: 5-7% increase

Without intervention or mitigation measures, the logistics category is seeing a 5-7% increase, with 6-8% annual increase for the road freight market.

Re-negotiation with incumbents: 4-5% increase

Even after re-negotiating with incumbents, annual price increases of 3-4% remain common. As carriers increasingly shift volumes between markets, they demand premiums for lanes that no longer align with their portfolio.

Carrier re-allocation: 3-4% savings

Through a targeted tender process, existing carriers can be reassigned to new lanes, helping businesses better leverage volume shifts and align with evolving network needs.

Holistic logistics optimisation: 4-6% savings

Amid price pressures and shifting market volumes, the greatest potential for savings comes from introducing new carriers, re-allocating lanes through a structured tender process, and deploying operational levers, such as extending lead times and increasing utilisation.

Cost pressure hotspot 2: Packaging

Packaging is an area of indirect procurement highly vulnerable to inflation, facing cost pressures due to volatile raw materials pricing, regulatory changes, and growing sustainability demands. Without intervention, organisations could end up facing price increases of 13-14% in 2025. 

Key drivers include fluctuating input prices for paper, plastics, and aluminium, exacerbated by persistently high energy costs and tariffs on imported materials. 

To add to the challenge, sustainability regulations are becoming increasingly stringent –  with strict controls on plastic waste, greenhouse gas emissions, and Scopes 1 to 3 reporting – and the demand for recyclable, mono-material packaging and innovative designs that minimise environmental impact continues to rise.

Key actions for procurement teams 

A robust packaging strategy must balance cost, sustainability, and security of supply. Procurement teams can reduce risks and enhance compliance by transitioning to biodegradable and recyclable materials, sourcing from local and certified suppliers, and implementing circular recycling systems to reduce reliance on virgin materials.

In high-volatility categories like packaging, multi-year contracts can play a critical role in stabilising costs. It is also important to leverage procurement data to inform long-term sourcing strategies, such as forecasting demand more accurately and identifying optimal reordering timings to reduce costs and inventory risk.

No mitigation: 13-14% increase

Without intervention or mitigation measures, businesses can expect to see annual price increases of 13–14% in the packaging category, driven by raw material volatility, trade restrictions, and regulatory pressures.

Tactical negotiation: 2-3% savings

Suppliers can be re-engaged through a targeted sourcing process to revise pricing, helping organisations align procurement terms more closely with material cost indices and market dynamics.

Strategic initiatives: 10-12% savings

The greatest potential for addressing sustained cost pressure and regulatory shifts lies in transitioning to sustainable materials, partnering with certified regional suppliers, and securing multi-year agreements to stabilise pricing and reduce exposure to market fluctuations.

Indirect procurement: From firefighting to future-ready 

2025 is not the year to wait out the storm. With cost pressure intensifying across indirect procurement, CPOs must act decisively. Tactical fixes alone won’t deliver. To defend their margins and future-proof their supply base, organisations must embed resilience, foresight, and structure into their sourcing methodologies.

Drawn from Efficio’s project experience, this report’s findings show that, even in the face of inflationary headwinds, structured intervention can yield double-digit savings and a long-term strategic advantage. The opportunity is clear: with targeted strategies, indirect procurement can move from a cost centre to a value driver.

As market dynamics keep shifting, future editions of this indirect procurement report will continue to examine pressures, trends, and strategies for high-impact categories.

From cost pressure to competitive advantage

Efficio works closely with organisations across Europe to build future-ready indirect procurement strategies that deliver measurable results. Whether you’re facing cost increases in logistics, packaging, or other high-impact areas, our structured sourcing methodologies can help you move from firefighting to foresight.  

Visit our strategic sourcing service page to find out more. 

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