How the logistics and industry should react in the changing business environment
Any time a new administration starts in the White House, we see a ripple effect across all aspects of our society, but this seems especially true in the business environment.
Early reports indicate that business confidence is high, but several questions remain. First, will the predicted improvements take place? And what happens as the changes occur? Today, we will focus on how the potential changes will affect the logistics industry.
What we expect
As is true of all new administrations, new promises are made and new expectations developed. For now, the DOW is reaching record highs, and confidence is high that administrative changes will bring more manufacturing and more jobs in general to the United States. This will result in a change for the logistics and warehousing industry.
If manufacturing does increase in the United States, supply chains will drastically shorten, which is viewed by a majority as a positive change. More warehousing will also become quickly necessary. This is an existing issue because of the rise in e-commerce, but more manufacturing in the U.S. will increase the need.
More warehousing will mean a higher demand for land for warehouse construction and an increase in the need for improved warehouse technology, and workers. In China, where a lot of goods and products are manufactured, people experienced a similar phenomenon. There is a major shortage of warehousing space, and that is driving up the real estate prices.
Where things could get tricky
In the opinion of some analysts, if discussed border tariffs are put into place immediately, things could get tougher before they get better. If the manufacturing and warehousing is not established before the tariffs are put in place, it will drive up costs drastically because we won’t have the measures in place yet to manufacture products that would have to continue being imported.
Obviously, it is hard to predict how everything will play out, but if the confidence continues then the logistics and warehousing industry will also grow with confidence. No matter what happens in the coming months and years, it is important that the logistics and warehousing industries stay flexible and prepared for the impending changes.
What business changes to do see on the horizon? Will your business be affected by manufacturing moving back to the United States? If you need a logistics provider to support your supply chain from beginning to end, then give us a call. We offer services in both Tulsa and Northwest Arkansas—as well as the surrounding areas.