Will Election Affect Logistics

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Will the Election Affect Logistics?

A common theme in the news today has to deal with Donald Trump and Hillary Clinton and their stance on trade. Specifically Trump and his proposed tariffs on Mexico and China. If we were to start taxing China and Mexico what would that do to warehousing and transportation in the US?

First off, we need to make some assumption. Let’s assume that the taxing China and Mexico will bring manufacturing back to the US and not to another place like Europe or Canada. Let’s also assume that bringing jobs back to the US increases wages, but at the same time raises prices of the products produced. So where does that leave logistics in the US?

Currently, most products are shipped from China on a container across the ocean, to a port, where the container is transferred to rail, from there it is railed to a railyard close to the final destination where it will be trucked to a warehouse and be prepared for delivery. Once the product is required it will usually get on a truck and sent to its final destination. How will this change?

The most evident change will be a decrease in rail, since not as many containers will be coming in from overseas. This gap will be filled by companies in the US producing and shipping to other companies in the US, by long haul trucking. At the same time short haul trucking from the rail yard to the warehouse will decrease. Warehouses should not be effected since either way product will need to be stored. The biggest effect will come from either economic prosperity or decline from new trade deals. Will more money for Americans to spend be greater than the increase cost of production? For that we will leave it to the economist. Without taking that into consideration we would expect:

•Rail to decline

•Long haul trucking to increase

•Short haul trucking to decrease

•Warehousing remains unaffected

By: John McCardle

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