This commentary appeared in the print edition of the Jan. 6, 2020, Journal of Commerce Annual Review and Outlook.
International logistics and trade professionals have grown used to chaos. Uncertain and unplanned outcomes over the past 20 years have become the new normal. This year proved no different, and 2020 will likely prove to be more of the same. Global geopolitical tensions, new IMO low-sulfur fuel regulations, looming labor issues in the digital age, and growing populist and protectionist ideology are the new normal.
Such issues cannot be discounted as immaterial to global supply chains. It’s fascinating to see the breadth of opinion of non-trade pundits when trying to explain the impact of the very real trade war between the US and China. Opinions espousing that punitive tariffs implemented on both sides have not had a material impact on industry, companies, or consumers are misguided. Landed costs have risen. Budgets have been blown. Consumer costs have or will increase, absent any resolution to protectionist, political, and reactionary dogmas currently in fashion. Industries have suffered, and consumers will, too.
2020 will be a transformative year, testing global supply chains and the resiliency of globalism. Will the world revert to a bilateral, isolationist existence? Or will the world continue its march to a global, inclusive future of growing markets and increased opportunities for both industry and consumers? Companies operating global supply chains can expect difficult trading conditions, increased transport costs, more political influence on business outcomes, and chaos to continue to reign.
Protectionism and digitization will be hot-button issues, and how carriers — ocean, rail, and over-the-road — adjust to the chaos will prove monumental to how industry reacts. Carrier networks and service offerings will continue to rationalize in the face of difficult trading environments and technology innovations. Global trade will not get easier in 2020, but perhaps the march towards globalism will continue and innovation will help the industry weather the storms to come.