If you’ve already read our latest blog, then you’re aware by now that pre-election uncertainty has led to a noticeable slowdown in spending from consumers and businesses alike. And if recent years have taught us anything, it’s that the shipping world is everything but predictable, and this becomes even more true during election years. With so many unknowns in play, preparing for what happens after the votes are tallied is critical to keeping your supply chain running smoothly.

Because, let’s face it, uncertainty is nothing new in the freight world, however, a unique advantage that we can often anticipate and can even pinpoint is when the uncertainty will peak— falling on November 5th this year, when the election results are announced. After that, the freight market might shift in unexpected ways, making it essential for businesses to start planning now.

But before getting your teeth stuck into this blog, why not go and read our previous blog all about “How Presidential Elections Impact Freight Demand and Operations“? And come back to this blog, where we will recap some of those points but also explore how businesses can prepare their supply chain for potential changes in the post-election freight market.

The Post-Election Freight Market: Change and Uncertainty 🗳

So let’s recap what we predict from our last blog: once the ballots have been counted and the dust has started to settle following the election, the freight market will undoubtedly see changes, face new challenges and welcome new opportunities too, including emission and fuel standards, improved infrastructure, labor regulations, tariff and trade wars and global supply chain effects.

But, it’s important to remember that while we can make these educated guesses, like the ones mentioned above, predicting the exact trajectory of the freight market remains extremely difficult. The outcome of the election—and which policies are put into action—will heavily influence the direction of the market, and all we can do is try and prepare ourselves and our businesses as best as we can.

One Prediction We Can Make With Confidence In This Year’s Post-Election Freight Market 🚚

So, we all know that politicians talk the talk, but it’s difficult to predict exactly how they will govern once in office, it’s not like no politician has ever lied to us, right? However different the two major parties are this year, they both appear to share a few, we want to reiterate a few common grounds on economic issues, though they differ in degrees. Both parties, for instance, emphasize antiglobalization policies to some extent, which will lead to increased trade barriers. Meaning that we can somewhat predict the outcome of the impact on international trade with a degree of confidence. As both parties share a focus on international trade, we can assume the impacts will be on a large scale. We’re already starting to see businesses prepare for these changes through increasing activity in nearshoring efforts.

What is Nearshoring?

Nearshoring refers to the outsourcing of business processes to companies in nearby countries, often ones that share a border or are geographically closer to the target country as opposed to countries much further away. This trend is reshaping supply chains, especially as trade barriers become a growing concern.

So, How Can You Prepare Your Supply Chain for a Post-Election Freight Market?

The post-election period and the next few months will bring about new economic conditions, and businesses need to be proactive in preparing their supply chains. Let’s take a look at how you can start to prepare:

Contingency Planning 📝

First and foremost, contingency planning is essential with the potential for disruptions—whether from shifts in trade policy, political changes, market fluctuations or any of the other challenges we mentioned in our latest blog—having a solid contingency plan is crucial for keeping your supply chain resilient.

Nearshoring 🌎

We touched on this earlier, but going back to nearshoring and domestic manufacturing, this is one way that businesses can prepare their supply chain. If your business relies on manufacturing or production in a country far from home, then this move brings production closer to home. Ultimately reducing reliance on complex global networks and potentially leading to faster shipping times and stronger relationships with suppliers.

But it’s not that simple… this shift requires a strategic rethink of your supply chain. Analyze your current setup, identify potential bottlenecks, and leverage scenario modeling to understand how different changes could impact your business. By proactively adapting your supplier networks, pricing strategies, and inventory management, you can ensure your supply chain is ready to thrive in this new era of localized manufacturing. And if you can make nearshoring work for your bussiness, then you can get ahead of the global trade barriers that might intensify with a new president.

Identify Strengths and Weaknesses in Your Supply Chain 💪 👎

Look at historical data to understand where the breaking points lie within your supply chain. Perhaps a previous election or the pandemic taught you lessons in how to utilize alternative efforts to manage flow through your entire supply chain. When you identify your strengths and weaknesses, you can design a solution to handle disruptions and combat those pinch points in your supply chain.

“Knowledge is power” – Sir Francis Bacon

Consumer Visibility 👀

Supply chains rely on a ton of interconnected parts, and while businesses understand the importance of supplier visibility, it’s equally as crucial to recognize the impact on consumers when building a strong supply chain, which is at times overlooked. A smart supply chain design involves regularly assessing inventory levels and demand trends to anticipate potential shortages or product obsolescence.

To effectively prepare for the shifting dynamics of a post-election freight market, companies must employ technology solutions that allow them to monitor inventory, forecast future needs, and determine the right buffers to handle fluctuating conditions.

Conclusion 💭

One of the clearest indicators of how the market perceives the new president’s impact will be in the stock market’s reaction in the days following the election. If stocks plummet, it could signal that the market views the new president as a potential threat to economic stability. On the other hand, if stocks remain steady or even rise, it suggests confidence in the president’s ability to support the economy.

In any case, it’s important to keep a close eye on buyer trends and be ready to adapt your strategies as the new president’s policies begin to take shape. While the economic impact will likely be gradual, adjusting your supply chain and business operations early can ensure you stay ahead of the curve.

We also want to throw a disclaimer out there that, this isn’t us telling you to move your production closer to home, or to invest in a ton of new technology right now. But, we just want to highlight the ways that other businesses are preparing for predicted new policies. The best thing you can do right now is contingency plan, that way there’s no hasty decisions on something that might not happen. Perhaps gather prices and build a plan that’s ready to be implemented if need be.

 

Need help with any of your specialized shipments during the election period?

At PEI, we’re experts in dealing with specialized freight and can handle yours with any custom requirements.