The year 2024 is the election year in the USA, and Americans are going to elect their president for the next four years. Where the election is a purely political and democratic process, its impact on different industries in the country cannot be neglected. Many industries are expected to be affected by pre and post-election events, one of which is the logistics industry. In this article, we’ll take a look at anticipated projections of the logistics industry in the election year. We’ll also explore different ways the election can impact the logistics and transportation sector.
Logistics industry projections in the election year
From a larger perspective, we can expect changes in trade and tax policies after the election that may impact the shopping behavior of consumers. The Government that will be formed as a result of the election may contemplate changing interest policies and amending federal regulations that can impact the logistics industry at both lower and upper levels. Here are some potential ways through which the elections can affect the logistics industry:
Free Trade policy
Although it’s too early to predict, the elections could have a significant impact on the free trade policies. If the newly formed Government takes initiatives against free trade, it can lower the options available for the consumers when it comes to foreign, low-priced merchandise. This may decrease consumer spending, resulting in less business for logistics companies. In this scenario, the logistics companies may think to have consistently changing shipping rates.
However, in case of pro free trad policies, the country may have increased number of products, giving logistics business more loads to ship, keeping them in business, but the exact effect is remained to be seen.
Amendments in Tax Codes
There’s a thinking among political people that it could be in the interest of the country to eliminate/reduce various types of income taxes and turn them into a flat tax. This tax can be up to 20% of the value of purchased merchandise. If this happens, it might boost people’s purchasing power. However, it may have long-lasting effects on the prices of goods. When purchasing power increases, the shipping of goods will also increase, and the logistics industry can go upwards.
On the other hand, increasing income tax may negatively impact the industry because it might decrease purchasing power and, eventually, shipping frequency. Still, observing the exact effect of tax codes will require us to go beyond the elections.
Changes in Logistics regulations
Logistics regulations, like environmental laws, labor regulations, and traffic rules, are likely to change post-election. If this happens, the environmental regulations may get strict, requiring logistics businesses to invest more to be sustainable, negatively impacting their efforts to grow and expand. If the new Government decides to implement strict policies regarding carbon emissions, the companies may have to bear additional costs to adopt sustainable technologies.
Another prominent issue that is likely to rise post-election is safety compliance. If the new administration mulls over introducing new safety laws, logistics companies may have to invest more into their compliance department.
As inflation is rising, labor laws are expected to change after elections. The new administration may consider increasing minimum wages, introducing worker protection policies, and easing duty regulations. All these points may impact the cost efficiency of logistics businesses.
Infrastructural Development
Infrastructural development is a key point of the manifesto of all parties in the country. If the administration largely invests in the developing infrastructure across the country (like roads, railroads, ports, and shipping facility), the logistics industry can largely benefit from it. It will help the logistics sector to speed up transportation processes with reduced costs.
Technological Advancements
Many trucking and logistics startups want to adopt modern and sustainable technologies, like AI, IoT, renewable energy, and self-driving vehicles, but they lack financing for them. If the new administration fulfills its commitments to helping the logistics industry embrace technological advancement, the industry can enter the era of artificial intelligence.
Conclusion
The abovementioned points are just a small picture of the likely impacts of the upcoming election on the logistics industry. The exact effects can only become clear after the election. We can only anticipate the best!
