Procurement, logistics, and supply chain organisations are looking to shift their processes closer to home, as a flurry of tariffs from the Trump administration force the world’s biggest economy into a protectionist stance. As borders become increasingly expensive and risky things to move goods across, organisations are reportedly scrambling for a way to adapt.
The de-globalisation race
This week, Crown Worldwide Group, one of the world’s largest privately-owned logistics companies, announced that it is refocusing its emphasis for growth on services and divisions that are “inherently local.”
The business highlighted President Trump’s efforts to slow globalisation further, noting that “Events in the USA over the past several months have reinforced the prevalence of an anti-globalism sentiment.” Flaring tensions between the US and China, Canada, Mexico (its biggest trade partners) and, more recently, the UK and European Union, are reportedly giving Crown, and organisations like it, pause — provoking them to rethink how they do business. Crown’s Group CEO Jennifer Harvey commented: “Our view is that this won’t last forever — but in a business that is both global and cyclical, the last 60 years have taught us to hedge by investing in different business lines.”
Donald Trump has said that he wants to cultivate an American manufacturing renaissance through the introduction of wide-ranging tariffs and tax breaks. Critics of his policies claim that the higher resulting costs from tariffs will result in higher prices for American consumers.
It’s not just Trump (but he’s not helping)
Trump may be supercharging the deglobalisation trend affecting supply chains, but he didn’t start it. The trend has started to take shape in the post-COVID world, as organisations look closer to home in order to promote resilience and avoid increasingly common disruptions.
Crown established its business 60-years-ago in the midst of the mass globalisation of supply chains, as well as the containerisation of freight, and affordable air travel, which Harvey notes created new horizons that now seem increasingly out of reach. “Today, the world is quite different. Fewer people are moving internationally, with technology that facilitates remote work reducing the need for corporate assignments, and geopolitics making moving overseas more challenging and expensive – a trend that’s likely to continue following recent political events in the USA,” Harvey says.
This combination of technological tools affecting the way we work and an environment increasingly defined by global conflict, compounding the lingering economic impacts of the pandemic, (both coupled with simmering anti-migration sentiment) and the rise of far right governments in places other than the US, is also driving the deglobalisation trend.
“Transitioning supply chains isn’t simple,” observed Eric Linxwiler, Senior Vice President, at TradeBeyond in a recent article. He added out that, in order to respond to tariffs, businesses face the challenge of “establishing new supplier relationships, ensuring quality control, and navigating new regulatory environments requires time, investment, and operational expertise.”
