You Heard It from Me

Written By:
Paul Harencak, Vice President, Operations, LPS Industries

 

As we approach a new year and a new presidential administration, there are issues lurking about that need close monitoring and attention.  Here’s a short list of some of the major issues that I see.

Concerns

• Supply Chain – continued worries about political sanctions and piracy in and around the Red Sea and Suez Canal as well as the tensions between China and Taiwan.  Not to mention the Middle East wars.

For many sea freight companies this means cargo is wrapping around Africa or finding alternative routes, increasing ship time and freight costs.

-tariffs can disrupt prices and supply of goods if invoked by the new administration.  This has to be carefully monitored so as not to cause an increase in inflation.

• Reshoring- this, in combination with the tariffs, is a concern because for many parts and goods, as there isn’t any capital equipment capable of making goods stateside.  To get up to speed could take years.
• Cybersecurity- continuing threats and execution of ransomware and hacking of personal information for individuals and corporations will require constant monitoring.  This leads to increased costs for cyber security

and preemptive actions to secure identity and financial transactions.

• Energy- one of the most important concerns of 2025 for the United States. Without the increase in domestic drilling and fracking the country will face continued costs and dependence from foreign petroleum.  This means higher

EVERYTHING prices as the world needs gas, oil and refining to make the products we need, including feeding the population!

• Recycling- the rate of recycling is less than 10% in the United States!  Efforts to educate and execute this worthwhile task needs to be re-investigated  and redesigned.  Too many regulations and money is being spent for far too less a payback.

Opportunities

The concerns listed above are also the opportunities for US-based manufacturers.  As a country, we have the infrastructure and the labor force to combat geo-political issues and invest in capital equipment.

For example, tariffs can be a great incentive for buyers to use domestic suppliers, avoiding extra costs and extended freight time.

The question is: Do we want to make the investment in US manufacturing?  I say it’s our only option.