Process, Distribution & Logistics Consulting NAICS 541614

Mar 7, 2025 - New Goods Orders and Shipments Rise, But Tariffs Threaten Gains

• The US Census Bureau reported new orders for US manufactured goods increased by $9.8 billion in January 2025, a reprieve that could be brief if the Trump administration’s massive tariff plans are ever fully implemented. It is a 1.7% increase over the previous month. Shipments of manufactured goods pushed higher for the third consecutive month to a total of $592 billion - a 0.4% increase over December. Both figures can be used as proxies for the overall demand of the manufacturing sector and new orders and shipments for goods usually spike around the holidays. Manufacturing logistics consulting services stands to be in high demand going into 2025 with the US government engaging in high-profile and economically disruptive trade and tariff disputes with Mexico, China, and Canada.
• Diversifying supply chains and implementing AI will be top of mind for retailers and manufacturers in 2025, according to industry insiders and observers who spoke to Supply Chain Dive. Trump’s call for increased tariffs and mounting geopolitical strife are leading companies to reshuffle and build redundancies into their procurement networks. Between 2018 and 2024, Vietnam, Mexico, and India have seen significant increases in exports while China’s have fallen, according to consulting firm AlixPartners. Warehouse operators are expected to leverage AI to improve inventory optimization and safety, while manufacturers and retailers hope AI can give them more visibility into their supply chains and improve forecasting. Supply chain challenges in 2025 will include managing higher labor and transportation costs and guarding against increasing cyber threats and cargo theft.

• While the raw materials shortages that posed headwinds for manufacturers during the pandemic are just a bad memory for some, challenges remain, according to Supply Chain Management Review. The growth of data centers and electricity generation capacity needed to power AI has given rise to shortages of some types of electrical and electronic components. Industrial production of electrical equipment used to generate and distribute electricity is now 25% higher than in 2017. The proportion of US computer and electronic products manufacturers that cite raw materials as an impediment to capacity utilization has been rising since the end of 2023, according to US Census data. Manufacturing sector observers are likely to follow any fluctuations in factory capacity utilization closely. Rises in capacity utilization would likely indicate stronger demand but might also signal future raw material shortages, especially among industries already experiencing procurement delays.
• According to a recent Gartner survey of sourcing and procurement leaders, supply disruptions, such as natural disasters and transportation problems, remain the leading risk that could impede procurement operations. A third of respondents ranked macroeconomic factors, such as inflation and economic downturns, as their second most significant risk. At 32% of respondents, geopolitical trends (tariffs, regulatory changes) and compliance issues (regulatory and contractual risks) were tied for the third most significant procurement challenges. Other leading risks included supplier capability and capacity (30% of respondents), cyberattacks and data security (29%), and procurement talent capabilities (24%).