Industry praises Senate passage of infrastructure bill
Trade groups point to funding for highway projects, high-speed internet, and the DRIVE-Safe Act as important steps in supporting the supply chain economy.
Logistics and transportation industry trade groups welcomed Tuesday’s passage of a roughly $1 trillion infrastructure package in the Senate, calling it a long overdue step toward revitalizing the nation’s infrastructure and supporting the supply chain economy.
The bill passed 69 to 30, with 19 Republicans joining all 50 of their Democrat colleagues to support the Infrastructure Investment and Jobs Act. The legislation reauthorizes spending on existing federal public works programs and adds $550 billion for additional projects that address roads and bridges, broadband internet expansion, safety, and energy production, among others.
Representatives from the trucking and food distribution industry lauded the bill’s inclusion of the DRIVE-Safe Act, a program designed to expand the available pool of truck driver candidates nationwide.
“We are particularly pleased to see the inclusion of the DRIVE-Safe Act pilot program, which is a good first step in helping to address our nation’s growing truck driver shortage,” Mark Allen, president and CEO of the International Foodservice Distributors Association (IFDA), said in a statement. “Foodservice distributors pay, on average, in excess of $70,000 annually plus benefits for professional drivers, which is a great bridge to America’s middle class.”
American Trucking Associations (ATA) President and CEO Chris Spear added: “Passage of this bipartisan infrastructure bill is a groundbreaking step toward revitalizing America’s decaying roads and bridges, supporting our supply chain and economy with the foundation they need to grow, compete globally, and lead the world. The bill also contains significant measures to grow and strengthen trucking’s essential workforce.”
Improving surface transportation and expanding broadband coverage also rank high for industry leaders. Representatives from the Association of American Railroads (AAR) pointed to the inclusion of funding for safety and improvement projects on the nation’s railways and highways, as well as funding for research into helping railroads reduce their greenhouse gas emissions, as important steps forward.
The Telecommunications Industry Association (TIA) praised the inclusion of “cricital funding” to build and develop secure, high-speed networks. The legislation includes $65 billion to fund expanded access to broadband.
“As the country continues to battle the Covid-19 pandemic, the importance of building secure high-speed networks to increase and improve access for all Americans cannot be overstated,” TIA’s Vice President of Government Affairs, Melissa Newman, said in a statement. “It is imperative that the House quickly passes this legislation allowing funds to be used in an efficient, targeted manner to expand reliable connectivity to every American home and business.”
Not everyone is overjoyed at the outcome, however. The Owner-Operator Independent Drivers Association (OOIDA), which represents small-business truckers, said the legislation fails to address a lack of truck parking nationwide, which the group says is a vital safety issue for its members. An amendment to address the issue—sponsored by Senators Mark Kelly (D-Ariz.) and Cynthia Lummis (R-Wyo.)—was excluded from the package.
“Truckers are routinely expected to simply be thankful for more highway funding and accept the fact all their unique needs are ignored time and time again. Years of inaction on addressing the lack of truck parking has created a nationwide crisis that threatens the safety of millions of professional drivers, and increasingly the motoring public,” according to Todd Spencer, president and CEO of OOIDA. “By failing to include the Kelly/Lummis amendment, the Senate has missed yet another opportunity to enact meaningful policies that would immediately improve drivers’ lives and highway safety.”
Other small-business groups expressed concerns as well, particularly when it comes to funding the bill. Among several measures, lawmakers will re-purpose some existing Covid-19 funds to help defray the cost of the bill. Small Business Majority, which represents more than 85,000 small businesses nationwide, said the move will hurt many small businesses still struggling with the effects of the pandemic.
“Although the bipartisan infrastructure bill is a necessary first step to economic recovery, we are disappointed that the package will be paid for in part by pulling billions of much-needed dollars from the U.S. Small Business Administration’s (SBA) Economic Injury Disaster Loan (EIDL) grant and loan programs,” according to John Arensmeyer, founder and CEO of Small Business Majority. “While economies are reopening around the country, business is not back to ‘normal’ for many small-business owners. There is still a substantial pool of money left in the pot of emergency relief funds, now inaccessible to hard-hit small businesses waiting and hoping for this already allocated assistance.”
Just 29% of supply chain organizations have the competitive characteristics they’ll need for future readiness, according to a Gartner survey released Tuesday. The survey focused on how organizations are preparing for future challenges and to keep their supply chains competitive.
Gartner surveyed 579 supply chain practitioners to determine the capabilities needed to manage the “future drivers of influence” on supply chains, which include artificial intelligence (AI) achievement and the ability to navigate new trade policies. According to the survey, the five competitive characteristics are: agility, resilience, regionalization, integrated ecosystems, and integrated enterprise strategy.
The survey analysis identified “leaders” among the respondents as supply chain organizations that have already developed at least three of the five competitive characteristics necessary to address the top five drivers of supply chain’s future.
Less than a third have met that threshold.
“Leaders shared a commitment to preparation through long-term, deliberate strategies, while non-leaders were more often focused on short-term priorities,” Pierfrancesco Manenti, vice president analyst in Gartner’s Supply Chain practice, said in a statement announcing the survey results.
“Most leaders have yet to invest in the most advanced technologies (e.g. real-time visibility, digital supply chain twin), but plan to do so in the next three-to-five years,” Manenti also said in the statement. “Leaders see technology as an enabler to their overall business strategies, while non-leaders more often invest in technology first, without having fully established their foundational capabilities.”
As part of the survey, respondents were asked to identify the future drivers of influence on supply chain performance over the next three to five years. The top five drivers are: achievement capability of AI (74%); the amount of new ESG regulations and trade policies being released (67%); geopolitical fight/transition for power (65%); control over data (62%); and talent scarcity (59%).
The analysis also identified four unique profiles of supply chain organizations, based on what their leaders deem as the most crucial capabilities for empowering their organizations over the next three to five years.
First, 54% of retailers are looking for ways to increase their financial recovery from returns. That’s because the cost to return a purchase averages 27% of the purchase price, which erases as much as 50% of the sales margin. But consumers have their own interests in mind: 76% of shoppers admit they’ve embellished or exaggerated the return reason to avoid a fee, a 39% increase from 2023 to 204.
Second, return experiences matter to consumers. A whopping 80% of shoppers stopped shopping at a retailer because of changes to the return policy—a 34% increase YoY.
Third, returns fraud and abuse is top-of-mind-for retailers, with wardrobing rising 38% in 2024. In fact, over two thirds (69%) of shoppers admit to wardrobing, which is the practice of buying an item for a specific reason or event and returning it after use. Shoppers also practice bracketing, or purchasing an item in a variety of colors or sizes and then returning all the unwanted options.
Fourth, returns come with a steep cost in terms of sustainability, with returns amounting to 8.4 billion pounds of landfill waste in 2023 alone.
“As returns have become an integral part of the shopper experience, retailers must balance meeting sky-high expectations with rising costs, environmental impact, and fraudulent behaviors,” Amena Ali, CEO of Optoro, said in the firm’s “2024 Returns Unwrapped” report. “By understanding shoppers’ behaviors and preferences around returns, retailers can create returns experiences that embrace their needs while driving deeper loyalty and protecting their bottom line.”
Facing an evolving supply chain landscape in 2025, companies are being forced to rethink their distribution strategies to cope with challenges like rising cost pressures, persistent labor shortages, and the complexities of managing SKU proliferation.
1. Optimize labor productivity and costs. Forward-thinking businesses are leveraging technology to get more done with fewer resources through approaches like slotting optimization, automation and robotics, and inventory visibility.
2. Maximize capacity with smart solutions. With e-commerce volumes rising, facilities need to handle more SKUs and orders without expanding their physical footprint. That can be achieved through high-density storage and dynamic throughput.
3. Streamline returns management. Returns are a growing challenge, thanks to the continued growth of e-commerce and the consumer practice of bracketing. Businesses can handle that with smarter reverse logistics processes like automated returns processing and reverse logistics visibility.
4. Accelerate order fulfillment with robotics. Robotic solutions are transforming the way orders are fulfilled, helping businesses meet customer expectations faster and more accurately than ever before by using autonomous mobile robots (AMRs and robotic picking.
5. Enhance end-of-line packaging. The final step in the supply chain is often the most visible to customers. So optimizing packaging processes can reduce costs, improve efficiency, and support sustainability goals through automated packaging systems and sustainability initiatives.
That clash has come as retailers have been hustling to adjust to pandemic swings like a renewed focus on e-commerce, then swiftly reimagining store experiences as foot traffic returned. But even as the dust settles from those changes, retailers are now facing renewed questions about how best to define their omnichannel strategy in a world where customers have increasing power and information.
The answer may come from a five-part strategy using integrated components to fortify omnichannel retail, EY said. The approach can unlock value and customer trust through great experiences, but only when implemented cohesively, not individually, EY warns.
The steps include:
1. Functional integration: Is your operating model and data infrastructure siloed between e-commerce and physical stores, or have you developed a cohesive unit centered around delivering seamless customer experience?
2. Customer insights: With consumer centricity at the heart of operations, are you analyzing all touch points to build a holistic view of preferences, behaviors, and buying patterns?
3. Next-generation inventory: Given the right customer insights, how are you utilizing advanced analytics to ensure inventory is optimized to meet demand precisely where and when it’s needed?
4. Distribution partnerships: Having ensured your customers find what they want where they want it, how are your distribution strategies adapting to deliver these choices to them swiftly and efficiently?
5. Real estate strategy: How is your real estate strategy interconnected with insights, inventory and distribution to enhance experience and maximize your footprint?
When approached cohesively, these efforts all build toward one overarching differentiator for retailers: a better customer experience that reaches from brand engagement and order placement through delivery and return, the EY study said. Amid continued volatility and an economy driven by complex customer demands, the retailers best set up to win are those that are striving to gain real-time visibility into stock levels, offer flexible fulfillment options and modernize merchandising through personalized and dynamic customer experiences.
Geopolitical rivalries, alliances, and aspirations are rewiring the global economy—and the imposition of new tariffs on foreign imports by the U.S. will accelerate that process, according to an analysis by Boston Consulting Group (BCG).
Without a broad increase in tariffs, world trade in goods will keep growing at an average of 2.9% annually for the next eight years, the firm forecasts in its report, “Great Powers, Geopolitics, and the Future of Trade.” But the routes goods travel will change markedly as North America reduces its dependence on China and China builds up its links with the Global South, which is cementing its power in the global trade map.
“Global trade is set to top $29 trillion by 2033, but the routes these goods will travel is changing at a remarkable pace,” Aparna Bharadwaj, managing director and partner at BCG, said in a release. “Trade lanes were already shifting from historical patterns and looming US tariffs will accelerate this. Navigating these new dynamics will be critical for any global business.”
To understand those changes, BCG modeled the direct impact of the 60/25/20 scenario (60% tariff on Chinese goods, a 25% on goods from Canada and Mexico, and a 20% on imports from all other countries). The results show that the tariffs would add $640 billion to the cost of importing goods from the top ten U.S. import nations, based on 2023 levels, unless alternative sources or suppliers are found.
In terms of product categories imported by the U.S., the greatest impact would be on imported auto parts and automotive vehicles, which would primarily affect trade with Mexico, the EU, and Japan. Consumer electronics, electrical machinery, and fashion goods would be most affected by higher tariffs on Chinese goods. Specifically, the report forecasts that a 60% tariff rate would add $61 billion to cost of importing consumer electronics products from China into the U.S.