U.S. Southeast and Gulf Coast seaports and industrial distribution hubs will be the prime beneficiaries of U.S. firms shifting supply chains from China due to disruptions from the coronavirus pandemic and higher tariffs from the U.S-China trade war, according to a report published Thursday by real estate and logistics services giant CBRE Inc. (NYSE:CBRE)
CBRE’s comments were echoed by James Tompkins, the founder and chairman of supply chain consultancy Tompkins International and one of the world’s most esteemed supply chain management leaders. COVID-19 and the USMCA will “drive more reshoring and near-shoring in the U.S. and less sourcing from China,” Tompkins said in an email Thursday. “This, coupled with the surge in e-commerce sales driven by COVID-19, will result in a significant increase in distribution and fulfillment centers as well as manufacturing in the U.S.”
In the wake of the disruptions caused by the pandemic, the days of seamless intercontinental supply chains are likely over. A post-COVID-19 supply chain will likely face volatility, uncertainty, complexity and ambiguity, which Tompkins has compressed into the acronym VUCA. Businesses will respond by shortening their supply lines and diversifying countries of origin for their goods, he said.