Fiscal Cliff deal is reached but supply chain challenges remain

With Congress waiting until past January 1 to hammer out a deal for the so-called Fiscal Cliff, there is at least one less problem to worry about for now anyhow.

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I originally was going to use a headline along these lines for this column: “New Year but same old problems” or something to that effect.

But with Congress waiting until past January 1 to hammer out a deal for the so-called Fiscal Cliff, there is at least one less problem to worry about for now anyhow.

Financial constraints and limitations are not new by any stretch and are, of course, a fact of life in the supply chain. So to say that taxes are not going up in most cases as a result of Washington lawmakers, you know, actually passing something of significance should not be understated. Is this deal perfect, no? But as many pundits and politicians have stressed, no deal would have clearly been the worst deal of all.

From September on, the drumbeat for a Fiscal Cliff resolution got louder and louder. At various industry conferences carrier executives, shippers, Wall Street analysts, and lobbyists stressed that something needed to get done. While the ink is still drying on the legislation, how things play out from here remains to be seen.

I looked up a previous column discussing what might transpire should a deal not be reached, and that outlook was decidedly bleak.
One prevalent theme was that if nothing is done, then nothing good can come out of it for supply chains.
“We are not looking forward to the domino effect which would happen if this kicks in,” said National Industrial Transportation League President Bruce Carlton in November. “It is going to be disruptive. How do you plan for it? These types of cuts have the potential to negatively impact a lot of things.”
NITL leadership stressed that this directly related to supply chain and transportation stakeholders getting the services they need in order to continue doing what they do or U.S. commerce would be affected and the costs for operating businesses and supply chains would be hindered as will U.S. consumers subsequently.
Aside from the Fiscal Cliff being signed off on, one thing that is certain, however, is that our economy still has a long way to go before we can say the recovery has been successful—and really mean it when we say it.

We saw good but not great holiday season retail sales numbers, which felt the impact of Hurricane Sandy, and we are seeing strength in housing numbers, which could be a boon for sales and supply chains on multiple fronts, especially in the way of things like freight volumes, which have been flat or slightly up or down for more than a long time now.

Throw the regulatory roadmap, fluctuating energy prices, and other things like the emergence of e-commerce driven supply chains and modal shifting, among others, it makes you realize that 2013 looks to be shaping up as an interesting year for supply chain operations.

 


About the Author

Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman

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