Books could (and will) be filled about the fallout from Draconian measures that choked the US supply chain and upended consumer confidence. But perhaps no one was more rattled by the supply chain crisis than those that are in charge of keeping its logistics running smoothly.

Specifically, the Chinese government’s fierce approach to lockdowns along with their threat to cut off US medical supplies without notice as retribution for bad press has not so much rippled as it has tsunamied its way across the US shipping sector.

Factory Building Soars

The industry best surfing this wave right now is manufacturing: 

The construction of new manufacturing facilities in the US has soared 116% over the past year, dwarfing the 10% gain on all building projects combined, according to Dodge Construction Network. There are massive chip factories going up in Phoenix… And aluminum and steel plants that are being erected all across the south: in Bay Minette, Alabama (Novelis); in Osceola, Arkansas (US Steel); and in Brandenburg, Kentucky (Nucor). Up near Buffalo, all this new semiconductor and steel output is fueling orders for air compressors that will be cranked out at an Ingersoll Rand plant that had been shuttered for years.

–According to Bloomberg News

Even as the manufacturing wave crests up US cityscapes from Phoenix to Buffalo, some of the real winners are trucking companies and logistics coordinators. 

Rail, shipping lanes, and trucking work in tandem for the concert of rhythmic vein work that is the lifeblood of the US economy. But the obvious beneficiary of bringing factories home is that trucking supply lines will be more crucial than ever before to transporting goods domestically.

Shipping Containers Come Home To Stay

Additionally, this year Blue Eagle covered the COVID-19 related shipping debacle out of Chinese ship ports. We described the constellations of delayed cargo ships and the resulting headache that the ensuing lack of containers caused for truckers all over the US. 

Arguably, this shift in policy and emphasis on domestic manufacturing works to alleviate that fiasco from recurring.

American Made: Political Gains for America

It wasn’t just Chinese threats against medicine and clogged ports that are driving factories back home: China continues to threaten Taiwan, which produces the vast majority of the world’s chips. 

Chip shortages drove the price of both used and new trucks through roof during the post-pandemic economy. 

Chinese military maneuvers in the South China Sea have politicians and manufacturers united in their distaste for chips produced overseas. There is growing agitation on the global stage at increasingly militarized China, which has global leaders scrambling to shore up resources once confidently sourced from our Chinese counterpart.

Even the consistently dovish Biden Administration worked to pass a bill this year that would encourage domestically produced chips and manufacturing jobs. In a statement that White House outlined specific ramifications of this recent bill:

  • Micron is announcing a $40 billion investment in memory chip manufacturing, critical for computers and electronic devices, which will create up to 40,000 new jobs in construction and manufacturing. This investment alone will bring the U.S. market share of memory chip production from less than 2 percent to up to 10 percent over the next decade.
  • Qualcomm and GlobalFoundries are announcing a new partnership that includes $4.2 billion to manufacture chips in an expansion of GlobalFoundries’ upstate New York facility. Qualcomm, the leading fabless semiconductor company in the world, announced plans to increase semiconductor production in the U.S. by up to 50 percent over the next five years.

Blue Eagle is enthusiastic about the increase in American made goods, the ensuing windfall this presents for the trucking industry, and the global-political positioning that this move to increase at-home-manufacturing presents.