Manufacturing Surges in the USA – The Importance of a 3PL Partnership.

The U.S. economy has recovered considerably since the Great Recession and this trend has continued on into 2018. U.S. manufacturers have particularly benefited from this economic growth, which has been driven by two factors: strength in the global economy as well as tax reform measures at home. The Institute for Supply Management forecasted that the rest of 2018 will “show strong growth in the manufacturing sector.” Executives have forecasted the following approximate increases: 6.6% in revenue, 5% in production capacity, and 10% in capital expenditure.

While these figures are promising, the testimonials from American manufacturers expressing their optimism about the U.S. economy speak even greater volumes. In a Popular Mechanics survey of the 26 largest manufacturers in the United States, respondents reveal that one of the biggest advantages to manufacturing in the United States is “being close to customers,” this means getting products out more quickly, and reducing costs. The latter is the driving force behind this surge; furthermore, many financial analysts argue that the manufacturing sector has now become an integral component to economic growth. Analysts also reason that manufacturers would need to continually invest in the U.S. economy and expand their exports in order to secure growth in their industry.

Analysts maintain that the weakening U.S. dollar has placed a newfound responsibility on domestic manufacturers. One analyst stated that it is “now up to the manufacturing sector to keep the economy afloat by growing its exports and reinvesting the revenue growth from overseas back into the U.S. economy.” With this new responsibility, analysts are optimistic about the future of the manufacturing industry. Tax reform has provided many incentives to repatriate and bring projects back home. This major push for “Made in the USA” products is one that has touched many aspects of the U.S. economy, with consumers willing to support manufacturing here at home.

The expansion of the manufacturing sector has also impacted California in a significant way. If it were its own country, according to its Gross Domestic Product (GDP), California would have the fifth largest economy in the world. It is critical for the manufacturing sector to have a large presence in the largest state, and the growth of the U.S. economy has signaled some promising expansion opportunities in this area. Although manufacturing has been stagnant in major metropolitan areas such as Los Angeles, recent data demonstrates that manufacturing growth has been particularly strong in small to medium-sized cities such as San Rafael and suburbs of the major metropolitan cities of Los Angeles, San Francisco, and San Diego. One analyst claims that small-to-medium sized cities are the “real stars of the manufacturing resurgence,” since it has become more plausible for them to compete with larger cities in manufacturing.

Companies from all over the world—including those on the East Coast of the United States— can expand their manufacturing operations here in California. But in order for this expansion to occur and to take advantage of the booming manufacturing industry, companies have to manage their logistics in a reliable and efficient way. Partnering with third-party logistics providers (3PL services), like Westset Logistics will help manufacturers’ logistical operations by allowing the third-party companies to tailor services to their needs. These companies help manufacturers deal with the shrinking number of trucking companies, manage compliance with government regulations, and most importantly, enable them to participate in the booming economy. 3PLs like Westset Logistics are a critical component of manufacturing growth—they ensure reliability of logistics services and deliver scalabilities. In contrast to in-house logistics services, manufacturing companies can scale their volume, depending on the economic conditions of the time. Scalability is the key to keeping up with the pace of the economy and benefitting from both economic growth and decline; it allows companies not to slow down or over-expand their operations, unless dictated by certain conditions.

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