Regulatory framework – between free market economy and infrastructure security

Affected industries: Industries with large material or energy demands, or industries with highly regulated procurement

Affected supply chain segments: All segments (FTL, LTL, CEP, etc.), and especially those present in the public eye (e.g., those close to end consumers or related to public infrastructure)

What is the importance of regulatory framework in supply chain?

The supply chain industry is greatly affected by regulatory conditions – more so than many others, as supply chain activities often span multiple regions with different laws, while organizations like IATA govern international transportation. This attention from regulatory authorities can impact operations.

Where is this trend going?

Legislation of supply chain varies by region. In general, governments are becoming increasingly involved in markets with tariffs, trade restrictions, financial incentives and similar measures for the sake of overarching political goals. Examples include:

• The Inflation Reduction Act aims to incentivize local sourcing. At the same time, US president Joe Biden announced plans to decrease queueing at the Port of Los Angeles.
• The European Union’s Mobility Package brought new regulations for cross-border trucking. As a result, many German logistics companies have moved their headquarters back to Germany from Eastern Europe.
• In Japan, labor legislation reform will introduce caps for overtime for truck drivers in 2024, encouraging businesses to improve their transportation efficiency.¹
• Logistics infrastructure is a topic of debate, for instance as the German government considers the Chinese shipping company COSCO as a potential investor in the port of Hamburg.

Getting ahead of the trend

Businesses need to look for ways to benefit from changing market conditions. Understanding the implications of new laws is vital to ensure compliance – and maximize potential benefits.