Deciphering how markets will react to tariffs is an imprecise exercise at this point. However, Interact Analysis is offering advice in a recent article, Trump’s Tariffs: Six Key Effects on the Warehouse Automation Market.
Here are a few of their thoughts: (excerpted below)
Growth of Third-Party Logistics (3PL) Firms and Increased Automation Investments
As tariffs add complexity to supply chains, more companies are likely to outsource logistics to third-party logistics (3PL) providers that specialize in managing trade policy shifts and supplier diversification. This trend is expected to drive greater adoption of automation by 3PLs, particularly those handling cross-border trade.
Given the diverse range of customers that 3PLs serve and the wide variety of stock-keeping unit (SKU) profiles they manage, these firms tend to favor flexible automation solutions such as person-to-goods autonomous mobile robots (AMRs) and right-sized packaging systems.
Increase in Inventory Levels and Warehouse Demand
Tariffs often lead to supply chain restructuring as businesses seek alternative sourcing strategies. To avoid potential disruptions, many companies are expected to build up inventory reserves, leading to increased warehouse occupancy.
We have already observed this trend in the two months leading up to “Liberation Day,” and we anticipate it will accelerate due to the scale and scope of the new tariffs. The resulting rise in inventory levels will reduce warehouse vacancy rates and drive-up rent prices in key logistics hubs. This, in turn, may lead to increased warehouse construction activity to accommodate growing inventory needs.
Reduced Investment in Durable Manufacturing Warehouse Automation in Southeast Asia, Canada, and Mexico
Before the latest tariffs, manufacturers had been shifting production to Southeast Asia, Canada, and Mexico in response to the US- China trade war and post-pandemic nearshoring trends. These regions had been benefiting from increased investment in warehouse automation to support durable manufacturing operations.
However, with renewed trade policy uncertainty, businesses are likely to pause large-scale automation investments in these regions. Until there is greater clarity on future tariff levels, many companies will delay expansion plans, slowing the deployment of warehouse robotics and automated systems in these locations.
