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Shiploads From The Supply Side
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By: Darrin Duber-Smith

 

When we talk about marketing, it is almost always about companies that operate further downstream in the supply chain suchas  retailers and branded product manufacturers.These are the cool companies to talk about since we see them every day. Indeed the suppliers of components and ingredients, packaging companies and others the "supply side" of the equation get very little respect from the media.

 

Image result for rodney dangerfield no respect

 

But it's these sorts of companies that make the stuff that goes into the products we buy, and we here at KnowNow! Marketing endeavor to cover these entities at least somehow. Even less celebrated are the logistics companies that make efficient supply chain management possible, and these are happy times indeed for those moving things from A to Z in the industrial sector. Whether it be moving industrial goods on land, over water, or through the air shipping is gaining steam at a rocket pace not seen in many years. 

 

Image result for shipping air land sea

 

Why is this happening? A simple matter of gross domestic product, our highly-flawed but best available measure of an economy's overall well being. The U.S. economy grew 3.3% last quarter, which means that this year will be the best we've had since before the Great Recession. And more consumer spending at the very bottom of the supply chain works its way up the chain, all the way to the suppliers, a concept called "derived demand". Demand for supply side goods and services increases when consumer demand increased and therefore is derived from that end-user demand. 

 

Image result for broken records

 

Some ports are breaking records for cargo volume, and ground freight carriers have raised prices by over 5% to reflect rising demand for trucked and rail freight. This is great news for everyone, and most economists would agree that a healthy economy combined with lower business taxes will likely stimulate income growth and hiring even more than it has already this year. And this news is particularly good for 2017-2018 graduates who are facing the healthiest job market in over a decade. Gainfully employed graduates will spend more. And so it goes until the next recession happens, which is unpredictable, but nevertheless inevitable.

 

Discussion: Can you name any business-to-business shipping companies? They do tend to be rather obscure. Have you noticed any visible positive changes in the economy over the past two years? Discuss a few of these.