The next time you buy a loaf of bread or a pack of paper towels, take a moment to consider the future that awaits the plastic it’s wrapped in. That future isn’t pretty: Given that most conventional plastics take up to 400 years to decompose, in all likelihood, that plastic will spend the next several centuries rotting in a landfill somewhere.
But a Santiago, Chile-based company called Bioelements Group says it has developed a more planet-friendly alternative. The firm, which specializes in biobased, biodegradable, and compostable packaging, says its Bio E-8i film can be broken down by fungi and other microorganisms in just three to 20 months. It adds that the film, which it describes as “durable and attractive,” complies with the regulations of each country in which Bioelements currently operates.
Now it’s looking to enter the U.S. market. The company recently announced that it had entered into partnerships with South Carolina’s Clemson University and with Michigan State University to continue testing its products for use in sustainable packaging in this country. Researchers will study samples of Bio E-8i film to understand how the material behaves during the biodegradation process under simulated industrial composting conditions.
“This research, along with other research being conducted in the United States, allows us to obtain highly reliable data from prestigious universities,” said Ignacio Parada, CEO and founder of Bioelements, in a statement. “Such work is important because it allows us to improve and apply academically driven scientific research to the application of packaging for greater sustainability packaging applications. That is very worthwhile and helps to validate our sustainable packaging technology.”
After a dismal 2023, the U.S. economy finished 2024 in pretty good shape—inflation was in retreat, transportation fuel costs had fallen, and consumer spending remained strong. As we begin the new year, there’s a lot about the economy to like, says acclaimed economist Jason Schenker. But that’s not to suggest he views the future with unbridled optimism. As the year unfolds, he says he’ll be keeping a wary eye on several geopolitical and supply chain risks that have the potential to spoil the party.
Schenker, who serves as president of Prestige Economics and chairman of The Futurist Institute, is considered one of the best economic minds in the business. Bloomberg News has ranked him the #1 forecaster in the world in 27 categories since 2011. LinkedIn named him an official “Top Voice” in 2024, and almost 1.3 million students have taken his LinkedIn Learning courses on economics, finance, risk management, and leadership.
Schenker is also the author of more than 30 books, including 15 bestsellers on supply chain, finance, energy, and the economy. He has been interviewed several times by this magazine, including a Q&A on the 2024 economic outlook last February, and has been a guest on DCV’s “Logistics Matters” podcast. In addition, he has provided economic and material handling forecasts for the trade association MHI since 2014.
Last month, Schenker spoke with DC Velocity Group Editorial Director David Maloney on the 2025 outlook for the economy in general and the supply chain and material handling sectors in particular.
Q: Jason, you joined us last year at about this time to share your outlook for 2024. And I have to say that your projections were pretty much spot on.
A: That’s very kind of you to say. I had expected we would see payrolls slow but still be positive, and that the unemployment rate would rise. We actually saw all of those things. We also predicted positive GDP [gross domestic product] growth, a slow easing of inflation rates, and a move toward interest rate cuts. And you know, we’ve seen all of those things, too.
2024 was a year that was, in the end, a pretty good year for the economy. GDP looks solid. Jobs gains are still continuing, although they’ve slowed. The unemployment rate has gone up, but it’s still low. So it was still a really positive year.
And, of course, our biggest concerns going into 2024 were around the political and geopolitical risks, making the swift and decisive end to the U.S. presidential election really important for reducing economic uncertainty and the risk of political violence. But that still leaves geopolitical risks, which are likely to hang over our heads in 2025.
Q: As you said, the U.S. economy is in fairly good shape. But as we begin 2025, what’s your outlook for the new year?
A: I think we’re probably going to see GDP grow at a modest pace, although the pace could slow a bit from what we saw in the past year in the U.S. I think we’re going to see interest rates go down. Inflation will probably ease, although I think we could see the inflation rate pop up briefly in the near term. Still, by some time in the second quarter, the year-on-year inflation rates are likely to be quite a bit lower. We also see interest rates easing. So it’s not a horrible outlook, because as interest rates go down, we’re also likely to see more business investment, manufacturing activity, and material handling spending.
Q: Of course, the gorilla in the room—as we speak in December—is the president-elect’s proposed tariffs and their potential impact on supply chains. We’ve heard China, Mexico, and Canada mentioned as possible targets for tariffs. Is this just a negotiating tactic, or are those really serious proposals by the incoming administration?
A: I think there are a couple of things to consider. One of the graduate degrees I did was in negotiation and conflict resolution. In terms of negotiation tactics, president-elect Trump is trying to position himself as a “distributive negotiator,” which means there’s going to be a push for a winner-takes-all kind of outcome.
Now, in reality, that’s not what’s likely to happen, right? But strong posturing may be enough to spur some of the change he’s looking for. In other words, what he actually wants probably isn’t blanket tariffs on all Canadian and Mexican goods. I think his real focus is on halting the trans-shipment of goods from China through Mexico in order to circumvent U.S. tariffs. I believe that’s a top priority for him—along with addressing things like the border crisis and fentanyl imports.
So if you start off a bit blustery and people are unsure of how things are going to go, they may be more willing to collaborate to get to a deal. And I think what we’re really seeing from the incoming administration is posturing that’s designed to spur quick action. But I also think that while politicians say many things, what they actually end up doing is often very different from what they pledged or promised or threatened. What we do know is that with President Trump’s first administration, that kind of posturing and threat-making got results.
Q: So how should supply chain professionals prepare for these proposed tariffs? We know that many companies stepped up their imports in the final months of 2024 to get ahead of new tariffs. Should companies rethink their supply chains and the amount of inventory they carry overall?
A: Well, there are a couple of things I’d say to this point. The first is, if we look at the MHI BAI [the Material Handling Industry Business Activity Index by Prestige Economics], which is a monthly economic indicator Prestige Economics produces in conjunction with MHI, it shows that inventories have actually fallen a lot in the last couple of years. So even though we see the values of inventories going up, especially in some of the government data, what we actually see in the survey data—which is based on responses from leading material handling and supply chain executives—is that they’ve been running down their WIP (work-in-progress) inventory. They are also running down their backlog to get shipments out the door.
So in terms of how the industry should be thinking about inventory, I think there are some important factors to keep in mind. One is that the U.S. and China very much seem to be on a collision course. For all the huffing and puffing and bluster around tariffs being imposed on a whole host of countries—whether it’s Canada, Mexico, or any of our global allies and key trade partners in Europe and Asia—the situation with China is very different. I think that’s where the hammer is most likely to come down.
I would contend that being exposed to China in your supply chain is going to be risky business going forward, because of a high potential for a kinetic conflict with China over Taiwan at some point in the near to medium term.
Q: The post-election polls revealed that a lot of Americans voted with their wallets. They felt prices were too high, and that led them to vote the way they did. Do you think prices will drop under the new administration, as many hope?
A: Nope.
So here’s the thing, there’s price and there’s inflation. If you’re expecting prices to go down, that’s deflation, and that almost never happens. By the way, no one wants that—deflation is actually worse than inflation.
So let me lay it out. In the Q3 2024 U.S. GDP report, consumption—people buying stuff—accounted for a full 68.9% of U.S. GDP. Well, that’s really good news—jobs are plentiful, wages are at record highs, and the stock market and home prices are at record highs. So everybody’s out there spending, which is great. With inflation, the dollars you have today will be worth less in the future, which means you’re actually a bit incentivized to spend them now.
However, you don’t want rampant inflation, because that makes it very difficult for businesses to plan, and there are also massive social impacts. That’s what happened in 2024 when grocery prices went through the roof, right? But a little inflation is OK, because it incentivizes you to spend now and not hoard your money.
But now let’s flip it on its head. Let’s say prices all go down. Well, if you know that you’re going to be able to buy more stuff with your dollars in the future—because your dollars will be worth more tomorrow than they are today—you will want to hoard your money and not spend now. But that’s really bad if 68.9% of your GDP is from people buying stuff. You could then get a massive contraction in GDP.
Now, do I think inflation rates are going to go down? Yeah. And so, here’s the rub. This is where the American public had some real challenges with communications going into the election. Because while prices are still going up, they’re rising at a slower pace than before. You’re telling the American public that inflation’s going down—but wait a minute, my grocery bill is still really high, and it keeps going up. And because prices aren’t going down, they feel they’re being lied to.
This has a lot to do with the fact that math is hard, and half of Americans read at or below the eighth-grade level. And now you need to explain calculus to them for them to understand the difference between prices and inflation?
So are prices going to drop? I don’t think so. We just want the prices to stop going up at a crazy pace. And I think that is going to happen.
Q: Let’s talk a bit about the material handling and supply chain sectors. What’s your outlook for these markets in 2025?
A: I think the outlook for 2025 is pretty good for material handling and supply chain—and for material handling equipment manufacturers. If interest rates go down, that’s going to incentivize people to spend. Plus, it seems very likely that we’ll see corporate tax cuts again. Low sustained corporate tax rates, falling interest rates, record-high equity markets, and record-high home prices—all that stuff’s really good for spending.
I think material handling equipment manufacturers have been burning off a backlog for the last two years, as have almost all manufacturers—something that’s reflected in the ISM [Institute for Supply Management] Manufacturing Index. But now as interest rates go down, I think there’s a chance you’re going to see a pop in new orders. And then with a low tax rate, you’ve got all the incentive in the world to spend, right? All those things are really positive for growth. So I think we probably have a good year ahead of us. I am optimistic about 2025 and also 2026.
Q: Well, that would be welcome. I know that people have held onto their cash and taken a wait-and-see attitude for the last couple of years. So, hopefully, we’re beyond that, and people are ready to spend.
A: Well, that’s right. A lot of businesses respond to these types of incentives, right? This is why the Fed raises interest rates—to cool demand. Demand had been so hot with folks out there spending like crazy. And when demand exceeds supply, prices rise.
Raising interest rates dampens demand, and when you dampen demand, the prices ease off. This is how the Fed manages inflation with interest rates. But now, hopefully, as inflation eases and interest rates fall, you’re going to get more activity on the business investment side. So that’s pretty exciting.
Q: Let’s talk about supply chain investments. Do you see any particular areas where companies will be looking to spend money this year?
A: I think there are a number of different areas. E-commerce is probably going to hit record levels in 2025—and we may even see e-commerce’s share of total retail sales hit an all-time high. During the Covid lockdowns, in the second quarter of 2020, e-commerce’s share of all retail sales spiked to 16.4%. I think that in one of the quarters this year, we may surpass that and hit a new record percentage. That would be good news for material handling and supply chain.
I also see the labor market remaining bifurcated, with very different outlooks for knowledge workers versus laborers. Knowledge workers may still struggle to find jobs, whereas employers looking to fill physically demanding, in-person jobs will struggle to find workers. That includes jobs in warehousing, transportation, wholesale, and manufacturing, which means we’ll also likely see record levels of demand for automated equipment throughout supply chain, material handling, and warehousing. All of those things will probably mean pretty good opportunities for material handling equipment manufacturers in the year ahead.
The one caveat I do want to leave readers with is to be wary of those geopolitical and supply chain risks that extend globally because, in my mind, that’s really the only thing that could spoil what would otherwise be a pretty big party in 2025.
Hyster-Yale Materials Handling today announced its plans to fulfill the domestic manufacturing requirements of the Build America, Buy America (BABA) Act for certain portions of its lineup of forklift trucks and container handling equipment.
That means the Greenville, North Carolina-based company now plans to expand its existing American manufacturing with a targeted set of high-capacity models, including electric options, that align with the needs of infrastructure projects subject to BABA requirements. The company’s plans include determining the optimal production location in the United States, strategically expanding sourcing agreements to meet local material requirements, and further developing electric power options for high-capacity equipment.
As a part of the 2021 Infrastructure Investment and Jobs Act, the BABA Act aims to increase the use of American-made materials in federally funded infrastructure projects across the U.S., Hyster-Yale says. It was enacted as part of a broader effort to boost domestic manufacturing and economic growth, and mandates that federal dollars allocated to infrastructure – such as roads, bridges, ports and public transit systems – must prioritize materials produced in the USA, including critical items like steel, iron and various construction materials.
Hyster-Yale’s footprint in the U.S. is spread across 10 locations, including three manufacturing facilities.
“Our leadership is fully invested in meeting the needs of businesses that require BABA-compliant material handling solutions,” Tony Salgado, Hyster-Yale’s chief operating officer, said in a release. “We are working to partner with our key domestic suppliers, as well as identifying how best to leverage our own American manufacturing footprint to deliver a competitive solution for our customers and stakeholders. But beyond mere compliance, and in line with the many areas of our business where we are evolving to better support our customers, our commitment remains steadfast. We are dedicated to delivering industry-leading standards in design, durability and performance — qualities that have become synonymous with our brands worldwide and that our customers have come to rely on and expect.”
For many small to medium-sized warehouse operations, it can be challenging to find equipment that improves efficiency but doesn’t break the bank or require specialized training. That was the dilemma that faced coffee roaster and distributor Baronet Coffee when it moved its operations to a 50,000-square-foot facility in Windsor, Connecticut. The company, a fourth-generation family-owned and -operated business, has moved several times since its founding in 1930. But this time it ran into a hitch: The large forklifts it was accustomed to using were creating pain points in the new facility.
Specifically, the narrow aisles and high shelving at the new site made it difficult for the company’s forklift trucks to maneuver through the warehouse. Plus, those big, bulky forklifts required operators with specialized training. And while the warehouse has some 35 employees, not all of them had the necessary credentials—which left the operation vulnerable to staffing shortages and bottlenecks.
So Baronet Coffee launched a search for a flexible, low-cost truck that could maneuver in small spaces and would be easy for team members to operate. For help with the selection process, it tapped Big Joe Forklifts, a Downers Grove, Illinois-based company that makes electric lift trucks.
LOW COST, HIGH FLEXIBILITY
The company found what it wanted in Big Joe’s PDSR, an AC walkie reach stacker with power steering that offers a 3,000-pound lift capacity and can reach heights of up to 189 inches. What makes this model ideal for the Baronet Coffee warehouse is the combination of a tight turning radius, low operating cost, and flexibility.
The PDSR uses a pantograph, which is a mechanism that extends the loads being handled beyond the straddle legs to lift or lower products and can be retracted for compact turns. The PDSR also features power steering, side shift, proportional hydraulics, and tilt, which allows operators to reach and side-shift within the narrow racking and in pass-through racking as well.
“Being able to manipulate that pallet, to put it exactly where we need it, has been [a huge plus for the operation],” explained Chase Martin, process engineer at Baronet Coffee, in a video. “The walk-behind truck gives workers the flexibility to go up high or down low or even into the middle of the racking and move product around very easily and safely.”
THE RIGHT FIT
After one day on the job, Baronet Coffee knew the PDSR was the right fit.
“Big Joe’s PDSR really fit the niche really well for us, Martin said in the video. “It’s a unit that isn’t as big as a forklift, and we don’t need people that are certified to drive it. But it does all of the things that we need it to do—getting up high, reaching, tilting side, shifting—to make our day-to-day order picking easier. From an operational standpoint, this is definitely a big success for us.”
Mike Vilarino, business integration manager at Baronet Coffee, agrees, adding that one of the lift truck’s biggest strengths is its ease of use. “People definitely gravitate toward the Big Joe PDSR. It’s very easy to just grab the truck, [go] out on the aisle, pick what you need, and get out of there,” Vilarino said in the video. “The PDSR is a huge value to Baronet due to the fact that the training requirements for operators are minimal—we’re able to get people up to speed very, very fast, and they’re able to perform their job duties in a timely and safe manner.”
Airbus Ventures, the venture capital arm of French aircraft manufacturer Airbus, on Thursday invested $10.5 million in the Singapore startup Eureka Robotics, which delivers robotic software and systems to automate tasks in precision manufacturing and logistics.
Eureka said it would use the “series A” round to accelerate the development and deployment of its main products, Eureka Controller and Eureka 3D Camera, which enable system integrators and manufacturers to deploy High Accuracy-High Agility (HA-HA) applications in factories and warehouses. Common uses include AI-based inspection, precision handling, 3D picking, assembly, and dispensing.
In addition, Eureka said it planned to scale up the company’s operations in the existing markets of Singapore and Japan, with a plan to launch more widely across Japan, as well as to enter the US market, where the company has already acquired initial customers.
“Eureka Robotics was founded in 2018 with the mission of helping factories worldwide automate dull, dirty, and dangerous work, so that human workers can focus on their creative endeavors,” company CEO and Co-founder Pham Quang Cuong said in a release. “We are proud to reach the next stage of our development, with the support of our investors and the cooperation of our esteemed customers and partners.”
Tire manufacturer Michelin has long used predictive maintenance tools to head off equipment failures, but the company recently upped its game by implementing cutting-edge robotics at its factory in Lexington, South Carolina. Managers there are using Boston Dynamics’ autonomous mobile robot (AMR) “Spot” to speed and streamline the inspection and maintenance processes—a move that is boosting productivity at the Lexington facility and for the company at large.
“Getting ahead of equipment failures is important, because it affects our production output,” Ryan Burns, an associate in the facility’s reliability and methods department, said in a case study describing the project. “If we can predict a failure and we can plan and schedule the work to fix the issue before it becomes an unplanned breakdown, then we’re able to increase our output as a company and a tire producer.”
MORE—AND BETTER—INSPECTIONS
Spot is a versatile quadruped AMR that can automate sensing and inspection tasks, and capture data—all while moving freely throughout a facility. The robot is being used around the world for maintenance-related functions, such as detecting mechanical problems and monitoring equipment for energy efficiency. At the Michelin plant, managers began by assigning Spot to inspect machinery in its tire verification (TV) area—taking over tasks previously done by in-house technicians as well as conducting additional inspections. Spot identifies issues and problems, and then conveys that information through its software program, called Orbit, which managers can access via an on-site server. From there, managers can sort through the data to detect anomalies and set alarm thresholds that will trigger a technician’s response.
“From a technician standpoint, Spot going out and doing these routes eliminates a mundane task that the humans were doing,” said Burns. “By Spot finding these anomalies and these issues, it gives the technicians more time to … [decide] how and when they’re going to fix the problem versus going out, identifying [the issue], then trying to plan and schedule everything.”
FEWER BREAKDOWNS, MORE PRODUCTIVITY
The results have been game-changing, according to Burns and his colleague Wayne Pender, the tech methods and reliability manager at the Lexington plant. As of this past fall, Spot was running seven inspection missions in the TV area, scanning about 350 points across 700 assets to detect anomalies ahead of time. The results helped generate 72 work orders in Michelin’s system—allowing the facility to avoid uncontrolled breakdowns and major production losses, according to Pender. On top of that, Spot had generated 66 air-leak work orders, identifying areas where Michelin can reduce energy consumption.
Looking ahead, the plan is to apply Spot’s talents beyond the TV area to the rest of the facility.
“Spot is a member of our maintenance team,” Burns said. “The future is to have more Spots, so that we can improve on our inspections and improve our overall output as a company here at [Lexington].”
Pender agrees: “We see Spot [as] the future. … [But] we probably need a whole dog pound or multiple Spots … to actually do what we need to do [across all of Michelin’s North American facilities].”