Genpact: How Suppliers are Stepping Back From Globalisation

While suppliers have been holding their breath in anticipation of tariffs from US President Donald Trump's administration in recent months, one form of transportation may see major growth: railways. 

Increased tariffs in 2025 could bring supply chain and logistics operations back to US shores, benefitting rail companies as more products would need to be moved across the country in their raw form. 

However, Peter Anderson, Global Supply Chain Lead at Genpact, points out that the US currently lacks the rail infrastructure and staff to support this growth and cannot afford a massive one-time investment to enable rapid rail expansion, putting domestic supply chains in a tricky spot. 

Here, Peter discusses how suppliers are looking to step back from globalisation, using AI-powered predictive analytics for risk assessment and moving to supply chain managed services to spend capital internally. 

How do you foresee tariffs affecting the balance between global and domestic supply chains?

The current escalation of tariffs by the US is causing significant disruptions to global supply chains, creating ripple effects across international markets. Manufacturers are scrambling to reroute production while absorbing higher costs for raw materials and components.

These disruptions have led to inventory shortages, extended delivery timelines and increased consumer prices as businesses pass on additional expenses. SMEs are particularly vulnerable, lacking the resources to quickly pivot their sourcing strategies.

If this trend continues, we may see a fundamental restructuring of global trade patterns, with companies prioritising supply chain resilience and agility over pure cost efficiency, potentially reversing decades of globalisation.

How can rail companies prepare for a potential increase in demand without massive investment?

The US rail network faces structural challenges in scaling for increased demand from reshoring and nearshoring activities. Without significant infrastructure investments, companies must focus on optimising existing capacity.

Advanced technologies like predictive analytics and digital twins can help rail companies forecast demand spikes, identify bottlenecks and optimise resource allocation.

Collaboration across industries is also critical. For example, partnerships between rail operators and suppliers can enhance efficiency through shared resources and streamlined operations. While the long-term solution requires investment in rail infrastructure and workforce development, immediate steps like automation and capacity sharing can help bridge the gap.

How are suppliers using AI-powered predictive analytics to assess tariff and transportation challenges?

Today’s technology stack is far more advanced than even five years ago, enabling suppliers to leverage AI for scenario planning, risk assessment and decision-making.

AI-powered predictive analytics provides proactive insights into potential tariff impacts and transportation disruptions. For example, an AI system can analyse historical and real-time data to predict how tariff changes might affect supply chain costs and timelines. It can also suggest actionable strategies, such as alternative sourcing locations or routing options.

These tools enable a connected supply chain ecosystem that seamlessly integrates planning, sourcing, manufacturing, delivery and aftersales, giving companies a competitive edge in managing global challenges.

Why are suppliers increasingly moving to supply chain managed services?

The growing complexity of global supply chains, coupled with ongoing trade uncertainties, has driven many suppliers to adopt managed services. These partnerships provide immediate access to advanced technologies, global infrastructure and expertise without requiring significant upfront investment.

Managed services also offer enhanced visibility and forecasting capabilities. This is particularly important in 2025 and beyond, as responsive, predictive and adaptive supply chains become essential. Suppliers leveraging managed services can better navigate tariff changes, optimise operations and stay competitive in an unpredictable global environment.

How might reshoring affect US logistics in the long term?

Reshoring is accelerating as companies aim to strengthen domestic supply chains and reduce reliance on global networks. However, the US faces significant hurdles in logistics infrastructure and workforce readiness.

For instance, while rail could play a critical role in managing increased demand, the network lacks the capacity to handle a surge in industrial activity. Building this infrastructure will require substantial investment and the associated costs may lead to higher prices for consumers.

In the near term, companies must focus on collaboration across supply chains to mitigate costs and inefficiencies. Viewing the supply chain as a network—or a “network of networks”—can help reduce friction and foster a smoother transition to a more localised supply chain ecosystem.

Suppliers that embrace these collaborative approaches and invest in advanced technologies will be better positioned to navigate the long-term impacts of reshoring.

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