From its ports to warehouses and the trucks and trains connecting them, Southern California’s logistics industry is a daily beehive of activity. And like a beehive, what affects one part can affect the whole.
In the near term, “people aren’t going to change their supply chains in a day,” said Lisa Anderson, a logistics industry consultant based in Claremont. “So product will still come in and it’ll still flow into Southern California.”
Longer term, “companies are going to start, and they’ve already started, reshoring some production,” Anderson said.
“So what does that mean for logistics? If it’s coming from Latin America, it can still come through the ports. Those products will still go through the Inland Empire and out to the rest of the country. So that’ll still take place. If it’s produced domestically, obviously it’s not going to come in through the ports.”
Overall, warehousing will “go down over time slightly. But I do think it can remain relatively robust,” Anderson said. “If it goes down with China over time, some of it is offset by Latin America, some of it is offset by products coming into California from other places.”
That said, California will have to be competitive, Anderson said.
“If you have domestic production and you’re going to move products into Southern California because you want to supply customers here, you do have a choice,” she said. “Because you could move the warehouse on the other side of the border, like Nevada or Arizona, let’s say, and then bring it in to supply California.”
“Because the warehouse space already exists (here), we’re well set up. But what we have to do is make sure that we remain competitive and we don’t go crazy with our cost structure as compared to our neighbors or we could push them away.”
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How will Trump’s tariffs affect the Inland Empire logistics industry?
Duties on foreign goods could disrupt supply chain and jobs relying on it
From its ports to warehouses and the trucks and trains connecting them, Southern California’s logistics industry is a daily beehive of activity.
And like a beehive, what affects one part can affect the whole.
That’s why the Inland logistics sector is bracing for potential shockwaves from the Trump administration’s tariffs on China and other foreign trade partners.
If those tariffs remain or change on the whims of an unpredictable White House, there likely will be consequences — severe or not — for jobs, income and tax revenue hinging on a Southern California supply chain that employs tens of thousands in Riverside and San Bernardino counties.
At the 2025 Southern California E-Commerce and Logistics Summit conference in Pomona on Thursday, April 17, Thomas Jelenić, vice president of the Pacific Merchant Shipping Association, said: “When you compare China to the next largest trading partner, which I believe is Vietnam, China is five times the volume.”
He added: “Those tariffs are going to affect everything from furniture to car parts. Everything you buy is going to either suddenly not be available or the price is going to go up. And so the ripple effects that are going to happen in this economy, starting with the loss of jobs, are going to be enormous.”
It’s “premature to offer a full assessment” of how the tariffs will affect Inland logistics, economists Manfred Keil and Robert Kleinhenz wrote in a Southern California News Group commentary published online Wednesday, April 16.
“A full-scale trade war would wreak havoc on the industry, with adverse ripple effects through the area’s economy,” they wrote.
However, “if the new tariff regime settles at an average tariff rate of 10%, the adverse effects will be more muted, meaning some job losses and other adjustments in the Logistics sector, but large-scale job losses would be unlikely, as would a broader regional downturn.”
On April 2, President Donald Trump, who vowed to impose tariffs — “the most beautiful word,” he said — on the campaign trail, unveiled a series of tariffs on countries around the globe. The goal, the White House said, was to revive manufacturing in the U.S. and force countries to the bargaining table to rework unfair trade deals.
A week later, with the stock market in freefall, the president announced a 90-day pause on the tariffs with the exception of 125% tariffs on China and a 10% baseline tariff on other nations.
On Wednesday, Gov. Gavin Newsom, citing potentially catastrophic effects from the tariffs on California’s economy, announced his state would sue the Trump administration on the grounds the president lacks the legal authority to impose the tariffs.
An hour’s drive or so from the Long Beach and Los Angeles ports, the Inland Empire’s nexus of freeways and rail lanes, flat, vacant land ideal for warehouses and a blue-collar workforce in need of jobs made it ground zero for a logistics boom that skyrocketed with demand for e-commerce during the COVID-19 pandemic.
It’s hard to imagine that sector vanishing, and that’s likely not going to happen with the tariffs, according to a Southern California economist and an industry expert.
“More likely than not, people are just going to just suck it up and pay the tariff because … it’s not feasible to get stuff into the country or stop making stuff in the country that much quicker,” said Christopher Thornberg, economist and founding partner of the Los Angeles-based Beacon Economics.
The logistics industry “has already slowed down quite a bit anyway,” Thornberg said. “The result of that is that logistics jobs have more or less been flat.”
“Right now, we still don’t know what’s going to happen. Even if (Trump) puts tariffs on, we’re still going to have to bring stuff through the ports and through the Inland Empire. So it’s a problem, but it’s not an end-is-nigh problem. It’s more like piling on to a market that’s already oversupplied.”
In the near term, “people aren’t going to change their supply chains in a day,” said Lisa Anderson, a logistics industry consultant based in Claremont. “So product will still come in and it’ll still flow into Southern California.”
Longer term, “companies are going to start, and they’ve already started, reshoring some production,” Anderson said.
“So what does that mean for logistics? If it’s coming from Latin America, it can still come through the ports. Those products will still go through the Inland Empire and out to the rest of the country. So that’ll still take place. If it’s produced domestically, obviously it’s not going to come in through the ports.”
Overall, warehousing will “go down over time slightly. But I do think it can remain relatively robust,” Anderson said. “If it goes down with China over time, some of it is offset by Latin America, some of it is offset by products coming into California from other places.”
That said, California will have to be competitive, Anderson said.
“If you have domestic production and you’re going to move products into Southern California because you want to supply customers here, you do have a choice,” she said. “Because you could move the warehouse on the other side of the border, like Nevada or Arizona, let’s say, and then bring it in to supply California.”
“Because the warehouse space already exists (here), we’re well set up. But what we have to do is make sure that we remain competitive and we don’t go crazy with our cost structure as compared to our neighbors or we could push them away.”
What helps the Inland logistics sector, Anderson and Thornberg said, is that it serves a massive customer base in Southern California that needs consumer goods.
“A lot of what the Inland Empire does is not just bring stuff in from other countries,” Thornberg said, adding the region “(gets) stuff delivered to a population base of 20 million people here in Southern California.”
The bigger problem, Thornberg said, is that the U.S. economy “overall is out of whack. At some point in time, these unsustainable trends have to go back to something sustainable, and that could be a painful process.”
“That was in the cards before Trump took over,” he added. “And the biggest issue with Trump … It’s not that he’s rocking the boat, but the boat he’s rocking is really unstable. So the issue may be that he sets off the chain reaction of events (with tariffs) that leads us to finally confronting these issues.”
Originally published in the Daily Bulletin, April 20, 2025
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