There are more factors impacting the supply chain than ever before - tariff volatility, technology transformation, and talent gaps are just a few. Controlling expenses and cash flow wherever possible is imperative. What’s affecting logistics operations and how can equipment leasing can provide a modicum of control in an otherwise uncertain period?
What’s new in warehousing
Automation in warehousing has been on the rise for years. What’s new are the types of equipment and the application of artificial intelligence (AI) to expand their usefulness.
Robotic picking systems, autonomous mobile robots (AMRs), and automated guided vehicles (AGVs) are familiar forms of equipment in modern logistics facilities. AI is being used to predict changes in demand, allowing warehouse operators to scale their use of equipment to meet expected needs. AI is also being used to predict when equipment maintenance will be required rather than waiting for a system to fail.
Wearable technology, such as smart glasses and wrist- or finger-mounted scanners, are improving efficiency and ergonomics. Wearable virtual mentors driven by AI can train staff better and more quickly than traditional methods. And wearable technology can be scaled up and down to match demand in an operation.
Tariffs and logistics
Since January 2025, there have been multiple changes to tariffs. As a result, retail and manufacturing companies and the logistics facilities that support them have been hit with rising expenses and uncertainty about the costs of doing business. Companies are shifting sourcing strategies, renegotiating supplier agreements, and moving production closer to the United States to reduce tariff exposure and logistics risk.
Industry leaders say changing tariffs continue to increase shipping and procurement costs while complicating supplier relationships. These are not temporary fixes, but broader changes reshaping supply chains and production strategies.
Interest rate uncertainty
The cost of borrowing remains an important factor when evaluating equipment upgrades and technology investments in warehouse operations. Interest rates and broader economic conditions continue to shift based on inflation trends, labor market activity, and overall economic performance, making it important for operators to regularly assess financing conditions and capital needs.
With continued uncertainty around the direction of the economy and interest rates, many warehouse operators are taking a more measured approach to equipment acquisition, carefully weighing financing options and timing before making major investments.
Gaining control through leasing
One way logistics facility operators can regain control in these challenging times is through equipment leasing. Flexible leasing options can help companies preserve cash flow, spread out equipment costs, and invest in new facilities, technology, or fleet upgrades without large upfront capital outlays.
Equipment leases can be structured like ordinary rental agreements (operational leases) or as finance leases. Operational leases are appropriate for equipment that will only be used for a short time. Finance leases are more suitable for equipment that will be in service for several years. Operational leases offer maximum flexibility, while finance leases offer certain tax advantages such as 100% bonus depreciation. Facilities can test equipment to explore a new revenue line or operations method without a long-term commitment.
They can also make it easier for companies to respond quickly to changing market conditions. As warehouse automation, AI-driven systems, robotics, and fleet technologies continue to evolve, leasing allows operators to upgrade equipment more frequently without being locked into aging technology or long depreciation cycles. In uncertain markets, that flexibility can be just as valuable as the equipment itself.
Keeping up with the current
With so many powerful forces at work in the economy, it can be easy to get swept away. Equipment leasing makes it possible to gain control over capital and create predictable cash flow, giving logistics and supply chain operations a powerful tool for staying in control in otherwise treacherous waters.
Todd Mauer is the Senior Vice President, Middle Markets for Summit Funding Group, a direct lender providing equipment finance and lease solutions for all asset types in the middle market and investment grade credit spaces. Project sizes range from $250k to $50mm fulfilling a North American footprint in the energy, construction, utility, industrial, manufacturing, marine and transportation markets.
