Looking ahead, 2017 could be a pivotal year for logistics. Demand patterns are shifting, technological advances are altering industry economics, and new competitors are challenging old business models. This year could bring significant moves that reshape individual sectors and even the industry as a whole. Major business combinations, large-scale shifts in distribution flows, deep capacity cuts, massive infrastructure investments—anything is possible.

As company leaders weigh options in a fast-changing business environment, they also face increasing political risk. Rising protectionist sentiment around the world threatens to constrict global trade flows, the lifeblood of logistics. Trump won the US presidency with a mixed message of tax relief, regulatory reform, and trade restrictions. His agenda could cut both ways for logistics, and it’s still not clear which Trump proposals will become law.

Beyond 2017, logistics is moving toward a fully digital, connected, and flexible supply chain optimized for e-commerce and last-mile, last-minute delivery. The next-generation supply chain will enhance fulfillment capabilities and drive efficiencies through technologies ranging from big data and predictive analytics to artificial intelligence and robotics. Inevitably, winners and losers will emerge as companies that make the right technology investments and strategic choices outperform others. The industry must also reckon with the social cost of rapid technological evolution as automation tempers employment growth or eliminates hundreds of thousands of traditional jobs in warehouses, trucking, and other sectors.

We foresee four potential scenarios for logistics in coming years. We call the first plain sailing, as regulatory constraints recede, global trade flourishes, and technology improves efficiency. Under a choppy waters scenario, new policies favoring US manufacturing force shippers and logistics companies to adapt, spurring faster adoption of technologies. A stemming the tide scenario brings tighter regulations that increase operating expenses and accelerate investment in cost-saving technologies. The worst case puts logistics in the doldrums as regulatory costs rise and tough economic conditions deter technology investments.

Although some scenarios may seem more likely than others, successful companies will prepare to thrive under all four.