How Shippers can Respond to Fast-Changing Trade and Tariff Policy Changes

Nearly half of shippers say tariff and trade policy uncertainty is a pain point today, and a key challenge is how rapidly these changes are happening. 

Read also: Shippers Brace for Disruption, Seek Alternatives Amid Looming East Coast Port Strike

News about tariffs seems to break daily. And with the International Emergency Economic Powers Act (IEEPA) being used to impose tariffs, shippers have to be more prepared for potential future tariffs to take effect a few days after their announced versus months which was previously the common practice. 

With the tariff and trade landscape evolving faster than ever, shippers need to be ready with quick and strategic responses. There’s no playbook for how to do this because every supply chain is different. But there are universal actions that all shippers can take to stay agile amid so much uncertainty. They include:

Creating a formalized approach to preparing for tariffs

A flurry of tariff announcements and significant developments like proposed changes to the de minimis rule have been a lot for shippers to keep up with these last few weeks. Having formal processes in place to guide their response to policy changes can help shippers stay ready for whatever comes next.

Some organizations have set up “war room” teams to monitor tariff-related developments as well as formulate scenarios and execute their strategies. For shippers that don’t have the resources to set up a dedicated team like this, there are still steps they can take to help focus their time and efforts in the right place.

For starters, they can make sure they’re only acting on what is official. News stories may help shippers know what’s to come, but only announcements from sources like the White House and the Federal Register should be dictating how shippers actually respond. Resources are available with a list of these trusted sources. 

Shippers should also identify in advance which policy changes will require them to adjust their supply chain network and which changes they can just wait out. The more they’re aligned internally on the criticality of policy changes, the faster they will move.

Having a solid understanding their import data

Today’s trade and tariff landscape has emphasized the importance of data. Facing both uncertainty and the potential for disruption, shippers need to understand the movement of their products, their total landed costs and where they can be flexible when the situation requires it.

Unfortunately, the data providing these insights isn’t always available. Nearly 40% of shippers say they need more data and insights to find savings on tariffs and duties.

Shippers can access all their import and export data in one place using the Automated Commercial Environment (ACE) portal. Shippers that aren’t using the portal should strongly consider applying for an account with the U.S. Customs and Border Protection (CBP). 

Next, analytics tools can turn this data into useful insights. Tools that were built specifically to analyze import data, for instance, can help shippers identify how new trade measures impact them at the SKU level and understand their customs landed cost. And sourcing analysis tools can help shippers see their import data against broader trade data to identify alternative markets for production and where free trade agreements exist. 

Making data-driven decisions

With a strong grasp of their import data, shippers can start using it to best determine what strategies are right for them. Even the most complex scenarios can be modeled out, incorporating production, transportation and customs costs to give executives detailed strategies to evaluate.

A few strategies in particular that can help shippers address the top priority of controlling costs in the face of higher duties include:

Foreign trade zones (FTZ), which are a good option for shippers importing high-value products that don’t need to ship right away. By using an FTZ, a shipper can defer tariff costs by only paying duties on products when they’re withdrawn from the FTZ or eliminate the cost altogether on goods they plan to re-export.

Entry consolidation programs (ECP) have also emerged as another way to rein in costs – in some cases we’ve saved companies millions of dollars annually. An ECP can reduce a shipper’s overall merchandise processing fee by consolidating multiple ocean or truck-based shipments into one entry.

Additionally, running sourcing exercises can help shippers uncover opportunities to mitigate costs and risks. Shippers should consider a wide range of factors in these exercises, from quality and lead times to trade agreements and ethical sourcing practices. 

Directly paying the CBP can also deliver savings for shippers that are currently going through a customs broker. Shippers doing this will no longer need to pay their broker’s outlay or advance fee, and they can enjoy longer payment terms by using the CBP’s Periodic Monthly Statement.

Navigating tariffs in top gear

Tariff and trade policies may be changing quickly, but shippers can respond to them just as swiftly. With a formalized preparedness plan, a strong grasp of their import data and the ability to make smart decisions using that data, shippers can quickly adapt to policy changes and stay in front of risks to their supply chain.