New Articles

From Exports to Delivery: Simplifying PPE Shipping

PPE

From Exports to Delivery: Simplifying PPE Shipping

From small businesses to large corporations, many are navigating the complex world of importing personal protective equipment (PPE) for employees, family members, and customers as businesses reopen across the globe.

Whether you have navigated these waters before or are new to importing PPE, COVID-19 has changed the game. In response to the changing environment, our team of experts at C.H. Robinson put together information on four key subjects that will help your PPE supply chain run smoother during a time when simplicity is what you need most.

Exporting PPE from China

Over the past several months, China has been the main source for PPE. So, it’s important you’re up to date on the latest regulations to avoid your freight being held up.

China has recently implemented three key policies that relate to PPE exporting.

-Policy 5 requires all medical supplies to meet quality standards of the importing countries, this policy also separated out the process for medical-grade and non-medical-use devices.

-Policy 53 increases CIQ inspection on all PPE products, labels, packaging, and documentation.

-Policy 12 created a white and blacklist of manufacturers and suppliers.

While China’s new policies offer tighter control on PPE being exported, they also have created a dedicated HS-code for PPE products to simplify export declarations.

For a closer look at how China’s regulations impact PPE shipping, check out our recent PPE exporting video featuring our director of product development, Vincent Wong.

U.S. and Canada customs best practices

The next key subject to address is importing PPE into the United States and/or Canada. It’s important you understand various government agency requirements and determine which ones apply depending on whether the PPE is for general or medical use. From there, other factors like labeling, packaging, and marketing of the product can influence these regulations as well.

Importing PPE into the United States

Depending on the PPE commodity you are importing, there can be multiple U.S. Customs and Border Protection (CBP) and U.S. Food and Drug Administration (FDA) requirements to navigate. And due to the nature of the shipping industry, these regulations can change quickly—especially for medical grade equipment.

Importing PPE into Canada

While importing into Canada has some similarities—like changing regulations—there are some clear differences to be aware of as well. It’s important to note that while intended use, labeling, packaging, and advertising can be used to determine medical vs. general use in Canada, this is ultimately determined by the Canadian inspectors.

Whether you are importing PPE into the U.S. or Canada, make certain to watch our video on customs best practices with Ben Bidwell, director of North America customs and compliance, in order to better understand requirements, expectations and regulations for PPE.

Metered freight solutions

In this environment, we’re seeing companies turn to air freight to move their personal protective equipment quickly. However, when the demand for passenger travel plummeted in the wake of the COVID-19 pandemic, a dramatic reduction in cargo capacity followed. As you might imagine, this has drastically changed normal market conditions for air shipping.

While delivering all your PPE as fast as possible via air might seem like your only option, solutions like freight metering, which utilizes both air and ocean, can also meet your needs while providing cost-savings.

Ask yourself:

-How much of our PPE do we really need to fly?

-How much of that is safety stock?

-What’s the end user consumption rate?

-What’s the output rate at the factory?

Answers to these questions and cross-functional conversations that include purchasers, factory contacts, logistics providers, and end users can reveal that only a portion of your purchase order (PO) should fly and a balance of it should ship as ocean freight.

The key to metering your freight is to choose air freight for just enough of your order to match your end-users’ consumption rate. As ocean freight catches up, it can significantly reduce your freight spend.

Looking for more benefits of a metered air and ocean shipping solution for critical PPE orders? Watch our metered freight solutions video, featuring Bogen Chi, director of air freight.

FCL and LCL expedited ocean shipping

Lastly, we understand your need to continue moving your PPE cargo as quickly and cost-effectively as possible. Utilizing expedited less than container load (LCL) or full container load (FCL) shipping could be the differentiator you need. In fact, depending on your PPE’s delivery city, C.H. Robinson’s expedited LCL services can cut traditional LCL transit time by 4 to 14 days and keep your costs nearly 80% lower than air freight services.

Watch our expedited ocean shipping video with Ali Ashraf and Greg Scott to explore if this smart transportation solution is right for your supply chain.

In conclusion

Personal protective equipment has become an extremely important and in-demand commodity as we face COVID-19. So, whether you’re looking to import PPE for the first time or as part of your normal procurement process, C.H. Robinson’s experts can help you build a more resilient supply chain when shipping PPE around the globe. As the market continues to change, our global suite of service offerings and market expertise remains available to help your PPE supply chain. We’re here to help today so you can have a better PPE process tomorrow.

disruption

Navigating Through the Disruption – An Oceania Perspective

Logistics has always been the backbone that silently keeps the world moving but, in this time of uncertainty, its importance has been magnified. COVID-19 has caused disruption globally to all business, in one way or another, and navigating this unprecedented time has highlighted many challenges.

With the evolving landscape, forward planning has become essential to ensure business continuity plans are effective. The need for a recommencement plan for businesses who have temporarily closed and a diversified supply chain for those who operate as essential services is paramount to ensuring business survival for now and success in the future.

What we learned from New Zealand’s Lockdown

The level-4 lockdown of New Zealand has shed some light on the potential challenges that may arise should Australia follow suit.

The Port of Tauranga has announced it is prioritizing the unpacking of essential goods so that the cargo can be handled and transported first. Container loads are able to be delivered to customer’s sites, if the site is accepting deliveries, however, they cannot be unpacked until the level-4 lockdown period has finished. By doing this, the Port and Government are ensuring the movement of essential goods remains efficient and that essential services can continue operations as usual.

Where a customer site is closed, we see the Port of Wellington waive storage fees for shipments that cannot be transported out of the Port.

We are working with our clients to identify if their goods would be considered essential in the event of a complete lockdown. We’d advise that all companies start considering what sort of goods they have incoming and work with their strategic partner to qualify if their goods would be restricted to such delays if a lockdown were in place in Australia.

Be realistic and confirm whether your goods are considered an essential service and put suitable business measures in place.

If you find that your business cannot be considered essential or it is not viable for you to remain open, you’ll need to prepare to get back to production quickly once the lockdown is lifted. We recommend that non-essential businesses put a plan in place for the commencement of reopening. It is important to consider whether the recommencement of operations would be staggered, what goods or orders are required to meet the operation recommencement timeline, and are these urgent.

Diversify your Supply Chain

Sometimes the best solution for a business’s supply chain issue is to consider diversifying your shipment options.

For example, it may be beneficial to combine different transport types by flying goods to Singapore before shipping them to Australia rather than just shipping from their location of origin. Combining the two transport types is a faster and cheaper option than purely using air freight in a volatile market.

Businesses may consider using Less than Container Loads (LCL) if they require certain goods for essential service production because it is more cost-effective than their standard full product shipment in a Full Container Load (FCL).

An alternative to air freight, road, and rail in Australia is the Domestic Coastal Shipping Service. After ships have unloaded goods in Eastern Australia, on their return journey to their location of origin, they are able to pick up and deliver domestic goods as they travel West along the coast. We have seen more than a 20% increase for the quarter year-on-year due to the additional pressure on the Australian road and rail market. Rail is at capacity with customers experiencing damage to goods, severe space, and equipment issues as a result whilst the state border closures are posing potential delays for trucking. Many major clients, especially in the food and beverage sector, are switching large volumes to our coastal service as a solution to ensure continuity of business supply.

This domestic shipping service provides a saving of up to 60% over rail and road services. Businesses would need to take into consideration the increased travel time required over other domestic modes of transport and plan this into their supply chain model.

When new challenges arise, it is best for businesses to discuss their options with their strategic partner, who will help navigate this uncertain time.

As businesses struggle to meet the demands of this new normal, C.H. Robinson’s trusted advisors around the globe are continually looking for the best solutions to keep your supply chain moving.

supply chain

Three Supply Chain Lessons for Businesses Coping with COVID-19

As governments and healthcare agencies around the world work to stop the spread of the coronavirus, importers and exporters across 164 countries are struggling to manage the pandemic’s growing impact on their supply chains.

Despite past lessons from 2003’s SARS outbreak and 2011’s Fukushima tsunami about the hidden weaknesses in their supply chains, companies are challenged to manage logistics concerns stemming from sourcing strategies and risk management.

Developing a methodical supply chain response to the coronavirus pandemic will prove challenging, given the scale and rate of the pandemic’s spread. That said, supply chain leaders must mitigate such disruption and plan for future incidents, or risk falling behind.

Here are three lessons that the logistics industry can take away from the ongoing pandemic:

Lesson one: Evaluate your supply chain design

Current supply chain designs have predominantly followed a one-size-fits-all philosophy, on the assumption that raw materials are readily available for sourcing and production globally. While this has enabled a lower ‘cost-to-serve’ model, recent trade tensions and now the coronavirus pandemic have thrown a curveball for the global logistics environment.

Organizations should aim to optimize production and distribution capacity of their supply chain with dynamic, rather than static, operational capabilities. For example, a technology company can consider diversifying production facilities with local sources of supply in each of its major markets, rather than relying on a single source. In some companies, supply chain managers recognise the risks of single sourcing, but do so to keep costs low. These decisions trickle down the supply chain, affecting customers who do not directly source materials from impacted countries but whose suppliers do.

To prevent such future situations, companies should research suppliers in different geographical locations in anticipation of rerouting shipments from affected countries or consider having a secondary source outside the primary region to mitigate the impact. This can help further diversify the value chain.

Lesson two: Apply risk management principles in advance

While many global firms recognize the value of a risk management plan, it is often placed at the bottom of the priority scale in the absence of a crisis situation. According to a paper published by the Global Supply Chain Institute at the University of Tennessee, only 25% of a typical company’s end-to-end supply chain is being assessed in any way for risk.

Supply chains inevitably have multiple dependencies, but firms can proactively manage possible vulnerabilities at every stage through their risk management plans.

For example, having an accurate assessment of inventory is a given, but it is also critical to understand how restrictions on imports from China and affected countries will impact current inventory and regular shipping cadence. Interruption risk management strategies, including mapping and monitoring suppliers, should be applied when developing an informed inventory plan. Companies must also look ahead to forecast if the demand for goods may change in upcoming weeks – bearing in mind decreases in air capacity due to cancelled passenger flights and higher logistics demand due to current backlogs.

Lesson three: People first strategy

Above all, remember that people are the most affected throughout this pandemic. The health and safety of employees and customers must be prioritised amidst this evolving situation. Wherever possible, activate contingencies for remote-working arrangements, and implement a clear communications plan within the organisation. Doing so will go a long way in keeping employees informed while ensuring business operations are minimally disrupted.  For example, companies can develop an online information hub to address frequently-asked-questions and outline company policies that map out staffing plans.

Involve your suppliers within these plans as well – align on operational readiness including appropriate staffing numbers and facility planning for surges in volume.

Maintaining flexibility in customer support and services to customers in these difficult times is key – and how effectively a company responds to these issues will mean they remember you when things take an uphill turn again.

Plan ahead to navigate disruption

While global events such as the coronavirus pandemic are impossible to predict, it is possible to cushion their impacts by increasing supply chain preparedness. Companies must keep their contingencies in place before a crisis occurs. And when these crises do occur – these businesses will rise again.

business

Keeping Your Business on Track During the Coronavirus Outbreak

The coronavirus outbreak, which is severely affecting business operations around the globe, was recently declared a global pandemic by the World Health Organization. C.H. Robinson continues to monitor the situation in the U.S. and globally, staying close to our contract carriers and discussing continuity plans in the event shipping trajectories need to be adjusted due to disruptions or closures at any ports. Although this is not the first or the last event to disrupt global supply chains, unpredictable logistics require a proactive approach for importers and exporters to keep business running as usual.

The latest in air and ocean travel

As factories and production in China return to full efficiency, the whiplash in other areas is starting to take place, particularly in consuming nations such as the U.S. and Europe. We continue to see elevated cases in developed nations that have a heavy reliance on manufacturing outside of the U.S., specifically China. Given this continued volatility, global importers are eager to restock their inventory. As a result, available capacity on the Trans-Pacific will continue to be volatile due to the removed capacity in the market.  The empty container supply has also dwindled in regions where China trade has been a catalyst, primarily North America and Europe, this can have a ripple effect if these empty containers do not get repositioned back to China to support the increase demand that is anticipated at the tail end of March into April.

Similar to China, airlines have canceled majority of passenger flights in and out of Europe and South Korea due to safety concerns and lack of travel demand. Cargo space may be constricted as certain limitations are imposed on passenger travel resulting from adjusted flight schedules and capacity. Although passenger planes have been used to transport cargo more frequently in recent years, available capacity is not heavily impacted by the cancellations due to air charter operators and blank sailings diminishing from ocean carriers. However, contract rates and transit times may need to be adjusted as the airfreight market remains fluid.

As we continue to closely monitor the situation, below are important considerations that will help keep your supply chain moving and better navigate any shipping challenges associated with the latest travel restrictions and schedule shifts.

Assessment of inventory levels

Having an accurate assessment of your inventory is expected, but it’s important to understand how limitations on imports, not only from China but around the globe, will impact your current inventory and regular shipping cadence. If you haven’t already, start discussions with your freight forward around production planning and forecasting. It’s important to look ahead to determine your transportation needs as demand is expected to surpass available capacity in the coming weeks.

Planning ahead in production

There are numerous variables to consider when planning for production. Working through these with a supply chain expert will help you be prepared and proactive as the uncertainty around the virus continues.

-What will production look like and has there been any discussion with the vendors and factories?

-How are existing inventories compared to sales projections?

-What plans are in place in case there continues to be a shortage of workers in China or the demands are not being met within a specific window of time?

-Has there been a discussion about how the backlog will be addressed?

-Where are your warehouse locations in proximity to delivery locations? Ensure you have business continuity plans in place, so deliveries are not impacted.

-Do you have enough air capacity to address decreased passenger flights?

-Is an expedited ocean or sea-air being looked at as an alternate option?

Backup sourcing options

The current backlog in China is a prime example of the importance of a diversified supply chain – including modes of transportation, carriers and sourcing locations. When there is any kind of delayed start to production, keeping up with the workload poses a challenge, and backup sources may need to be considered. Additional sourcing options are not always easy to find and keeping up with the sheer demand and quality controls can be a challenge. Connecting with a global supply chain expert to vet reliable options is important to help ensure success.

While we may not know how long this global pandemic will last, C.H. Robinson’s global network of experts are dedicated to helping you get your shipments where they need to be. We continue to closely monitor the situation and provide updates through our client advisories as needed. We encourage you to reach out to your account manager or connect with an expert for additional questions.

________________________________________________________________

Sri Laxmana is the Vice President of Global Ocean Product at C.H. Robinson

C.H. Robinson

C.H. Robinson Names Thomas Schoett Vice President of Latin America

C.H. Robinson, one of the world’s largest logistics platforms, is proud to announce Thomas Schoett as vice president, Latin America (LATAM), Global Forwarding. He will report to Mike Short, president of Global Forwarding at C.H. Robinson.

Thomas joined C.H. Robinson in May 2017 as the regional director of South America. In his time with the company, he has improved global alignment and increased our presence on regional trade lanes that are important to our customer base. His efforts continue to add to our global suite of services and the ability for customers to work with one provider for all their logistics and technology needs.

“Thomas brings a deep knowledge of the region, logistics expertise and leadership skills to this role,” Short said. “He will focus on creating synergy within the region and further develop global trade lanes to and from LATAM.”

Latin America is an important part of the company’s Global Forwarding growth strategy, and focused strategic alignment and strong partnerships are critical for continued success.

“I am delighted to be leading the LATAM team,” Schoett said. “Through our network of experts in LATAM and around the globe, we continue to act as an extension of our customer’s teams and drive personalized solutions according to their needs in the region. Additionally, our technology built by and for supply chain experts offers market-leading solutions and real-time visibility to drive better outcomes for our customers’ supply chains.”

vendor

Reduce Risk in Your Global Shipping Strategy With Vendor Management

Trying to coordinate deliveries to make sure they arrive on time can be a stressful job in today’s volatile shipping landscape.

You need to contend with unexpected shipping cancelations by carriers that are trying to stay profitable. Unpredictable rates caused by too many or too few vessels available at any given time adds to the uncertainty. And if you don’t have complete visibility across your global supply chain, your job is only harder.

Many shippers have found peace of mind by using a global vendor-management program, which combines PO management, global visibility, and shipping consolidation. The program can help you make sure freight arrives on time. And it can help you bring greater savings, consistency, and security to your shipping strategy.

How the Program Works

With a vendor-management program, a logistics provider helps manage both your POs and your global flow of cargo, while serving as a single point of contact between you and carriers.

As POs come in, the provider can calculate when cargo will be picked up and continue to verify that timing as delivery dates near. The provider can also use consolidated shipping to combine your partial shipments with others to create full shipments. This can help you get shipments to their destinations on time, and do so cheaply and efficiently.

With a vendor-management program, you no longer need to arrange multiple order pickups or worry about orders not being ready for pickup.

Instead, you can use the provider’s transportation management system to monitor your current order and shipment statuses in real-time, and see exceptions down to the item level. And if you encounter increased demand or last-minute supply chain outages, you can use the system to reroute freight.

3 Key Benefits to Your Business

A vendor-management program offers you more than the comfort of knowing that your shipments are in good hands. It can also improve your global shipping strategy to help you realize some key benefits.

Lower Costs: There are clear cost benefits of using consolidated shipping. You only pay for the volume of a container that you use rather than paying for a full container that you may not fill. Combining multiple shipments into one can also reduce your customs entries and terminal charges, deliveries, and handling fees.

And the savings only start there. Because you can reduce your supply chain spend even more when you combine a vendor-management program with a provider’s transportation, logistics, warehousing or customs services.

Better Consistency: Global supply chains have more opportunities for service failures. A single point of contact can give you answers and offer alternatives before service failures happen. Customs entries can also be processed more consistently. And fixed weekly schedules that have known transit expectations can make it easier to track your orders.

Greater Security: Less-than-truckload and less-than-container-load freight faces the risk of theft and needs to be secured.

With a vendor-management program, a provider can accept your containers for unloading, consolidation, and reloading. And they can pick up containers at ports and bring them to their facilities for faster, more secure customs clearance. Providers can also run CCTV and seal containers to reduce theft risks.

Choosing a Provider

Make sure the logistics provider you work with can not only understand your unique needs but also turn them into solutions.

For example, shippers have different levels of risk exposure. Limitations of liability, terms, and conditions, and cargo insurance options vary by mode of transport, service type and country.A logistics provider can help you uncover potential liabilities in your supply chain and prepare to manage costs associated with cargo damage or loss. This is why it’s important that you use a provider that has in-house risk-management professionals.

The right provider can also help you manage your regulatory challenges and combine vendor management with your other logistics needs for greater efficiency. Additionally, with businesses, suppliers, and the solutions provider integrated onto the same technology platform, you can gain clear visibility to overall inventory, maintain lower transportation costs, and help ensure on-time deliveries.

Countries require compliance with their own specific set of customs rules, governmental regulations, VAT, duty rate calculations and payment schemes. Even small errors like misspelling on a declaration can lead to fines, penalties or even cargo seizures. For this reason, it’s critical that the logistics provider you choose has regulatory experience in the markets where you do business.

Tailored to Your Needs

Vendor-management programs can be structured in different ways based on what you want to achieve. You could customize it to deliver freight from multiple global suppliers to multiple customers. You could also source all freight for a single company. Or you could use a highly efficient merge-in-transit approach to ship products directly from vendors to customers.

Whatever approach you choose, the end result is the same: Efficient and cost-effective control of your global freight so it arrives on time, wherever you do business.

south american

Embracing the South American Ecommerce Marketplace

Ecommerce is on the rise in South America. Double-digit growth is expected for 2019 with sales of $71.34 billion (USD), tying it with the Middle East and Africa as the world’s second-fastest-growing retail ecommerce market. 

That’s great news for shippers looking to expand their online retail presence in South America.

A diamond in the rough

Online retailers in South America have been struggling for years to overcome several obstacles to success, including extensive customs delays, poor transportation infrastructure, and the lack of end-to-end supply chain visibility. Progress has been made on all three of these “challenges,” but more work is necessary to ensure the region’s continued double-digit growth. 

Within each challenge lies opportunity

While these obstacles may keep a few shippers from expanding into South America, others are viewing the area as a “diamond in the rough” and working diligently to reap the rewards of this truly untapped region. 

Having the right information is the first step to wading through the muck and mire of this complicated ecommerce marketplace:

South America customs vary by country

Red tape and bureaucracy pose the biggest obstacles for importing products into South American countries. In addition to customs taxes, tariffs, and fees, it can take 30+ days for some goods to be cleared through customs, especially in Brazil and Argentina. As a result, inventory builds up, costs rise, and customers wait longer for their products to arrive. In comparison, however, Chilean customs are very similar to the U.S. and allow products to flow through relatively quickly.

As you can tell, customs procedures can differ significantly, making it difficult for shippers to ensure compliance with each region’s unique customs. For a more seamless process, it’s essential shippers work with a customs broker or third party logistics provider (3PL) with local offices in the area. They’ll know the customs standards and understand the paperwork necessary to ensure products are approved for import.

Free trade agreements 

The United States-Chile trade agreement allows all U.S. exports of consumer and industrial products to enter Chile duty free. While still in the works, the United States-Brazil free trade agreement can help facilitate trade and boost investment between the two countries, especially in infrastructure. The United States-Colombia Trade Promotion Agreement eliminates tariffs on 80% of U.S. consumer and industrial imports into Colombia. 

South America infrastructure at port and inland

South America is hobbled by its inadequate infrastructure, and it’s probably not going to change anytime soon. Roads remain the primary means of transportation, but 60% are unpaved, hampering the speed of delivery by truck to inland locations. Improvements are slowly occurring, thanks to increased government funding (but corruption hampers many efforts). It’s worth mentioning that China, the largest trading partner of Brazil, Chile, and Peru, invests heavily in the region, providing more than $140 billion (USD) in loans for infrastructure improvements in the past decade, according to The Business Year.  

While surface transportation remains stagnant, ocean freight shows promise. According to icontainers.com, routes going to and from South America represent 15% of the total number of trade services.

The largest container port in South America is in the city of Santos in Brazil’s Sao Paulo state. Its location provides easy access to the hinterlands via the Serra do Mar mountain range. More than 40% of Brazil’s containers are handled by the Port of Santos as well as nearly 33% of its trade, and 60 % of Brazil’s GDP, according to JOC.com

In 2018, Brazil’s busiest container cargo port handled 4.3 million TEUs, compared with 3.85 million TEUs in 2017. 

For Argentina, Zarate serves as the critical port for roll-on/roll-off (ro-ro) and breakbulk cargo, while Buenos Aires and Rosario serve as the top container ports. Only two countries in South America are landlocked, Paraguay and Bolivia. 

Shippers and ocean carriers using the Port of Santos have been complaining about congestion and labor disputes at the port, and about politicization and time-consuming bureaucracy. That’s why it’s essential that shippers must have the latest information on traffic through these South American ports. Global freight forwarding companies in the area will have the newest information available to help you choose the right port of entry for your freight.

End-to-end supply chain visibility

Most online retailers and carriers understand that the sale is not complete until the product is delivered to the consumer. If merchandise is damaged during transport or arrives much later than promised, it reflects poorly on both parties and undermines consumer trust in ecommerce purchases. 

Lack of adequate infrastructure has forced many online retailers to put logistics on the back burner, focusing on the user experience through purchase. That’s why many products take weeks to arrive at the customer’s door, setting a bad precedent that must change. 

The South America trucking industry is highly fragmented, with providers ranging from owner-operators (about one-third of the industry) to sizable fleet operators and experienced freight forwarders who may not own any trucks at all, according to Tire Business newspaper. 

Final mile, LTL services paramount in South America

Once your product reaches port in South America and makes it through customs, how it gets delivered to the customer’s door can add extensive costs to your supply chain. Less than truckload (LTL) and final mile services are paramount to successfully operating in the region. Especially those carriers that can provide GPS freight tracking capabilities, such as C.H. Robinson’s Navisphere® technology

Final thoughts

Yes, there are obstacles to operating a supply chain in South American countries. Knowing the ins and outs of each country’s unique customs procedure, understanding which South American ports are best for your freight, and being able to track your shipments end-to-end will ensure your success in the region. Shippers who realize the potential of this “diamond in the rough” marketplace should work with a freight forwarder who will be extra focused and diligent in ensuring their freight moves quickly from customs fiscal warehouses to the final destinations. 

Enlist the aid of a global freight forwarding provider, like C.H. Robinson, who offers a global suite of services and has offices in the region that can help navigate any disruption in your supply chain.

Start the discussion with an expert in South America to accelerate your ecommerce trade. 

Goods

Is Your Supply Chain Prepared for Potential U.S. Tariffs on EU Goods?

Transatlantic tariffs came closer to reality in recent months after the United States Trade Representative (USTR) proposed tariffs on a list of products from the European Union (EU). 

Unfortunately, even if you’ve already gone through something similar with goods imported from China, the same strategy may not be effective for the tariffs on EU goods. This is due in large part to the types of proposed commodities from the EU.

The good news is there are things you can do today to adjust your import strategy to maintain compliance while insulating your company from the proposed tariffs.

Up to $25 billion worth of EU goods at stake

The USTR announcements in April and July proposed tariffs targeting up to $25 billion worth of goods. This includes items such as new aircraft and aircraft parts, foods ranging from seafood and meat to cheese and pasta, wine and whiskey, and even ceramics and cleaning chemicals. 

To date, the USTR has only provided a preliminary commodity list for the proposed U.S. tariffs on EU goods. No percentages have been announced, leaving many to wonder if the tariffs will be manageable—in the 5-10% range—or more substantial, like the 25% tariffs applied to China imports. 

On top of the tariffs, when the French Senate announced a 3% tax on revenue from digital services earned in France, President Trump threatened a counter-tax on French wine. But it’s unclear if this tax will come to fruition or fizzle out—especially since the USTR’s tariff list already includes many types of wine. 

5 key questions to insulate your supply chain

Looking for the best way to prepare your business from the potential tariff increases? Answering these key questions may help you adapt and insulate your company. 

-Do you have a plan to cover the costs? 

You may not be able to avoid paying the tariffs, but there are various strategies you may consider to help cover their costs. 

While not ideal, you could increase prices to end consumers. It may not be feasible to recover the entire cost of an added tariff, but you can at least offset a small portion of the tariff this way.

You can also adjust the cost of the goods with suppliers and manufacturers to cover a portion of the tariff. Just remember: pricing changes still need to meet the valuation regulations with U.S. Customs and Border Protection (CBP). 

-Will you need to increase your customs bond? 

The smallest customs bond an importer can hold is $50,000. That used to be enough for many importers to cover generally 10% of the duties and taxes you expect to pay CBP. 

Unfortunately, as many importers from China are learning, a 25% tariff on products can quickly exceed your bond amount. And bond insufficiency can shut down all your imports while resulting in delays and added expenses. 

To help avoid bond insufficiency, consider any increased duty amounts in advance of your next bond renewal period. And don’t wait to do this until the last minute, because raising your customs bond with your surety company can take up to four weeks. 

-Do you re-export goods brought into the U.S.? 

Duty drawback programs can’t be used by every importer. But if you can take advantage of them, they can result in big savings for your company.

In fact, you can get back 99% of certain import duties, taxes, and fees on imported goods that you re-export out of the U.S. Just be aware that you still need to pay the duties up front. And you might need to wait up to two years to get your refund. 

-Are your product classifications current and accurate?

With potential tariffs looming, consider reviewing your product classifications and make sure they’re accurate. If you find an issue, discuss it with your broker or customs counsel to discuss how you can properly rectify the issue, and avoid penalties from doing it incorrectly.

And while we’re on the topic of product classifications, never change them to evade tariffs. CBP will be on the lookout for this kind of activity, and the penalties for noncompliance can be steep.

-Do you have the support you need?

Changing your customs brokers may not sound appealing, but ensuring they provide all the services you need to stay compliant should be your top priority when working with them.

Your provider should help make sure you pay the appropriate duty rates for your products. And they should have people and services available globally to support your freight wherever it is located throughout the world. 

Also, consider simplifying your support by working with one provider that offers not only customs brokerage and trade compliance services but also global ocean and air freight logistics services. 

If you only employ one strategy…

Discuss your import strategy with your customs attorney or customs compliance expert. Bringing in specialized expertise is the most effective way to analyze how these tariffs could affect your products, your supply chain, and your business. 

If you don’t yet have a customs broker who can meet all your needs in today’s changing environment, consider C.H. Robinson’s customs compliance services. With over 100 licensed customs brokers in North America, and a Trusted Advisor® approach, our experts are ready to help.

____________________________________________________________

Ben Bidwell serves as the Director of U.S. Customs at  C.H. Robinson

lean supply chain

LEAN OR AGILE? FOR A COMPETITIVE ADVANTAGE IN THE SUPPLY CHAIN, THE ANSWER IS BOTH

Maintaining competitive advantage in the global logistics playing field is no easy task. There are hundreds of companies striving to earn the loyalty and business of global and domestic clients and the competition is becoming more intense with each passing day. Thanks to technology, companies are now able to take a step back and truly evaluate what structures make the most sense to meet customer demands in unpredictable markets.

Technology offering features such as predictive analytics are enabling logistics leaders to employ proactive measures for even the most complex of disruptions. However, readily available technology does not prove successful without careful consideration of the right platform and what supply chain management structure will meet the needs for specific company goals and customer demands. Company A might require a lean approach, while company B requires characteristics of both lean and agile supply chain structures. Before diving into which one benefits the most, it’s important to understand the differences between the two. 

An agile supply chain structure focuses heavily on layered benefits including visibility, predictability, and speed in terms of reaction times. Lean supply chain focuses on the most cost-effective options, ultimately reducing costs and recovering what’s been spent. Both are extremely important and attainable, but the trick is finding the right balance between the two while recruiting the best partners fit to support meeting the needs of customers. This element is critical in maintaining competitive advantage and ultimately makes or breaks customer relationships. 

“Everyone is striving to find that balance between having an agile supply chain and a lean supply chain because logistics and transportation costs fall to the bottom line,” explains Matt Castle, vice president, Global Forwarding Products and Services at C.H. Robinson. “These costs need to be recovered at some point in time, regardless of what business you’re in. There’s always going to be a focus on ensuring a lean supply chain in terms of cost and the economy, as well as how to find that balance of also maintaining flexibility based on the needs of the business. Having that agility can be a major differentiator in delivering on customer expectations.”

Castle adds: “Another question to think about is how to approach diversification in your supplier base. There can obviously be restraints based on a particular importer or exporter in terms of where they’re sourcing or buying product and availability, but I recommend ensuring you have an outlet from a secondary supplier. It’s worth the front-end legwork from a planning perspective to ensure you have a multitude of choices.”

The advantages of agile supply chain go far beyond mastering efficiencies or recovering costs and requires taking a holistic look at all the moving parts of your business. Implementing this type of approach relies heavily on planning and thinking differently in approaching the management of customer expectations while ensuring your business can offer a level of flexibility your competitors can’t offer. 

“When I think about an agile supply chain, I think about having flexibility—the ability to adapt at a quick pace, speed and the ability to recover from a certain level of uncertainty,” Castle says. “I believe it’s important to collaborate with a company that has a diverse portfolio of services. This is so businesses are able to adjust quickly from an ocean service to an air service, from an intermodal to a truckload, or even breaking down at a warehouse facility, LTL or small parcel.

“Having a provider that can seamlessly move from one product to the next is extremely important. It’s also important to ensure you’re engaging with a provider that has a global footprint. There are different scenarios playing out in different countries, so your ability to have a presence that can engage a global environment is critical.”

Any business implementing an agile supply chain approach must ensure supporting providers and partners are a good fit. Choosing the right third-party logistics provider can determine just how quickly your business can recover from an unpredictable situation and continue operations. Uncertainties cannot be completely eliminated, but they can be managed in a way that your business and customer relations do not suffer with the right partner. Without this, an agile supply chain structure is limited. 

“When thinking about uncertainty in the supply chain, having a third-party logistics provider that’s multimodal or that offers a variety of products allows you to seamlessly move from one product to the next,” Castle advises. “That is one of the best defenses against being able to navigate any level of uncertainty–from speeding up or slowing down products. It comes back to having some level of a global presence, as it’s something a lot of importers and exporters are trying to navigate today.”

Technology is equally important when aligning operations with an agile approach. This also requires careful consideration of what works in terms of what kind of products and the regions associated with operations. The technology needs to provide a level of visibility that enables your business to react to a variety of disruptors–from weather to policy, disruptions can come in different forms and require proactive, quick solutions to mitigate additional risks. 

“Put simply, it’s a matter of having product available–whatever your business may be, to either sell or have within the production cycle so that you’re not ending up with a plant shutdown,” Castle says. “An agile supply chain creates an opportunity to deliver product on the shelf that a competitor isn’t able to.”

“For C.H. Robinson, Navisphere is our technology platform. Managing any kind of supply chain is about how you bring visibility to what’s happening with the movement of your goods. What’s changing in terms of expectations around technology is how do you start to weave different factors in so that it starts to align with more predictive elements.”

____________________________________________________________________

Matt Castle is vice president of Air Freight Products and Services at C.H. Robinson. He joined C.H. Robinson in 1996 and has 25+ years of experience in the transportation industry. Castle is responsible for driving growth through global airfreight product. He received his degree in Aviation Administration and Management from the University of North Dakota.

ecommerce

In the Push for Faster Ecommerce Deliveries, How Can Logistics Stay Agile?

Today’s consumer isn’t used to waiting. They expect to get whatever product they want, wherever they want it, as soon as possible.  Perhaps nowhere is this more true than in the world of ecommerce. Customers look forward to their online purchases arriving faster than ever – sometimes on the same day that they click “purchase.” And with drone doorstop delivery on the horizon, compressed delivery timelines show no sign of stopping anytime soon.

Faster ecommerce delivery has created revolutionary convenience for consumers, but it’s also generated major transportation hurdles for companies to overcome. As a result, companies that want to deliver ecommerce shipments at the speeds that customers expect need to consider how to adapt all elements of their supply chains.

Managing more intricate logistics

Some companies that raced in to capture an early share of ecommerce market struggled to keep up while also keeping costs down. But that’s to be expected with a more complex distribution model.

Instead of shipping mostly to stores, companies now must determine if their supply chains can quickly move orders to many consumers in many locations. To do this, they must be able to proactively coordinate shipments whether they’re on the ground, on the ocean or in the air. 

Companies can help manage this complexity by taking a more hands-on logistics approach. They should draw on a variety of services and resources, while remaining efficient and visible. 

Many shippers, for example, choose to work with a third-party logistics provider to help facilitate the intricate details of shipments, provide visibility, and help freight arrive in a timely manner. 

Fixed or Flexible?

One of the biggest decisions a company in the ecommerce market will make is how they balance their supply chain. 

For example, a supply chain that’s more focused on fixed infrastructure than the fluid movement of goods can lower a company’s costs in the long run but also make them less agile. While a service-heavy, asset-light supply chain can make a company more flexible but also raise their costs.

Some companies are drawing a line in the sand. Some online businesses, for example, are rejecting ecommerce’s expectation of immediacy. Instead, they’re building supply chains that prioritize volume over speed. 

This has pushed ecommerce sellers to start providing more shipping time options. But it’s still unclear whether having more choices will lead to consumers changing their delivery expectations.

In any case, ecommerce fulfillment encompasses several, often-contradictory considerations of time, cost, and transportation mode. To bring these factors together through informed decision making is a challenging undertaking. But it’s essential for any company that wants to compete as ecommerce continues to grow and its barrier to entry continues to fall. 

Taking the first steps

Data goes hand in hand with ecommerce, so it can be a good area for a company to make its first key investment. 

Specifically, advanced business intelligence and predictive data modeling help companies better understand and forecast consumer demand, and they can then adjust their supply chains accordingly. Through access to this data and integration with service information from their shippers, companies can better identify their priorities and decide where to invest resources. 

Those that don’t know where to start should also know they don’t have to make these big decisions on their own. Industry experts like C.H. Robinson can offer a clear perspective—based on their scale and local experts in offices around the globe—and will understand their specific ecommerce business needs and translate them into productive logistics solutions.