The 2:00 Minute Warning

Last week things “got real” on the tariff front. After multiple delays, an array of country-specific tariffs took effect on August 7 and other massive tariff increases were announced. Then yesterday, August 12, we learned that the grace period for resolving the tariff situation with China will be extended another 90 days.

Looking forward, when it comes to protecting your company from the impact of tariffs, inaction is not an option. Whether it's country-specific tariffs or item-specific ones, these additional charges are likely to stick around in some format and continue changing for the next couple of years.

So instead of waiting to see how the tariff situation will play out before doing anything, let’s have a discussion about how TranzAct’s Tariff Management Program (TMP) can help your company manage in these uncharted waters.

The TMP does four critically important things. First, it will quantify the potential financial impact resulting from tariffs. Second, it will identify how the tariffs will impact your balance sheet. Third, it will help you and your team understand the options and alternatives that can reduce the impact of the tariffs. For example, our team has helped companies reduce their per container costs by $400 - $600 by addressing critical INCO terms and “country of origins” issues. Finally, the TMP will help your company identify the strategies that will be useful in your discussions with suppliers and customers about who actually pays for the tariffs. 

When our TMP team walked me through how the tariffs have exposed the flaws or weaknesses in supply chains that are leaving companies seriously exposed and struggling to manage in a sea of uncertainty, it was clear that now is the time for action. One CEO told me that tariffs aren’t a “big deal” for his company because his company doesn’t have a lot of imports. I then asked if there were any critical Tier 1 or Tier 2 suppliers who could be affected by the tariffs. It became apparent that his company has never identified supply chain risk factors in their supplier base and that this is more important now.

Taking a quick walk down memory lane, what the Covid crisis did was help companies realize that their supply chains needed attention. Truth be told, there were gaps in supply chains that left many companies seriously exposed.

Today the circumstances are different, but once again, companies are scrambling to address the impact that tariffs are having on their supply chains and profitability.

As you assess whether a TMP is right for your company, consider these questions. First, is our company ready to invest in building a stronger supply chain, or do we want to continue having external events create chaos in our supply chain and operations? Second, should our supply chain be proactive instead of reactive and having to constantly scramble and fight fires? Finally, do we have accurate data that we can use to identify good options and alternatives when adversity strikes? TranzAct’s TMP identifies and clarifies the various options and alternatives that your company should be looking at right now.

TranzAct has the resources to help your company manage tariffs and protect your supply chain. To learn more, give us a call at 630-833-0890 Ext 190, send me an email, or schedule a time to meet via Calendly.

BY MIKE REGAN, CO-FOUNDER OF TRANZACT

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