The 2:00 Minute Warning

When I was a teenager my family moved to Cuernavaca, Mexico. I'd like to tell you that “mi Espanol era Spanish es muy bueno,” but since I attended Interlochen Arts Academy for high school, “pero no es el caso.”

But one phrase has stuck in my mind because my mother would utter these words whenever her “angelic” son stepped out of line. “Michael, Bueno Suerte! Vaya con Dios! Ten cuidado.” She was letting me know that I was irritating her and that there would be (bad) consequences if I didn't straighten up and change course.

I share this story because having studied what has happened over the past couple of weeks with tariffs, my mom’s words came back to me. Watching this tariff roller coaster ride play out, it might be time to say. “Mr. President, good luck! Go with GOD and be careful."

The President doesn't have to heed my mother's advice, but every shipper who is reading or viewing this week's Two Minute Warning needs to definitely heed this advice from TranzAct. If your company doesn't have a written Tariff Management Program (TMP) you are playing with fire and subjecting your company to some significant risks. 

That's also the advice from the outstanding resources that we had on a tariff webcast on April 3, (one day after the President’s announcement) with our friends from the National Industrial Transportation League (NITL), CSCMP, and the Global Shippers Forum. If you didn’t get a chance to attend, we strongly recommend that you listen to the recording. Our panel was outstanding in highlighting key points about tariff policy. 

Why does your company need a Tariff Management Program?

Last week, I was asked to give an impromptu presentation about the impact of tariffs at a conference for Presidents and CEOs. I shared two key points during the presentation. First, the tariffs are affecting almost every shipper. Even if your company doesn’t have import or export activity, it could impact your Tier 1 and Tier 2 suppliers. That’s why the impact of tariffs is so widespread.

The second and most crucial point is that relatively few companies are prepared to manage tariff changes. This was confirmed when I asked this group of almost 100 CEOs and Presidents to raise their hands if their companies had a written Tariff Management Program to guide their company through these uncharted tariff waters. One person raised their hand. When I asked the question again, only the same one person raised his hand.

Look, if the tariff situation has the potential to severely damage or compromise your company’s financial health, do you think it is wise to “wing it,” and be “reactive” when it comes to managing the tariff issue? If you choose to operate without a written plan then we wish you: “Bueno Suerte! Vaya con Dios! Ten cuidado.” 

However, many of you reading or viewing this are smarter than that. You know your company needs a plan! You may be wondering, “How do I create a plan or who can I work with to put a plan in place?" Fortunately, TranzAct has great resources and expertise to help create a plan to protect your company. 

In developing your plan, here are five areas where we assess the impact of tariffs: Expenses, cash flows, inventories, options and alternatives, and structures for cost sharing arrangements with your suppliers and customers. 

Supply chain professionals will have many questions and issues to consider in the coming weeks and months. You will be very busy, so may I suggest that instead of climbing the tariff mountain and figuring out the answers to these questions by yourself send me an email, give me call or schedule a one-on-one virtual meeting via Calendly to hear more about our Tariff Management Program.

Last but not least, this week we released our interview with noted economist Gary Shilling about trends in the global economy. As he has been doing for us for the past 15 years, he “knocked it out of the park” and shared great insights. The charts and comments about how the global economy has been changing were illuminating as were his comments about the possibility of the big “R” word. 

After listening to the interview, if you have further questions about a Tariff Management Program or anything else, we’d welcome speaking with you.

BY MIKE REGAN, CO-FOUNDER OF TRANZACT

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