The 2:00 Minute Warning

 
There is a reason why this weekly email, launched over fifteen years ago, was called the Two Minute Warning instead of the Two Minute Suggestion. Our focus has always been, and will continue to be, providing logistics and supply chain professionals with critical information that could affect their supply chains, freight costs and bottom line profitability. And of course, we have a long history of creating solutions for companies to navigate supply chain challenges—and can do the same for you.
 
At the top of the "critical issue" list right now is what’s going on with tariffs. Last week, there was new concern over trade with Europe after the Trump administration announced that they were considering 50% retaliatory tariffs for the EU. More recently they’ve communicated that any tariff escalation would be delayed from June 1 to July 9 to align with the other paused tariffs.
 
Whether it’s 50%, 145%, or another figure, at a certain point it starts to look like trade between countries will be severely disrupted or substantially shut down. Were that to become a reality, what could that mean for your organization? What would it mean for the suppliers that are critical to your organization?
 
These and other questions are why we’ve been emphasizing the need for a tariff management plan. Last week I had a conversation with a CEO who had read about TranzAct's Tariff Management Program. He said: “Mike, I’m really concerned about the tariffs. I don’t think our company understands the gravity of this tariff situation. More importantly, I don't know if we have the resources to guide us through, or give us some options about what we could be or should be doing.”
 
He confirmed that like many other companies, his company doesn't have any written tariff plan that addresses the financial impact of the tariff changes, how they will affect cash flow and inventory strategies or alternatives to mitigate how the tariffs will affect their company.
 
Why else is developing a tariff management program so important? Companies need to understand the direct cost implications as well as the changes to cash flow or inventory, plus their options to mitigate the impact of the tariff changes. Logistics professionals will also need to be ready for discussions with customers and suppliers. All these items require creating and communicating new strategies and we're here to help.
 
He reached out to me because he knows that TranzAct can help his company build that Tariff Management Plan and provide outstanding support to his company. TranzAct's great network of resources can answer your questions and provide solutions to address the tariff problem. So if you have questions, do what this CEO did last week. Give us a call with your questions or better yet, let's schedule a time to meet. If we don’t have the answer, we probably have someone in our network that does.
 
Before leaving, there are three other "Warnings" for companies with LTL, parcel and ocean freight.
 
First, LTL freight classification changes that take effect on July 19 are approaching fast and could have a major impact on budgets. If you’re looking for help identifying whether the items you ship will be included in this first round of changes to the NMFC, get in touch. We have a team with expertise in LTL shipping that can help walk you through it all.
 
Second, parcel charges from UPS and FedEx are increasing. We've already heard from companies who are seeing new or increased charges on their invoices, such as additional zip codes being subject to delivery area surcharges. These charges can add up and have a significant impact on your costs.
 
Third, as we have previously warned, ocean rates are going up - WAY UP! Rates have risen around 20-50% for some shippers over the past five weeks and are likely to continue rising through June and July. There’s a scramble to book ocean freight before the 90-day tariff pause ends and a hectic shipping season underway.
 
If you’re looking for help navigating any of this, we encourage you to reach out.

BY MIKE REGAN, CO-FOUNDER OF TRANZACT

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