Never a dull moment in the wild wonderful world of logistics and supply chain issues. This week, we focus on tariffs, “stuff” happening in the Red Sea, and more charges from UPS.
Tariffs
After last week's message highlighted the impact of tariffs, we heard from several members in our Two Minute Warning audience with questions and concerns about how these tariffs could affect their companies.
For those of you who are confused about the entire tariff situation, relax, you’ve got plenty of company! Here are some of the most common questions we've received:
How will the United States process millions of freight transactions that would now be subject to tariffs without clogging up supply chains? When will the tariffs go into effect and how long will they last? What will be the financial exposure for tariff items?
On April 3 at 1:00pm Central, TranzAct will be hosting a webcast “Understanding and Managing the Tariff Issue” to address questions like these along with our friends from the National Industrial Transportation League, CSCMP and the Global Shippers Forum. If you want to gain a better understanding about how the tariffs could potentially affect your company, we encourage you to register for this webinar.
We have some great resources that will be sharing valuable information. Karyn Booth, Partner and Chair of Thompson Hine’s Transportation Group, will be covering things such as the USTR’s Section 301 Tariff on China shipbuilding. Dan Ujczo, Senior Counsel, will cover the other tariff issues with Canada, Mexico, China, and customs procedures affecting tariffs. We'll also have Holly Pearce, Director of Logistics and Warehousing at Otis Elevator Company, share insights about strategies that shippers can use and actions they can take to help manage through this turbulent process.
Red Sea
Another item on our radar is the developments around the Red Sea conflict. At TPM, several “experts” noted that there was a likelihood that we could actually see a ceasefire with the Houthi rebels that would once again allow ships to safely navigate the Bab-el-Mandeb Strait and use the Suez Canal and the Red Sea. But after the Houthi rebels attempted to attack a U.S. aircraft carrier with drones and missiles, President Trump declared that the United States would hold Iran accountable for any attacks by the Houthis, and it looks like all bets are off. While a reopening of the Red Sea could have eased container rates, that’s not the direction we’re headed in now, and many ships will continue to transit around the Cape of Good Hope.
As noted above in the tariff section, one of the topics we will be covering in our webcast is how the cost of containers could be impacted by the Section 301 China shipbuilding issue. These charges have been estimated to increase container rates by $500-600 per container if they’re placed into effect. While last year ended with the ocean shipping environment settling down, we’re now watching for more turbulence ahead.
UPS Charges
Finally, in the parcel market there are new charges from UPS to note. Specifically, UPS will be making changes that affect payment processing charges. There are a number of different items, such as an increase in the late payment fee from 8% to 9.9% effective March 31, 2025, and a fee for paying invoices via check. We wouldn’t be surprised to see FedEx follow suit with similar charges.
When you add up all these concerns, it just underscores the reason why you need a sound supply chain strategy. We’re here to help if you’re looking for assistance with building that strategy or specifically concerned about tariffs, ocean rates, parcel charges or other issues. Simply give us a call, send me an email, or schedule a time to meet.
BY MIKE REGAN, CO-FOUNDER OF TRANZACT
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