Latest news with #Flexe
Yahoo
19-05-2025
- Business
- Yahoo
Trump's tariff reversal is sending importers back to the drawing board for transportation and warehousing
Trump's tariff reversal on Chinese goods has complicated the math for US importers. A week ago, delaying duty payments seemed smart — now, it may make sense to pay early. And then there's the issue of what to do with the surges of arriving inventory. Just when US importers were starting to make sense of President Donald Trump's 145% tariffs on Chinese goods, the negotiator-in-chief changed the deal again. Now, with the plans on pause and current import tariffs dropping down from 145% to 30% for China, importers are having to rethink how — and when — they bring goods into the US, according to Ben Dean, VP at warehousing network Flexe. Tariffs are indeed a lot lower than they were last week, but they're still far higher than they have been for years, and there's no clear answers about which way they'll go in the next 90 days or beyond. All of that has importers looking at an even wider menu of warehousing and transportation options than they were just a short while ago — if they're not biting the bullet and paying the tariffs outright. Before Monday's announcement, the 145% tariffs on Chinese goods made for rather simple (if unpleasant) decision-making, since they were so high they effectively blocked all but the most essential products from crossing the Pacific. For goods that were already en route, many businesses turned to a specialized type of storage facility, known as a bonded warehouse. These facilities allow importers to park their goods duty-free for up to five years, and only pay the tariff charge that is in effect at the time they accept their inventory. "By holding the goods under bond, there's the possibility that they might pay at a lower rate," Dean said in a previous interview with Business Insider. In a follow-up interview after the tariffs fell to 30%, Dean told BI that, as expected, interest in bonded warehousing has fallen precipitously — though not entirely. Now, he said there's more interest in foreign-trade zones. FTZs are somewhat similar to bonded facilities in the sense that they allow importers to delay payment of tariffs, but the key difference is that FTZ lock in the tariff rate at the time of arrival, rather than when the items leave the facility and officially enter the US. "Should we not make progress on a formal agreement and in 91 days, rates shoot up again, that is a risk," Dean said. At least now, "there's an upside risk, which we didn't have" before, he said. Dean also said demand is up for trains and short-haul trucks, while long-haul trucking rates are comparatively down — an indication importers are trying to slow the roll of previously rushed inventory. "The need for speed has gone away, and slower and more economical transportation modes are now coming into high demand," he said. In other words, importers who brought inventory in ahead of tariffs are using the country's hundreds of miles of train tracks instead of actual warehouses to effectively hold their merchandise until it comes time to sell it. For the impending surge of new shipments — container bookings are up nearly 300% between the US and China this week — Dean said there is ample warehouse capacity to receive it. "The ports are trying to get their things in order to make sure that that surge can get off the ship," he said. "And everybody's seeking to avoid any kind of headline event like we had off the Port of Long Beach during the peak of COVID," when massive backlogs on the docks kept container ships lingering at anchor for weeks. Even so, there could still be some capacity challenges at the West Coast ports in the coming weeks. "We are — in real time — changing the economics of the cost of inventory," Dean said. "We're getting this real pilot to see what happens to our supply chain domestically when that happens." Read the original article on Business Insider Sign in to access your portfolio
Business Insider
18-05-2025
- Business
- Business Insider
Trump's tariff reversal is sending importers back to the drawing board for transportation and warehousing
Just when US importers were starting to make sense of President Donald Trump's 145% tariffs on Chinese goods, the negotiator-in-chief changed the deal again. Now, with the plans on pause and current import tariffs dropping down from 145% to 30% for China, importers are having to rethink how — and when — they bring goods into the US, according to Ben Dean, VP at warehousing network Flexe. Tariffs are indeed a lot lower than they were last week, but they're still far higher than they have been for years, and there's no clear answers about which way they'll go in the next 90 days or beyond. All of that has importers looking at an even wider menu of warehousing and transportation options than they were just a short while ago — if they're not biting the bullet and paying the tariffs outright. Before Monday's announcement, the 145% tariffs on Chinese goods made for rather simple (if unpleasant) decision-making, since they were so high they effectively blocked all but the most essential products from crossing the Pacific. For goods that were already en route, many businesses turned to a specialized type of storage facility, known as a bonded warehouse. These facilities allow importers to park their goods duty-free for up to five years, and only pay the tariff charge that is in effect at the time they accept their inventory. "By holding the goods under bond, there's the possibility that they might pay at a lower rate," Dean said in a previous interview with Business Insider. In a follow-up interview after the tariffs fell to 30%, Dean told BI that, as expected, interest in bonded warehousing has fallen precipitously — though not entirely. Now, he said there's more interest in foreign-trade zones. FTZs are somewhat similar to bonded facilities in the sense that they allow importers to delay payment of tariffs, but the key difference is that FTZ lock in the tariff rate at the time of arrival, rather than when the items leave the facility and officially enter the US. "Should we not make progress on a formal agreement and in 91 days, rates shoot up again, that is a risk," Dean said. At least now, "there's an upside risk, which we didn't have" before, he said. Dean also said demand is up for trains and short-haul trucks, while long-haul trucking rates are comparatively down — an indication importers are trying to slow the roll of previously rushed inventory. "The need for speed has gone away, and slower and more economical transportation modes are now coming into high demand," he said. In other words, importers who brought inventory in ahead of tariffs are using the country's hundreds of miles of train tracks instead of actual warehouses to effectively hold their merchandise until it comes time to sell it. For the impending surge of new shipments — container bookings are up nearly 300% between the US and China this week — Dean said there is ample warehouse capacity to receive it. "The ports are trying to get their things in order to make sure that that surge can get off the ship," he said. "And everybody's seeking to avoid any kind of headline event like we had off the Port of Long Beach during the peak of COVID," when massive backlogs on the docks kept container ships lingering at anchor for weeks. Even so, there could still be some capacity challenges at the West Coast ports in the coming weeks. "We are — in real time — changing the economics of the cost of inventory," Dean said. "We're getting this real pilot to see what happens to our supply chain domestically when that happens."
Business Insider
03-05-2025
- Business
- Business Insider
American shoppers love having lots of options. Trump's trade war could end that.
If the past half century of American consumer life has had one defining feature, it's that the average shopper has a vast number of different product choices available. Donald Trump's trade war could upend that. Nearly 36 years ago, when Russian politician Boris Yeltsin toured a Texas grocery store, he famously thought the display was some sort of setup. "When I saw those shelves crammed with hundreds, thousands of cans, cartons and goods of every possible sort, for the first time I felt quite frankly sick with despair for the Soviet people," he later wrote. Since then, American retail stores have only gotten larger and more varied, and major retailers often tout the breadth of their assortment — measured in stock-keeping units, or SKUs — as a key measure of ability to give US shoppers new and exciting reasons to buy. The typical Walmart Supercenter has some 120,000 SKUs, while Amazon boasts of its ability to deliver tens of millions of unique items in two days or less. The two giants represent only a fraction of US retail. Many of these products are already sourced domestically, but the variety consumers have come to expect relies on an extensive global supply chain that delivers food and merchandise around the globe at astonishingly low prices. Now, Trump's tariffs on goods from other countries are starting to squeeze America's once-endless supplies of stuff. "There's definitely a trend towards limiting the inventory, the SKUs, cutting things by half," said Ben Dean, head of network for Flexe, a flexible warehousing service that works with several top retailers. "At the client conference we were at last week, we've had multiple say that they had just canceled purchase orders," he added. "So that has a direct impact on the assortment, as well as the depth of what's available to the American consumer." As cargo volumes plummet, execs from major retailers have warned Trump that US shoppers could start to see empty shelves in the coming weeks if his policies continue. Trump acknowledged in a cabinet meeting Wednesday that his policies could lead to fewer choices for holiday shoppers. "Maybe the children will have two dolls instead of 30" he said. "Maybe the two dolls will cost a couple of bucks more than they would normally." Michigan State University professor and supply chain researcher Jason Miller explained the conundrum that toy wholesalers and retailers are grappling with due to Trump's 145% tariffs on imports from China, a major supplier to the US. "I'm going to be very, very, very cautious. I'm only going to import my best-sellers. I'm only going to import the stuff where I feel comfortable I can charge that higher price," he told Business Insider. "You're going to get a lot less product variety, and you're going to get a lot lower imports as a result of this. And we're starting to see those effects." Like toys, the apparel industry has seen a shift in production from the US to overseas, driven by the pursuit of both price and variety. Bayard Winthrop, founder and CEO of California-based apparel maker American Giant, told BI that US households spend roughly the same annual clothing budget now as they did in the 1980's, but with one important change. "In 1980 it represented about 60 items total for that family. Today, it's about 160," he said. "So there has been a structural shift away from lower volume, higher quality, towards higher volume, cheaper." Low prices and expansive choices were key selling points of increased globalization back in the 1990s, but Winthrop says those benefits have come at the cost of US jobs. "My hope is that there is this shift towards better quality stuff, made closer to home, that provides good, viable work to people that need it," he said. "If the effect of that is that average Americans need to begin to be a bit more conscious of how they're consuming, I'll take that trade." It's not clear that all American-made products are necessarily higher quality than imported ones, and shoppers may continue to buy goods at tariff-inflated prices. Still, one strong likelihood is emerging: American shoppers will soon have noticeably fewer choices about what they can buy.
