Latest news with #MaggieBarnett
CTV News
21-05-2025
- Business
- CTV News
Importers race to turn U.S. warehouses into tariff-free zones
A container ship sails off from a container terminal in Qingdao in eastern China's Shandong province Sunday, April 6, 2025. (Chinatopix Via AP) LONDON/NEW YORK - Companies importing goods into the United States from China are rushing to convert warehouses into facilities that are exempt from President Donald Trump's tariffs until they are ready to sell the merchandise. The U.S. has more than 1,700 bonded warehouses, facilities where imported goods can be held without immediate payment of customs duties such as tariffs, currently 30% for shipments from China. Such fees are only paid when the goods leave the bonded warehouse, allowing businesses to manage funds more effectively at a time of extreme trade policy volatility. The rush to bond U.S. warehouses for goods ranging from clothing to auto parts is a bet for some that raised U.S. tariffs will be only a short-term policy by the Trump administration. Due to Trump's tariff war, many of these bonded warehouses are now at full capacity, and prices for space in them have skyrocketed, four industry sources told Reuters, prompting companies to apply to U.S. Customs and Border Protection to expand bonded space. Utah-based fulfillment firm LVK Logistics, for instance, is in the process of making one of its warehouses bonded 'in response to the tariffs,' CEO Maggie Barnett told Reuters, adding she expects the process to take three to four months. 'You can bond more or less anywhere,' said Chris Rogers, who manages the supply chain research team at consultancy S&P Global Market Intelligence. 'It involves money and it takes time, but if you are a big company and expect tariffs are going to remain elevated for an extended period, you can convert (existing) spaces into bonded warehousing.' Other companies and logistics firms are seeing their applications with the CBP backlogged in some cases by over six months, said Chris Huwaldt, vice president of solutions at WarehouseQuote, a logistics research firm. Last year, the process would have taken a couple of months, he added. Huwaldt said getting storage space certified as bonded 'could cost thousands of dollars or it could cost six figures,' depending on the state the warehouse is based in, the financial status of the company and the additional security measures required by the CBP for a specific location. Trump's on-again, off-again tariff policy - which pushed duties on Chinese goods to as much as 145 per cent in April before lowering them - makes the flexibility afforded by bonded warehouses appealing to companies. 'A lot of companies importing from China - not just China-based, but U.S. importers as well - are taking advantage of bonded warehouses to assist with cash flow,' said Cindy Allen, shipping consultant at Trade Force Multiplier and a former FedEx Logistics executive. 'It doesn't necessarily save them money as the tariffs have to be paid when the goods are withdrawn from the warehouse. But it allows companies to pay duties in smaller increments as they are sold,' she said. The CBP said it has noticed an increased interest in the use of bonded warehouses for continued compliance with new regulations and executive orders. The White House did not immediately respond to a request for comment. 'Unprecedented' warehouse rush In early 2024, bonded storage space was rented at approximately twice the cost of standard storage rates, but since the start of 2025, it has risen to four times the price to rent non-bonded space, according to WarehouseQuote data. 'This rush to bonded warehouses to ease cash flow is unprecedented,' Allen said. During the first Trump administration, many companies simply accepted the levies on China. But this meant firms paid more over a prolonged period of time while also being forced to invest in alternative sources to China. Importers 'don't want to repeat the past mistakes,' Allen said. Setting up new bonded warehouses could be risky, because the United States may go back to higher tariffs once its 90-day reprieve ends. Vladimir Durshpek, cofounder of Venice, Florida-based warehousing and storage company CargoNest, said he is weighing adding a third bonded warehouse to his assets until U.S. tariff negotiations are completed. 'What we don't want to do is rush into providing more capacity, and then things change,' he said. Fremont, California-based storage company DCL Logistics has not made definitive plans for bonded space because 'it's unclear if the demand will stay this high,' Chief Revenue Officer Brian Tu said. 'By the time a lot of warehouses would be able to achieve bonded status right now, these additional tariffs might be gone, and the demand for bonded space might not be there,' said Jacob Roseburrough, director of marketing at WarehouseQuote. Reporting by Richa Naidu and Arriana Mclymore in London; additional reporting by Trevor Hunnicutt; Editing by Lisa Jucca and Rod Nickel, Reuters
Free Malaysia Today
21-05-2025
- Business
- Free Malaysia Today
Importers race to turn US warehouses into tariff-free zones
The US has had more than 1,700 bonded warehouses, facilities where imported goods can be held without immediate payment of customs duties such as tariffs. (EPA Images pic) LONDON : Companies importing goods into the US from China are rushing to convert warehouses into facilities that are exempt from President Donald Trump's tariffs until they are ready to sell the merchandise. The US has more than 1,700 bonded warehouses, facilities where imported goods can be held without immediate payment of customs duties such as tariffs, currently 30% for shipments from China. Such fees are only paid when the goods leave the bonded warehouse, allowing businesses to manage funds more effectively at a time of extreme trade policy volatility. The rush to bond US warehouses for goods ranging from clothing to auto parts is a bet for some that raised US tariffs will be only a short-term policy by the Trump administration. Due to Trump's tariff war, many of these bonded warehouses are now at full capacity, and prices for space in them have skyrocketed, four industry sources told Reuters, prompting companies to apply to US customs and border protection to expand bonded space. Utah-based fulfillment firm LVK Logistics, for instance, is in the process of making one of its warehouses bonded 'in response to the tariffs,' CEO Maggie Barnett told Reuters, adding she expects the process to take three to four months. 'You can bond more or less anywhere,' said Chris Rogers, who manages the supply chain research team at consultancy S&P Global Market Intelligence. 'It involves money and it takes time, but if you are a big company and expect tariffs are going to remain elevated for an extended period, you can convert (existing) spaces into bonded warehousing,' Rogers said. Other companies and logistics firms are seeing their applications with the CBP backlogged in some cases by over six months, said Chris Huwaldt, vice president of solutions at WarehouseQuote, a logistics research firm. 'Last year, the process would have taken a couple of months,' he added. Huwaldt said getting storage space certified as bonded 'could cost thousands of dollars or it could cost six figures,' depending on the state the warehouse is based in, the financial status of the company and the additional security measures required by the CBP for a specific location. Trump's on-again, off-again tariff policy – which pushed duties on Chinese goods to as much as 145% in April before lowering them – makes the flexibility afforded by bonded warehouses appealing to companies. 'A lot of companies importing from China – not just China-based, but US importers as well – are taking advantage of bonded warehouses to assist with cash flow,' said Cindy Allen, shipping consultant at Trade Force Multiplier and a former FedEx Logistics executive. 'It doesn't necessarily save them money as the tariffs have to be paid when the goods are withdrawn from the warehouse. 'But it allows companies to pay duties in smaller increments as they are sold,' she said. The CBP said it has noticed an increased interest in the use of bonded warehouses for continued compliance with new regulations and executive orders. The White House did not immediately respond to a request for comment. 'Unprecedented' warehouse rush In early 2024, bonded storage space was rented at approximately twice the cost of standard storage rates, but since the start of 2025, it has risen to four times the price to rent non-bonded space, according to WarehouseQuote data. 'This rush to bonded warehouses to ease cash flow is unprecedented,' Allen said. During the first Trump administration, many companies simply accepted the levies on China. However, this meant firms paid more over a prolonged period of time while also being forced to invest in alternative sources to China. 'Importers 'don't want to repeat the past mistakes',' Allen said. Setting up new bonded warehouses could be risky, because the US may go back to higher tariffs once its 90-day reprieve ends. Vladimir Durshpek, co-founder of Venice, Florida-based warehousing and storage company CargoNest, said he is weighing adding a third bonded warehouse to his assets until US tariff negotiations are completed. 'What we don't want to do is rush into providing more capacity, and then things change,' he said. Fremont, California-based storage company DCL Logistics has not made definitive plans for bonded space because 'it's unclear if the demand will stay this high,' chief revenue officer Brian Tu said. 'By the time a lot of warehouses would be able to achieve bonded status right now, these additional tariffs might be gone, and the demand for bonded space might not be there,' said Jacob Roseburrough, director of marketing at WarehouseQuote.
Reuters
21-05-2025
- Business
- Reuters
US importers race to create bonded warehouses amid Trump tariffs
LONDON/NEW YORK, May 21 (Reuters) - Companies importing goods into the United States from China are rushing to convert warehouses into facilities that are exempt from President Donald Trump's tariffs until they are ready to sell the merchandise. The U.S. has more than 1,700 bonded warehouses, facilities where imported goods can be held without immediate payment of customs duties such as tariffs, currently 30% for shipments from China. Such fees are only paid when the goods leave the bonded warehouse, allowing businesses to manage funds more effectively at a time of extreme trade policy volatility. The rush to bond U.S. warehouses for goods ranging from clothing to auto parts is a bet for some that raised U.S. tariffs will be only a short-term policy by the Trump administration. Due to Trump's tariff war, many of these bonded warehouses are now at full capacity, and prices for space in them have skyrocketed, four industry sources told Reuters, prompting companies to apply to U.S. Customs and Border Protection to expand bonded space. Utah-based fulfillment firm LVK Logistics, for instance, is in the process of making one of its warehouses bonded "in response to the tariffs," CEO Maggie Barnett told Reuters, adding she expects the process to take three to four months. "You can bond more or less anywhere," said Chris Rogers, who manages the supply chain research team at consultancy S&P Global Market Intelligence. "It involves money and it takes time, but if you are a big company and expect tariffs are going to remain elevated for an extended period, you can convert (existing) spaces into bonded warehousing." Other companies and logistics firms are seeing their applications with the CBP backlogged in some cases by over six months, said Chris Huwaldt, vice president of solutions at WarehouseQuote, a logistics research firm. Last year, the process would have taken a couple of months, he added. Huwaldt said getting storage space certified as bonded "could cost thousands of dollars or it could cost six figures," depending on the state the warehouse is based in, the financial status of the company and the additional security measures required by the CBP for a specific location. Trump's on-again, off-again tariff policy - which pushed duties on Chinese goods to as much as 145% in April before lowering them - makes the flexibility afforded by bonded warehouses appealing to companies. "A lot of companies importing from China - not just China-based, but U.S. importers as well - are taking advantage of bonded warehouses to assist with cash flow," said Cindy Allen, shipping consultant at Trade Force Multiplier and a former FedEx Logistics executive. "It doesn't necessarily save them money as the tariffs have to be paid when the goods are withdrawn from the warehouse. But it allows companies to pay duties in smaller increments as they are sold," she said. The CBP said it has noticed an increased interest in the use of bonded warehouses for continued compliance with new regulations and executive orders. The White House did not immediately respond to a request for comment. In early 2024, bonded storage space was rented at approximately twice the cost of standard storage rates, but since the start of 2025, it has risen to four times the price to rent non-bonded space, according to WarehouseQuote data. "This rush to bonded warehouses to ease cash flow is unprecedented," Allen said. During the first Trump administration, many companies simply accepted the levies on China. But this meant firms paid more over a prolonged period of time while also being forced to invest in alternative sources to China. Importers "don't want to repeat the past mistakes," Allen said. Setting up new bonded warehouses could be risky, because the United States may go back to higher tariffs once its 90-day reprieve ends. Vladimir Durshpek, cofounder of Venice, Florida-based warehousing and storage company CargoNest, said he is weighing adding a third bonded warehouse to his assets until U.S. tariff negotiations are completed. "What we don't want to do is rush into providing more capacity, and then things change," he said. Fremont, California-based storage company DCL Logistics has not made definitive plans for bonded space because "it's unclear if the demand will stay this high," Chief Revenue Officer Brian Tu said. "By the time a lot of warehouses would be able to achieve bonded status right now, these additional tariffs might be gone, and the demand for bonded space might not be there," said Jacob Roseburrough, director of marketing at WarehouseQuote.
Yahoo
03-04-2025
- Business
- Yahoo
The Slow Death of Fast Fashion—And What Comes Next
Following reciprocal tariff announcement, LVK CEO Maggie Barnett analyzes how fashion brands can navigate new landscape in open letter NEW YORK, April 03, 2025--(BUSINESS WIRE)--In the wake of President Trump's sweeping tariff announcements, the retail world is bracing for a seismic shift that will redefine the inner logistics of fast fashion. With the back-breaking production speeds and impossible turnaround times that have long defined this retail category now under threat, we're facing an unavoidable reset of a system built on razor-thin margins and lightning-quick fulfillment that disrupted and defined an era—an era that is poised to fade fast. We're witnessing firsthand how this economic reality is forcing a complete reimagining of standard industry practice. Why Fast Fashion Must Evolve: Triple Threat to Fast Fashion: Trump's tariffs closing the de minimis loophole, USPS restructuring costs for lightweight packages, and shifting consumer behavior toward sustainability and secondhand markets are creating a perfect storm for the industry The Math Doesn't Work Anymore: Leveraging the de minimis for the 20% cost savings that fast fashion relied on has evaporated, making ultra-cheap, high-volume fashion financially unsustainable The Way Forward with a Hybrid Model: Smart brands will balance fast elements (trend-driven, pre-sale models) with slow elements (timeless basics that can afford longer transit times) rather than attempting pure fast or slow approaches Immediate Action Required: Diversify supply chains beyond China and Vietnam, implement pre-sale models to validate demand before production, strategically distribute inventory across the US and potentially free trade zones, and build customer communities rather than focusing solely on transaction volume Opportunity to Shift the Disruption: While this threat feels overtly existential it's a chance to build more financially and environmentally sustainable fashion businesses that better meet how consumers actually shop, dress and feel The Catalysts for Change (The Murder Weapons) Will this spell the swift death of the fast fashion model as we know it, a steady demise, or could a strategic transformation in retail infrastructure become an unexpected lifeline? While the full impact is still unfolding, we know these changes aren't happening in isolation. Multiple forces have converged to create the perfect storm: First, the administration's Executive Orders have closed the de minimis loophole that fast fashion businesses relied upon. This previously gave most fast fashion businesses a savings of up to 20% on the COGS—the math simply doesn't work anymore for ultra-cheap, high-volume fashion. Brands that built their empires on lean margins are now facing existential threats as they scramble to absorb costs they cannot pass onto price-sensitive consumers. Second, the USPS's recent restructuring of weight-based pricing has quietly delivered another blow. Packages under one pound—the bread and butter of fast fashion e-commerce—now come with significantly higher shipping costs. This seemingly technical change is cascading through supply chains and eroding already thin profit margins, directly impacting the price point that consumers have come to expect. And let's face it—shoppers are less likely to spend $30 on a skirt they purchased for $18 two months ago. But more importantly, the entire appeal of fast fashion hinges on instant gratification and immediate access—it's not just about the trends themselves, but about getting them NOW. The longer the wait, the less valuable the purchase becomes. If shoppers can't get those zeitgeisty, of-the-moment trends practically the instant they emerge, the driving force behind their purchasing decisions dissolves. This essentially dismantles the entire appeal of trend-driven, affordable fashion that democratized the style world. Finally, consumers themselves are accelerating the shift. U.S. apparel resale grew seven times faster than traditional retail in 2023, hitting $43 billion as shoppers became more cost-conscious. This isn't just a passing trend—the secondhand market is projected to outpace the overall apparel market threefold through 2027. Behind these numbers is real consumer concern: most Americans (83%) are aware of tariff impacts, expect higher prices (86%), and plan to adjust their shopping habits accordingly. Gen Z is leading this shift, with over 80% embracing thrifted goods. With more than two-thirds of Americans planning to cut back on non-essential purchases like clothing, brands must recognize this fundamental change in consumer behavior. Hybrid Fashion: A New Retail Paradigm "Everyone's got a plan until they get hit"—a famous quote from boxing legend Joe Louis that has been appropriated over the years by everyone from fellow heavyweight Mike Tyson to military generals and CEOs. The tariff gut punch has landed, and the meticulously optimized supply chains that brands have relied upon are suddenly vulnerable. The question isn't whether your business will get hit, but how quickly you can adapt after the impact. The future isn't a return to pre-internet retail, nor is it the continuation of the disposable fashion model. Instead, we're advocating for what we call "hybrid fashion"—a more nuanced approach that strategically balances fast and slow elements. Fast fashion operates like a casino: high-volume bets on trends with quick payoffs but inevitable long-term losses in unsold inventory, sustainability reputation, and customer loyalty. Slow fashion, while environmentally and ethically conscious, often can't compete with the quick retail-therapy dopamine hit of trend-chasing commerce. The hybrid fashion model takes a different approach. It's about being deliberate in what you produce quickly versus what can move at a more measured pace. Think of it this way: Fast fashion is click-buy, instantaneous, and printing on-demand—the avenue through which you create your favorite celebrity's high end outfit for 90% cheaper than the original. In the hybrid model, these elements still exist for trend-driven pieces like swimwear or Y2K revival items, but they're produced in more precise quantities and often through pre-sale models that validate demand before production. Slow fashion represents your tried and true pieces—basics that can sit on a boat in the middle of the ocean for months without cycling out of what's trending. These focus on wardrobe foundations and versatile pieces that aren't season-dependent—white tees, plain sweatshirts, socks, and denim that can afford longer transit times and sustainable production methods. A Real Do or Die Moment The brands that will thrive in this new era will be those rethinking their entire approach to inventory. When 76% of Americans anticipate making changes to their shopping habits in response to tariffs, the old model of overproduction and discounting is financially unsustainable. These abrupt, abrasive twists in the system can paralyze businesses with shock or trap all of us in an anxious thought spiral, but the opportunity lies in adjusting our perspective and the overall narrative at hand. This isn't an existential threat—it's a profound shift that rewards adaptability, agility, and foresight. The Path Forward Hybrid fashion is the modernized approach. Successful brands will still have to compete with high-volume retailers like Temu that capitalize on impulse buying, but they'll need to balance that by also excelling at durable, timeless pieces. Survival requires immediate adaptation: Diversify Supply Chains: Relying solely on Chinese manufacturing is too risky. Instead of optimizing for the cheapest, fastest route, brands must prioritize flexibility—sourcing from multiple regions to mitigate risk and navigate shifting trade policies and geopolitical disruptions. The era of hyper-optimized, cost-minimized supply chains is over; optionality is the new optimization. Embrace Pre-Sale Models: Forward-thinking brands are already pioneering this approach. Revolve has implemented pre-order, ship-later options for high-demand items, while Telfar's ubiquitous bags use a pre-order model that prevents overproduction while ensuring accessibility. Smaller brands like Kitri have built their entire business around selling out collections and then offering pre-orders to match production exactly with demand. Even luxury players like Jacquemus are adopting a hybrid model where some pieces are immediately available while others release via pre-orders for better inventory control. This approach transforms inventory from a liability to an asset. This will be especially crucial for small to midsize brands that don't have the liquid capital to afford making large quantities that might end up sitting in a warehouse for long periods. Rethink Distribution: For fast fashion elements, brands can still produce trending pieces and ship via air directly to a US 3PL or via a free trade zone for distribution. For less time-sensitive pieces, brands can leverage more cost-effective ocean freight, allowing for longer transit times without compromising margins. Strategic placement of inventory across the U.S. and Canada allows brands to navigate the new tariff landscape while maintaining competitive delivery times. Build Community Over Consumption: The most resilient brands are shifting focus from transaction volume to customer lifetime value, creating emotional connections that transcend pricing pressure. Companies like Olivia Rose The Label with their made-to-order model and Maison Cléo, which produces garments only after they've been pre-ordered, are fostering deeper connections with consumers who appreciate the intentionality behind their purchases. While many may lament the evolution of $15 dresses and weekly collection drops, the opportunity ahead is far more exciting: creating fashion businesses that are environmentally mindful, financially sustainable, and genuinely responsive to how consumers actually live and dress. Tariff whiplash may threaten to paralyze small businesses that lack liquid capital, but don't fear the reaper quite yet—those who adapt to hybrid fashion will find a more sustainable path forward. We don't need to view pivoting as a last-ditch effort or the end of exciting industry disruption—it's the beginning of the next stage of adaptive growth. The companies that are malleable and recognize this shift early—that understand optionality is the new optimization—will shape the future of retail fashion. Join me in the conversation here. Maggie Barnett, CEO of LVK, is available to discuss: How the triple threat of tariffs, USPS restructuring, and shifting consumer behavior is transforming the fast fashion industry The emergence of "hybrid fashion" as a new retail paradigm balancing trend-driven and timeless pieces Practical strategies for brands to adapt supply chains, implement pre-sale models, and rethink distribution Building customer communities that focus on lifetime value rather than transaction volume How brands can turn this disruption into an opportunity for more sustainable business practices About LVK LVK is a female-led, full-service third-party logistics partner specializing in solving complex fulfillment challenges for omnichannel brands. With a 53% female workforce across seven warehouses in the U.S. and Canada, LVK provides DTC pick-and-pack fulfillment, FBM, B2B fulfillment, and special projects like kitting and returns management. LVK is a subsidiary of ShipHero, a leading Warehouse Management System (WMS) software provider for e-commerce brands and 3PLs. Learn more at View source version on Contacts Media Contact:Carly Bournelvk@ Sign in to access your portfolio
