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Yahoo
8 hours ago
- Business
- Yahoo
Tariffs, de minimis changes spark air cargo capacity shifts
This story was originally published on Supply Chain Dive. To receive daily news and insights, subscribe to our free daily Supply Chain Dive newsletter. As airfreight volume plummets, carriers are redeploying capacity to keep pace with shippers' moves to mitigate tariffs, experts told Supply Chain Dive. Since the Trump administration announced its reciprocal tariffs in April, China-U.S. cargo volumes dropped by up to 60%, Seko Logistics VP of Global Airfreight Laurent Deneubourg told Supply Chain Dive. Tariffs have impacted e-commerce bookings in particular, which typically account for up to 60% of China-U.S. shipments and 20% of global air cargo. E-commerce bookings dropped by 50% in May. Besides e-commerce, the tariff changes have had the broadest impact on automotive volumes, fast fashion, consumer electronics and toys, which are goods often shipped via air, experts said. The May 2 end of the de minimis exemption for imports from China and Hong Kong also resulted in falling volumes and excess air freight capacity, Joe Kronenberger, Geodis SVP of airfreight product in the Americas region, told Supply Chain Dive. With volumes down — especially as de minimis items alone accounted for 50% of air freight volumes — shippers are canceling block space agreements and charters, Deneubourg said. The air cargo sector is currently facing an estimated $22 billion revenue loss over the next three years as it battles trade uncertainty. To accommodate the changes, carriers are redeploying capacity to alternative routes, including Southeast Asia to the U.S., Kronenberger said. 'While routes aren't changing completely, capacity is shifting as demand fluctuates,' he said. Kronenberger added that cargo volumes saw an uptick since the 90-day pause on tariffs was announced. The increase has helped to stabilize previously low rates and fill some of that excess airfreight capacity out of China. For the week of May 27, air freight rates from China to North America were down 7% week over week to $5.14 per kilogram, Freightos reported. Rates were at their lowest level since March. Although shippers are still using Transpacific routes, the countries of origin for the flights are changing as more companies look to push production away from China as a buffer against U.S. tariff policies, Kronenberger said. But moving procurement networks is no easy task. 'Moving production and redefining company ownership to align with a new country of origin takes time, but we're seeing that clients are willing to reshape their strategies if it means creating a more resilient supply chain in the face of continued regulatory changes,' Kronenberger said. Changing trade regulations have made it difficult to forecast the next few months. Kronenberger said many of Geodis' clients are 'tariff shopping,' or looking for alternative ways to mitigate tariff impacts. For some, this might look like moving production away from China or opting to use bonded warehouses to hold cargo upon arrival. 'In consumer technology especially, we've seen some of our clients shift production out of China into Southeast Asian countries or India,' he said. 'In these cases, some have already notified us that up to half of what they're currently shipping out of China is going to start shipping from other countries.' Shippers continue to struggle to understand how the various tariff provisions are stacking up or canceling out, said Brian Bourke, Seko's global chief commercial officer. The confusion has led to ongoing changes in scenario planning, which can freeze business decisions, he warned. 'Shippers are telling us they're taking a 'wait and see' approach—continuing to cancel orders from China,' Bourke said. 'But the real question is: what happens when the safety stock they've been relying on runs out?' Recommended Reading De minimis' end to trigger air cargo turbulence Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
a day ago
- Business
- Yahoo
Guitar Center targets optimized inventory planning, visibility
This story was originally published on Supply Chain Dive. To receive daily news and insights, subscribe to our free daily Supply Chain Dive newsletter. Guitar Center is seeking greater inventory visibility and management to improve its store replenishment planning processes by minimizing stockouts and overstock, per a May 12 press release. The retailer will use specific modules in Relex Solution's forecasting and replenishment product ahead of this holiday season to manage distribution centers to store purchase order and inventory allocations, Matt Tull, VP of merchandising and inventory management support at Guitar Center, told Supply Chain Dive. Some of the technology tools Guitar Center has previously used were rigid in design, making it difficult for the retailer to adapt or add metrics to assist with decision-making, Tull said. The inflexibility proved especially challenging in the face of macro-economic events like the COVID-19 pandemic and recent tariff hikes, he added. Guitar Center aims to launch the project prior to the holiday season, Tull said. While the retailer did have the option to roll out the software in phases, Guitar Center decided against it as a phased approach would require a significant amount of integration and code changes. 'More than likely, we'll take a crawl, walk, run approach, starting with low-impact areas when we go live and gradually ramp up to more significant categories as we evaluate the deployment and expand it out to include additional categories,' Tull said. 'The intent is to ramp up within hours or a few days to be fully live.' Guitar Center has more than 300 retail locations and operates four enterprise distribution centers located in California, Missouri, Indiana and Maryland, in addition to a supporting network of hubs across the U.S., according to the company's website. Other companies have also tapped Relex products to help unify and optimize supply chain operations. Last year, convenience store chain Wesco integrated technology from the service provider to help automate its supply chain and retail planning processes. Meanwhile, United Natural Foods partnered with Relex to improve its demand planning and procurement operations. This story was first published in our Operations Weekly newsletter. Sign up here. Recommended Reading Wesco taps Relex to upgrade supply chain operations Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
6 days ago
- Business
- Yahoo
Canada Goose: Vertical manufacturing an edge against tariffs
This story was originally published on Supply Chain Dive. To receive daily news and insights, subscribe to our free daily Supply Chain Dive newsletter. Canada Goose is using its vertical manufacturing capabilities to adjust production to demand in a market characterized by tariff uncertainty, executives said during a May 21 earnings call. The luxury retailer manufactured over 90% of its down-filled outerwear in the company's facilities in Canada in fiscal year 2025, per an SEC filing. By coordinating its in-house manufacturing with third-party suppliers, Canada Goose was able to adjust efficiently to customer demand. 'Our vertical manufacturing is a real source of competitive advantage for us,' Beth Clymer, president and COO, said. 'We are currently leveraging this capability more than we ever have before, which is especially valuable in today's dynamic market.' Canada Goose owns and controls its entire production process, from raw materials to finished products, allowing for sourcing adjustments to mitigate tariff disruptions. With production primarily based in Canada, the brand is largely unaffected by tariffs due to the United States-Mexico-Canada Agreement, Clymer said. In the last fiscal quarter, however, tariff impacts were primarily felt in Canada Goose's European production, which makes roughly 20% of the company's products. Many brand manufacturers with more global production networks have scrambled to reduce manufacturing exposure to China to avoid hefty U.S. tariffs. SharkNinja, for instance, plans to move nearly all its manufacturing to Southeast Asia by the end of the year. Meanwhile, Colgate-Palmolive is reducing its reliance on suppliers in China while increasing the number of its U.S. manufacturing facilities. But Canada Goose hasn't fully escaped the effects of tariffs. The company decided not to release a financial forecast for fiscal 2026 because of jittery consumers in a changing economy. 'The pull of the guide and the decision not to provide an outlook for the year is entirely around what we see as a fairly uncertain consumer environment around the world,' CFO Neil Bowden told analysts. 'There's no doubt that the trade environment is choppy.' This story was first published in our Procurement Weekly newsletter. Sign up here.
Yahoo
7 days ago
- Business
- Yahoo
US court blocks Trump's sweeping tariffs
This story was originally published on Supply Chain Dive. To receive daily news and insights, subscribe to our free daily Supply Chain Dive newsletter. A federal court on Wednesday blocked many of President Donald Trump's sweeping tariff executive orders, saying the president overstepped his use of emergency powers to enact them. The United States Court of International Trade issued an injunction on four executive orders that called upon various national emergencies to enact tariffs on Canada, China and Mexico, and a 10% global tariff plus additional reciprocal tariffs. The injunction called for the government to stop any operations related to those tariff orders immediately, and to issue administrative notices on the permanent injunction within 10 days. Lawyers representing the Trump administration quickly appealed the decision to the U.S. Court of Appeals for the Federal Circuit in Washington, D.C., and have 14 days to file additional documents supporting their case. The injunction came as the result of several legal cases wherein a few small businesses and several U.S. states filed separate but similar petitions to halt the tariffs, arguing their imposition via the International Emergency Economic Powers Act overstepped presidential powers. The court eventually sided with the plaintiffs and ruled it was appropriate to block the executive orders that imposed the tariffs as a result. 'The Worldwide and Retaliatory Tariff Orders exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs,' the court panel's opinion reads. 'The Trafficking Tariffs fail because they do not deal with the threats set forth in those orders.' Trump is not the first president to have used emergency powers to impose tariffs, per an April report by the Congressional Research Service, although his authority to do so was always in question. In 1971, President Richard Nixon imposed a global 10% tariff to address a national emergency related to the country's economic position. However, Trump's use of emergency powers is different in a few ways. First, the president has used emergency powers more broadly, claiming crises on immigration, fentanyl trafficking, and disproportionate trade relationships as distinct emergencies justifying new tariffs. Second, the report notes the law Nixon used was since reformed into the IEEPA — the law used by Trump — and that, therefore, the IEEPA's use for tariffs had so far been legally untested. "IEEPA authorizes the President to 'regulate' a variety of international economic transactions, including imports. Whether 'regulate' includes the power to impose a tariff, and the scale and scope of what tariffs might be authorized under the statute, are open questions as no President has previously used IEEPA to impose tariffs," Christopher A. Casey, analyst in International Trade and Finance for the Congressional Research Service, wrote in the report. The U.S. Court of International Trade was established by the Constitution and has nationwide jurisdiction over civil actions arising out of customs and trade laws in the country, according to the court's website. A federal appeals court can review its decisions. However, several Trump administration officials put out statements criticizing the courts' action to halt tariffs. White House Deputy Chief of Staff Stephen Miller, for example, said on X: 'The judicial coup is out of control.' And, in a statement provided to several media outlets, White House spokesperson Kush Desai said: 'It is not for unelected judges to decide how to properly address a national emergency." Editor's note: This is a developing story and will be updated. Recommended Reading Trump's tariffs: Tracking the status of international trade actions
Yahoo
28-05-2025
- Business
- Yahoo
Amazon readies Premium Shipping changes in June
This story was originally published on Supply Chain Dive. To receive daily news and insights, subscribe to our free daily Supply Chain Dive newsletter. Amazon sellers offering Premium Shipping options will have to adjust to new on-time delivery requirements starting next month, according to an announcement May 12. Premium Shipping enables sellers to provide one-day and two-day delivery to shoppers using their own shipping methods, rather than Amazon's in-house network. Sellers need to maintain an on-time delivery rate of 97%, evaluated on a 30-day basis, to stay eligible. On June 29, the delivery requirement will drop to 93.5% and performance will be reviewed on a weekly basis. Shippers that don't meet a particular Premium Shipping parameter will receive two warnings before being booted from the program on the third infraction for that requirement. Although Amazon softened on-time delivery targets for Premium Shipping, sellers in the program have clear incentive to maintain strong performance. "Under the new cadence, a single bad week can put you on notice, and three such weeks in a month spells immediate removal from Premium Shipping," Indy Pereria, head of people operations at fulfillment provider Cahoot, said in an analysis of the changes. "You'll need more consistent performance throughout each month, not just a healthy 30-day aggregate." Maintaining a high level of performance could entail using reliable carriers for Premium Shipping and collaborating with them effectively. Setting clear expectations, providing volume forecasts and having regular conversations on performance are among the ways shippers and carriers can work together to ensure strong service, experts said during a May 7 Supply Chain Dive and Retail Dive event. Premium Shipping sellers must use UPS, the U.S. Postal Service, FedEx or OnTrac for the bulk of one-day deliveries and all two-day deliveries, according to Amazon's website. Amazon also plans to adjust various Seller Fulfilled Prime requirements on June 29. The program allows sellers to independently handle fulfillment and still be able to display Amazon's coveted Prime badge on their products. One change will be Amazon's implementation of minimum shipment requirements for Seller Fulfilled Prime users. Sellers who have not shipped at least 100 packages through the program per month, or have not shipped consistently through the month, will face a daily limit on maximum Prime order volume. That limit will end once the 100-package threshold is reached and Prime packages are shipped consistently. "We have observed sellers are best equipped to meet these requirements when they are frequently fulfilling Seller Fulfilled Prime orders, and as such we expect you to consistently demonstrate that you can meet all Seller Fulfilled Prime program requirements regularly," Amazon said on its website. Editor's note: This story was first published in our Logistics Weekly newsletter. Sign up here. Recommended Reading Amazon reopens Seller Fulfilled Prime enrollment, nixes planned fee Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
