The Trump administration announced several rounds of tariffs last spring and as they become formalized, supply chains across the U.S. are feeling the effects. The administration recently implemented a 10 percent tariff on $200 billion worth of Chinese goods, which began on September 21, and plans to apply a 25 percent tariff on $50 billion worth of Chinese imports on March 1, 2019.1
What Markets Will the Tariffs Affect?
The Port of Los Angeles, the nation’s largest container port, expects the tariffs could affect up to 15 percent of all cargo it handles.2 The $200 billion worth of Chinese commodities that are subject to the tariffs include aluminum and various metals, various food items, mineral fuels and oils, inorganic chemicals, textiles, vehicles and parts, and more.3 However, the new tariffs will indirectly affect every industry due to tightened capacity, increasing supply chain costs, and longer production lead times.4
The Effect on Supply Chains
Shippers Rush to Import Goods, Leading to Tighter Capacity
Exporters are rushing to ship cargo before the new tariff is implemented on January 1 to save costs, and therefore, ports are experiencing much higher than normal freight shipment rates.11 This September, the Port of Los Angeles imported 801,264 TEUs,12 compared to last September at 763,784 TEUs13 – a 4.91 percent increase due to the new tariffs.
Right now, it’s important to secure reliable end-to-end solutions to ensure capacity. Now is the time for shippers to work closely with a strategic 3PL. By utilizing 3PL services during these unprecedented times, shippers will be able to utilize their assets as an extension of their own.