As a business expands and delivers more services and products in new markets to more customers, there comes a time when it must determine whether to outsource its shipping and fulfillment operations. In order to meet customer demand, many of these businesses turn to a third-party logistics (3PL) provider to do just that. Changes in trade policy dramatically effect international consumer demand, which is why tariffs put in place during President Trump’s trade war may increase the benefits to partnering with a 3PL.
3PLs are entities that arrange shipments, as well as manage and provide advice on transportation and transportation-related services for shippers, freight carriers and other related entities. 3PLs include brokers, freight forwarders, rail transporters, consolidators, shippers and air cargo agents. The logistics industry is changing rapidly due to the combination of a de-regulated transportation environment, together with 3PLs embracing the internet, e-commerce and other electronic means to provide their logistics services.[1] These are all natural changes in the evolution of industry. However, the Trump administration’s tariffs, and even just the threat of tariffs and changes to international trade, are dramatically effecting the logistics industry.
Trump started the trade war by levying new taxes on $250 billion worth of Chinese exports. China retaliated both by increasing the duties Americans face and by decreasing the tariffs that confront everyone else.[2] This trade war presents a variety of different global supply chain situations for shippers. In early June, President Trump repeatedly threatened to escalate an already months-long trade war by putting tariffs on nearly all of the remaining Chinese imports that are not already affected by U.S. levies, which include products such as cell phones, computers, clothing and more.[3]
The global trade situation is still developing, and it’s not yet clear if the newest threat of tariffs will be made final. If they do become permanent, companies that prepare now will fare better than those that do not. The uncertainty caused by the Trump administration’s trade war may dramatically effect business, as some companies try to increase trade before new restrictions are put in place. For this reason, it may be the perfect time for your company to partner with a 3PL. A 3PL can help your company navigate international trade by coordinating between customs compliance departments to help shippers minimize the impact of new import tariffs.[4]
3PL Westset Logistics is a superior warehousing, distribution and last mile logistics solutions provider. A partnership with Westset Logistics gives your company the flexibility, trust and accuracy your business deserves. Westset provides Class A facilities which are dedicated to adapt to the peaks and valleys of your business cycles in a safe environment. Our inventory tracking is done on a cloud-based system, which allows our customers, wherever they are in the world, to review their products in real time: inventory levels, shipments of placed orders, and comprehensive reports as needed.
In order for global shippers to weather whatever tariff storms that may be coming, it is crucial to take a long-term view of trade. This may require looking into outsourcing parts of production and distribution operations. Contact Westset Logistics to see how our services can help your company prepare and thrive during this time of international trade uncertainty.
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[1] https://www.marsh.com/us/insights/research/third-party-logistics.html
[2] https://www.theatlantic.com/ideas/archive/2019/06/chinas-two-pronged-trade-war/591877/
[3] https://www.reuters.com/article/us-usa-trade-china-trump/trump-leaves-china-tariff-deadline-open-calls-relationship-testy-idUSKCN1TD24O
[4] https://www.ttnews.com/articles/2018-was-year-extraordinary-growth-3pls