Navigating Tariff Uncertainty with Airfreight

03 Nov Navigating Tariff Uncertainty with Airfreight

If there’s anything to know from the last few weeks in international freight, it’s that tariff changes can be anything but straightforward. After initially announcing an additional 10% tariff on $300 billion worth of goods imported from China, which was set to take effect on 1 September and 15 December, the White House followed up with a flurry of rate adjustments. Tariffs coming into effect on October 1 will now be 30% instead of 25%, while tariffs on September 1 increased from 10% to 15%. A little confused, huh? You’re not the only one here.

There is one thing to be certain regarding tariff increases and deadlines— landed prices could see increases as high as tens of thousands of dollars, and there will be a scramble of businesses to import goods before more tariffs take effect. In fact, transportation can become a jigsaw puzzle as companies search for the easiest, most cost-effective way to get a commodity to the United States.

With so many ebbs and flows in response to trade uncertainties, how can you navigate on-going tariffs and continuing volatility?

Awareness of the situation As tariffs and market volatility become more unpredictable, it may be particularly difficult to understand the value of the service, particularly in terms of airfreight pricing. Price issues, especially attenuating price volatility and partner relationships to protect supply chains, can become monumental for businesses of all sizes. It is important to note that airfreight prices tend to reflect on a single moment in time, making them particularly difficult to plan. In addition, lack of transparency in overall pricing and transit times can create even more uncertainty across the supply chain.

To help mitigate this confusion, there are a few key questions that need to be asked about pricing, including: is my price fixed or floating? What carries the risk of price and service? What’s the real transit time for me? How are additional deliveries and spot pricing supported?

Answering these questions will help ensure that you get a realistic estimate of air freight costs and schedules in especially volatile market circumstances.

Reduce your risk mitigation strategies are based on the key tenet: trust. The first step towards reducing risk in a volatile market is partnering with supply chain partners who offer clear quotes and are willing to share price risk. Nonetheless, in some situations, Supply Chain Partners can express tariff-related concerns and work to develop creative solutions to minimise tariff exposure.

Case in point, Prime Freight partnered with our airfreight team to arrange a flight arriving two hours earlier on September 1—giving customers the chance to save thousands of dollars on tariffs. Consult with the forwarder to set the parameters for your partnership and agree to ensure that the quality of the service continues to move forward.

“Price is the most critical factor when choosing an air freight strategy, but it can lead to higher costs overall,” says Tony Crisafulli, Sr. Director of Global Bid Management at Prime Freight. “Working with a forwarder who can articulate processes and is willing to work as a strategic partner will help ensure short-and long-term success.” To learn more about strategies to minimise or reduce can supply chain costs, please contact Prime Freight today!

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