The Tariff Takeaway: It’s Time to Stress-Test Your Supply Chain

After announcing earlier this month that 10% tariffs would go into effect Sept. 1 on $300 billion in Chinese imports, the U.S. reversed course this week and said duties would be delayed until December on certain products. The excluded items include cell phones, laptops, footwear and toys. In addition, other items will be excluded altogether because of health, safety, national security or “other” factors. While the latest news gives some businesses a reprieve, the continued uncertainty – and ongoing tariffs on many Chinese products – have left businesses struggling to mitigate the impact to their operations and their bottom lines.

To deal with the continued fallout, many shippers are exploring ways to reshore goods to other countries. In a recent fashion industry survey, 80% of respondents said they planned to cut back on production in China. But moving manufacturing operations comes with its own disruptions, putting added pressure on already stressed supply chains.

The road to optimization

Whether it’s blanked sailings during peak season, West Coast port strikes or the ongoing drumbeat of tariffs, anything that can go wrong in logistics likely will. Staying competitive in this complex environment requires not just addressing issues as they occur, but also anticipating and planning for whatever may lie ahead.

“It’s been very reactive,” AGL CEO Jon Slangerup recently said of the shipper response to tariffs during the Journal of Commerce Gulf Shipping Conference. “I think everyone is just coming to grips with how they are going to deal with this long-term.”

So how can shippers build supply chains that are more responsive – and predictive – in the face of disruptions? It starts with analyzing your processes, tools and people to find vulnerabilities and opportunities for improvement. Here are three steps to help your supply chain stay strong when disruptions strike.

  • Map out your processes. While many businesses are looking to technology to improve supply chain performance, new solutions are destined to fall short if you don’t understand your problem first. Take the time to map every mode, carrier and handoff point across your supply chain. Many businesses skip this step, but it’s the best way to uncover bottlenecks, find new efficiencies and tailor your technology around your processes.
  • Adopt the right technology. If you’re still running your supply chain on spreadsheets, you’re not alone: 13% of firms still rely exclusively on Excel for supply chain management, according to American Shipper. But to stay resilient amid supply chain stressors, businesses need a more sophisticated approach. A centralized platform can help you gain end-to-end visibility across all shipments, allowing you to pivot quickly when needed and spot trends that can impact performance.
  • Build a high-functioning team. The logistics industry is built on relationships, which is why it pays to cultivate strong ones. A supply chain partner with a deep network can help you navigate hiccups more easily, whether you need spot capacity fast or want to explore alternative production sites.

Supply chain disruptions are inevitable, but they don’t always have to turn into supply chain crises. A proactive approach is the first step toward supply chain optimization, helping businesses handle whatever comes next.