The global trade landscape faces ongoing volatility, with the potential for significant shifts in trade policies and tariff structures. These potential changes add layers of complexity and cost uncertainty to supply chains worldwide. RXO Managed Transportation customer already possess a strategic advantage, leveraging our cutting-edge technology and deep logistics expertise. However, staying informed and proactively planning for tariff impacts and regulatory fluctuations is crucial for minimizing disruptions, effectively managing import duties, and optimizing your transportation spend in this dynamic regulatory environment.
Here are key considerations for navigating this ever-changing landscape, and how RXO Managed Transportation is equipped to support you:
1. Understand the Impact on Your Specific Goods and Origins
- The Challenge: Tariffs and customs duties are not uniform; they vary significantly based on product classification (HS codes), country of origin, and destination market. It’s critical to identify precisely which of your goods are affected by current regulations and could be impacted by potential future tariff adjustments, calculating the effect on your landed cost.
- RXO’s Solution: Our sophisticated TMS (Transportation Management System), RXO Connect™, enables granular data tracking and analysis. We help you dissect your import/export patterns to pinpoint specific commodities, HS codes, and trade lanes affected by existing or potential tariffs. This facilitates accurate landed cost analysis, ensures import/export compliance, and supports informed, proactive planning.
2. Diversify Your Sourcing and Manufacturing Options
- The Challenge: Over-reliance on a single sourcing region or manufacturing hub can expose your supply chain to significant risk should tariffs be imposed or altered unexpectedly. Building supply chain resilience is key.
- RXO’s Solution: Leveraging our extensive carrier network and powerful data analytics, we assist you in exploring alternative sourcing strategies and manufacturing locations. Our experts analyze different trade lanes, considering total landed cost implications under various tariff scenarios. This helps you evaluate potential shifts towards regional sourcing or other diversification tactics to mitigate risk and potentially lower costs.
3. Negotiate and Renegotiate with Suppliers and Carriers
- The Challenge: Tariffs directly influence the final landed cost impact of goods. Active negotiation with suppliers regarding cost absorption and securing competitive rates from carriers are vital cost mitigation strategies. Furthermore, a clear understanding of Incoterms is essential to define who bears the responsibility and risk associated with tariff payments and customs clearance.
- RXO’s Solution: Our managed transportation services include expert negotiation with carriers. We leverage our significant volume buying power and deep market intelligence to secure optimal rates. We also guide you in evaluating supplier agreements and clarifying Incoterms to ensure responsibilities for import duties are unambiguous, identifying opportunities for supplier collaboration and cost mitigation amidst tariff pressures.
4. Optimize Your Inventory Management
- The Challenge: Tariff uncertainty and potential regulatory changes can create fluctuations in demand, pricing, and lead time variability. Effective inventory optimization is crucial to prevent stockouts or costly overstock situations resulting from these shifts.
- RXO’s Solution: Our data-driven insights help you refine your inventory strategies. By analyzing historical demand, current market conditions, and potential impacts of regulatory changes, we assist in adjusting safety stock levels and demand forecasting models to minimize risk and enhance warehouse efficiency in a fluctuating cost environment.
5. Stay Informed on Regulatory Changes
- The Challenge: The rules governing international trade, including tariff rates and customs regulations, are constantly evolving. Staying current with regulatory updates and understanding potential tariff changes is paramount for uninterrupted operations and customs compliance.
- RXO’s Solution: Our dedicated team of logistics experts actively monitors the global trade regulations landscape. We provide timely trade policy monitoring insights and regulatory updates to our customers, interpreting the implications of new or evolving tariffs and offering guidance on maintaining customs compliance.
6. Embrace Technology for Visibility and Control
- The Challenge: Effectively managing the complexities of tariffs and dynamic trade policies requires real-time supply chain visibility and the agility to adapt quickly.
- RXO’s Solution: Our proprietary TMS platform, RXO Connect™, delivers end-to-end supply chain visibility. This powerful logistics technology allows you to track goods in real-time, anticipate potential delays caused by customs processing or regulatory hurdles, and utilize robust transportation analytics for data-driven decision making and performance optimization.
7. Collaborate with Experts
- The Challenge: Successfully navigating the intricate world of international tariffs and trade requires specialized knowledge.
- RXO’s Solution: As your managed transportation partner, we provide a team of logistics experts and trade compliance specialists. We are well-versed in international trade, customs compliance, and tariff regulations, offering expert guidance on tariff mitigation planning and developing resilient supply chain strategies tailored to the shifting global environment.
RXO is Your Partner in Navigating the Tariff Landscape
The evolving landscape of global tariffs and trade policy dynamics presents significant tariff challenges and requires strategic foresight. By staying informed, leveraging advanced logistics technology, and partnering with a trusted expert like RXO Managed Transportation, you can effectively navigate this complexity, mitigate risks, and maintain an optimized, resilient supply chain.
We are committed to providing our customers with the supply chain optimization tools, risk mitigation strategies, and expertise needed to succeed in today’s demanding global marketplace.
