Trade
September 4, 2019 International Shipping

The Importance of Experience During Trade Uncertainty

At the beginning of 2019, logistics and trade industry experts warned about the uncertainty that this year could hold. Now, more than half-way through the year, the certainty about many factors that affect global trade and logistics is still here.

The factors contributing to uncertainty include Britain leaving the European Union and new borders, tariffs on goods coming and going to China, and interest rate changes. 

However, this uncertainty really just means that the global logistics and trade industry needs to pivot quickly. Understanding what changes may occur and when they will occur is key.

Then, we can adapt so shipments continue to arrive on time in the manner customers expect. With over 25 years in the logistics industry, AFP Global Logistics has experienced many periods of uncertainty.

Our experts and global partners allow us to create a global network of logistics services. Here are three challenges the global logistics industry may face through the end of the year, and how experience can create more certainty. 

Tariffs on Imports and Exports to China 

The White House recently announced the current tariffs on Chinese goods coming to the U.S. will increase from 25% to 30% on October 1. These tariffs already affect $250 billion worth of goods.

The U.S. is also set to place new tariffs on an additional $300 billion worth of Chinese goods in September and December. The U.S. Trade Representative changed some tariffs to have less of an impact on holiday shopping this fall. 

Some consumer goods Companies and economists often worry about how these tariffs will change the prices of goods for consumers. However, for logistics management companies, the uncertainty of when and how certain goods will be taxed means uncertainty in supply chain management and planning. 

One likely result will be that U.S. companies will have to source goods from multiple countries. “Sourcing from multiple countries requires increased transportation requirements across trade lanes and from ports to warehouses,” Brittain Ladd, a global supply chain and strategy consultant tells Logistics Management.

In addition to a strong internal team, AFP Global Logistics includes a global network of almost 10,000 partners. This allows us to quickly utilize different shipping methods, from air to sea to rail. The uncertainty in timing of these new tariffs can also be ameliorated by expedited shipping and warehousing goods until retailers and consumers need them. 

Talk of a Looming Recession

During the later part of this summer, many news outlets began reporting on signs of a recession or economic downturn to come. While those media outlets claim various indicators suggested that the U.S. economy may not grow, President Donald Trump disagrees, “I don’t think we’re having a recession. We’re doing tremendously well.” 

A mid-year cut to the federal interest rate, reductions in certain taxes, or other economic stimuli may stave off a contracting economy. Furthermore, consumer spending has increased.

This means that more consumer goods are currently moving from shelves and warehouses. As the debate continues, everyone is waiting to see if and when a recession will happen.

One of the best ways to deal with this uncertainty is by having close relationships with carriers and partners. That way, logistics companies can communicate if and when delays or slow downs may occur. With over two decades of experience, we’ve developed close relationships with our partners.

AFP Global Logistics understands the value of dependable communication and personalized customer service. These are the practices that have allowed us to succeed and grow, even if the face of economic uncertainty. 

Rising Costs of Shipping

In 2018, various factors led to an increase of almost 12% in U.S. logistics costs, according to Logistics Management. For example, even with the debate of a looming recession, labor markets are tight and wage growth went up.

The difficulty of last-mile shipping logistics, increases in small warehouse costs, and fuel costs have contributed to the increase. Although some of these trends have continued into 2019, the strong economy has allowed the shipping and logistics industry to continue to grow. 

With our vast network and multi-modal abilities for shipping, we can work with clients to figure out the best-value shipping method. Technologies can also help reduce costs. More fuel efficient trucks and methods of transport reduce fuel costs. We also use tracking technologies to ensure efficiency in our shipping. 

Contact us today for more information on our logistics services. Call 410.590.1234 (toll-free 800.274.1237), email us at quotes@afplus.com, or fill out our contact form. You can stay up to date with the latest from AFP Global Logistics on LinkedIn, Facebook, Twitter, Google+ and Pinterest.

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