The Impact of Tariffs

November 26th, 2018

By Richard McDuffie

The series of tariffs implemented by our current administration are prompting supply chain disruptions from coast to coast. 

Historically, summer months have experienced a routine slack volume period in the industry; however, the administration’s recent rounds of tariffs resulted in a period of historically high growth with July as a peak versus the typically anticipated month of October.

Discussions surrounding a 25 percent tariff, to be imposed by the Trump administration on imports on China effective January 1, will further affect shipping patterns and apply pressure to the intermodal supply chain, particularly warehousing.

The trade dispute applies pressure to our Memphis headquarters market from multiple perspectives, but our intermodal milestone management offerings are equipped to navigate and subdue such pressures. 

Memphis logistic companies bring in products directly from abroad as well as goods unloaded at the American seaports, which are then distributed throughout the Southeast and the nation. Thousands of logistics jobs were created across Memphis over the last two decades as a result of increased imports. About $3.5 billion of foreign-made goods was landed in Memphis in 2017, including more than 50 Chinese products worth $617 million now facing higher tariffs, according to the federal trade data.

Therefore, the uncertainties of tariffs have longer-term implications for the industry as cargo owners and carriers attempt to plan their sourcing strategies years into the future.

While higher transportation rates due to tight carrier capacity are a concern, today’s especially tight warehouse environment is a priority to navigate.

We at Dunavant are committed to conscientious supply-chain strategy to avoid pain points and secure capacity for the traditional peak season this winter and next spring. In this state of transition, pre-planning must take a back seat to experience and leadership in the category.

Richard McDuffie is COO of Dunavant, a Memphis-based global logistics company.