As the trade war continues to become just a memory; a recent decision, made by the US Trade Representative, is allowing hundreds of goods and materials that were previously excluded under China Tariffs Section 301, to be brought back into the country. This move opens the supply chain channels for countless industries across the planet to resume importing specific goods that had been sitting on the sidelines for almost 3 years, back into the US.
These moves toward pre-pandemic levels of operations continue to demonstrate the incredible resilience of the supply chain and echo the strong and positive business sentiment of the importing and exporting industries.
Before the pandemic, the US Trade Representative kept an exhaustive list of exclusions that determined exactly what could and could not enter into the US and, if it could, at what cost. During 2018, this list of exclusions moved to the forefront of importers and business owners’ minds, as the US and China began battling international trade policy. The effects of this time period are still being felt today, reflected in all the empty containers that continue to be sent out of the US.
Although the global pandemic severely crippled any ability to move at normal operating speeds, this whole scenario highlights the need for importers and exporters to continue to think critically about how their goods move through the supply chain.
352 eligible exclusions out of the 549 have been reinstated, meaning many harbors, boats, trucks and rails will likely see increased traffic as these materials and goods begin to be delivered and used again. Having the FTZ warehouse space, the connections to pivot quickly to different harbors, and a solid plan in place for when supply chain disruption occurs can often be the difference between thriving through changes or falling behind competitively during difficult times. Without the proper 4PL partner in place, this new influx of products back into the supply chain could lead to hasty and poor decisions that can erode profits just as quickly as mounting CBP fees and unexpected tariffs. Foreign Trade Zones give importers the control they need to manage how and when goods are brought onto US soil. Thereby, paying the tariffs, taxes and fees required by the Customs and Border Protection (CBP) on a deferred schedule oftentimes eliminates these fees and tariffs altogether.
Businesses have used FTZs for decades, but to be able to manage inventory properly and get ahead of anticipated supply chain slowdowns, an importer needs a 4th Party Logistics (4PL) operator that has the resources, relationships, and technology to ensure temporary slowdowns don’t interrupt daily operations.
A 4PL operator is a single point of contact for importers that will help them with:
- Freight Sourcing | Logistic Strategy
- Consultancy | Business planning | Project Management
- Transportation Cost Analysis | Utilization Efficiency Analysis | Performance Analysis
- Geographically Based Supplier Coordination
- Design and Analysis of Supply Chain Network
- Deep Inventory Management and Strategy
The US Trade Representative will likely continue to ease these exclusions, allowing more and more goods to flow back into the US over time. This is likely to put more pressure on US supply chains and ports of entry. It’s a good problem to have and it’s one that importers and businesses would quickly overcome with a 4PL partner like ITC Diligence International, Inc.
Be prepared for slowdowns and fractures in the supply chain. Predictions are rarely correct on how global events will affect the United States’ ability to bring in necessary goods, but a common trend is often congestion. The problem of congestion can be solved relatively easily when partnering with a 4PL operator like ITC Diligence International, Inc.
ITC Diligence International, Inc. has harbored Foreign Trade Zone relationships and 4PL strategy for 30+ years. Over that time, the industry has loudly proclaimed that the 4PL program is needed and wanted with experts like ITC Diligence International, Inc. leading the example on how it is done correctly.
Call ITC Diligence International, Inc. today to see how a 4PL strategy will directly affect your company’s ability to move products smoother along the supply chain and to their final destination.