In a recent webinar, we sat with Freight Right CEO Robert Khachatryan to talk about – what else – tariffs. Robert has been seeing firsthand how the nonstop turbulence has been affecting SMBs, from planning to pricing to common difficulties. We got into the current situation, how SMBs are managing, and how freight forwarders can help.
Read on for our top takeaways, or scroll to the end to watch the video.
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Uncertainty – and more uncertainty
The first thing Robert emphasized is how uncertain and confusing the constantly changing landscape is. And it’s the uncertainty, maybe even more than the high costs, that makes the situation so difficult.
In a “normal” year (2019 anyone?) it’s possible to forecast costs and plan logistics with some degree of confidence. But rapid tariff shifts – and now legal battles – have made that impossible. For SMBs, this unpredictability translates into real planning challenges, whether they ship directly to customers or work with large retailers like Walmart, which set their product schedules up to a year out.
With factories typically requiring three to five weeks to manufacture goods, aligning shipments with tariff rates becomes a strategic guessing game. Missing the mark can be massively costly, but getting it right feels like a matter of luck.
One near-certainty: tariffs are here to stay for a while
Even with all the back and forth about which tariffs apply to which countries when, Robert stressed that it does seem clear we will be dealing with tariffs for the foreseeable future.
One example: recent rulings by the Court of International Trade have declared some tariffs illegal. However, the U.S. government swiftly appealed these decisions, resulting in a stay on the tariffs while appeals work their way through the courts. In other words: the tariffs are still in effect.
And even if the legal challenges work, there are other means to put tariffs into effect. The upshot is that It’s likely the administration will find a way to continue imposing heavy tariffs.
Supply chain agility has become a crucial strategy
If you’ve been importing in the last year, you’re well aware that the seasonal patterns that used to govern shipping schedules have been replaced almost entirely by tariff anticipation and effects. Supply chain planning has become like a high-stakes game of chess where agility has become more crucial than ever.
In some cases, businesses race against the clock to move as much product as possible during temporary tariff pauses. Others may choose to absorb potentially higher inventory costs stateside to avoid future tariff hikes. Many SMBs have chosen alternate shipping routes and modes to ensure products clear customs before tariff rates increase. Everyone is dealing with a delicate balance of timing and costs.
The flexible problem-solving that started back in Covid, and continued through the Red Sea Crisis, has become more important than ever. Robert predicts that agility could represent a permanent shift in how SMBs approach their supply chains, with flexibility and swift decision-making becoming key components of a resilient business strategy.
Bonded warehouses have entered the chat
One shift Robert noted: the surge in demand for bonded warehouses. A bonded warehouse is a storage facility that allows companies to defer paying duties and taxes until the products are ready to enter the market. It’s essentially a customs-approved holding pattern where goods can wait tariff-free.
Historically, SMBs have not commonly used bonded warehouses for several reasons. First, they involve an additional layer of complexity and bureaucracy which may not be feasible for smaller teams. Additionally, in more stable tariff environments, most businesses prefer direct clearance to expedite cash flow and reduce storage costs.
But now, bonded warehouses have quickly become a valuable tool for managing costs. The ability to essentially “pause” customs duties offers a buffer, which can save companies significant sums, especially when dealing with high volumes or high-value goods.
Robert also noted that the increased demand has led to a sharp rise in bonded storage rates – up to 500% in some areas – due to limited availability. That’s how crucial this strategy has become. And it’s likely to become even more central, with companies beginning to integrate bonded storage more permanently into their logistics strategies.
The importance of reliable logistics partners
In such a volatile environment, a reliable freight forwarder is more important than ever.
Freight forwarders can help SMBs manage tariffs by staying on top of regulatory changes, offering route and mode guidance, and assistance in using strategies like bonded warehouses.
Your freight forwarder is there to help you, so reach out to strategize. Tariff changes are hard enough – you don’t have to manage them alone.
An agile freight forwarder is more important than ever. It’s not just about managing logistics costs – it’s about helping importers minimize tariffs, which can be a massive expense.
– Robert Khachatryan, CEO, Freight Right
Strategic inventory planning
With traditional peak seasons like back-to-school and holidays approaching, Robert advises businesses to aim to increase their inventory stateside. This involves securing as much inventory as possible in anticipation of possible tariff hikes and climbing shipping rates. He noted that even if tariffs are canceled, freight rates are increasing so getting goods in sooner where possible could help.
Leveraging technology
For SMBs, tools like the Freightos Marketplace can help manage tariff chaos. For one thing, the pre-vetted network of freight forwarders offers easy access to trustworthy partners. Features like guaranteed capacity mean your shipments are prioritized, no matter how small your business, which means avoiding potential delays that could incur additional costs if tariffs change. And our customer success team is always there for troubleshooting.
Check out the video below to watch the full conversation:
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