May 14, 2019

Retailers turn to trade advisors to navigate impact of China tariffs

C.H. Robinson, Oracle Corp. offer supply chain planning, global trade management services.

By Ben Ames

The Trump administration's escalating trade war with China quickly triggered sharp warnings from retailers this week about the negative impacts of rising tariffs. But even as those regulations begin to bite global trade, they may also be increasing demand for providers of certain trade compliance services and supply chain management software.

Both the National Retail Federation (NRF) and the American Apparel & Footwear Association (AAFA) issued statements Monday condemning the White House's move on May 10 to boost tariffs on approximately $300 billion worth of U.S. imports from China, saying the strategy "will jeopardize American jobs and increase costs for consumers," and calling it "a self-inflicted wound that will be catastrophic for the nation's economy."

In a move to provide guidance for companies wrangling with those pressing issues, logistics companies like the freight broker and third-party logistics provider (3PL) C.H. Robinson Worldwide Inc. and enterprise software provider Oracle Corp. said today that their services could help users handle the impact of the tariffs.

Previous rounds of tariffs have already impacted cash flows for logistics providers in the past six months, according to Eden Prairie, Minn.-based C.H. Robinson. The higher tariffs have crimped income for U.S. exporters (especially in agricultural products) who have seen their China sales drop, and they have triggered a jump in cash consumption for U.S. importers who have to come up with extra money to pay increased duty payments at the border, C.H. Robinson's director for government affairs, Jason Craig, wrote in a blog today.

"Uncertainty abounds; current policies and rules (in addition to new ones) may or may not be in effect six months, one year, or five years from now. Therefore, for many businesses, scenario planning increasingly appears to be essential," Craig wrote in the blog. As businesses grapple with the shifting impacts of the tariffs, C.H. Robinson says it can provide that scenario planning, using its broad market perspective "to see end-to-end impacts and help manage our customers' complete supply chains in unpredictable times."

The company advises its clients to bring their transportation provider and customs broker into their planning conversations, in order to assess the transportation costs of new lanes, new suppliers, and shifting regulatory and compliance concerns. That approach can help companies to mitigate risk and find opportunity by applying close collaboration, deep business intelligence, and proactive planning, C.H. Robinson said.

Likewise, Redwood Shores, Calif.-based Oracle said today that its Supply Chain Management (SCM) Cloud could help users improve responsiveness, optimize shipments and asset utilization, and improve productivity. Oracle said that a series of logistics management updates to the platform includes a new logistics network modeling product and enhanced transportation management and global trade management capabilities.

"With global trade policies in flux, organizations of all sizes are struggling to make sense of changing regulations and unstable global duty rates," Derek Gittoes, Oracle's vice president for SCM Product Strategy, said in a release. "To help our customers combat global trade instability and improve efficiency, while lowering costs and minimizing risk, we have introduced a series of updates.

Those updates enable customers to better support trade compliance and customs processes, such as country of origin management, or certificate management associated with trade agreements, allowing them to practice more effective use of preferential trade agreements, the company said.

"Disruptions due to customer demand volatility, new product introductions, government regulation changes, and a host of other factors, leave supply chain professionals struggling to adapt," Gittoes said. "To eliminate this guessing game of how best to respond, we are giving our customers the insights they need to improve decision making and increase efficiency of logistics operations."

About the Author

Ben Ames
Senior Editor
Ben Ames has spent 20 years as a journalist since starting out as a daily newspaper reporter in Pennsylvania in 1995. From 1999 forward, he has focused on business and technology reporting for a number of trade journals, beginning when he joined Design News and Modern Materials Handling magazines. Ames is author of the trail guide "Hiking Massachusetts" and is a graduate of the Columbia School of Journalism.

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