With the mention of tariffs being more prevalent now than any other time in recent memory, it is important to gain an understanding of the potential impacts tariffs may bring.

At FGN Global Logistics, we keep a pulse on geopolitical happenings and analyze the new challenges and opportunities they may present. With recent discussions of import tariffs, our team has been following as developments have been made and examining the effect these assessments may have on our customers and their trade lanes.

Understanding the Proposed Import Tariffs

The latest round of tariffs includes a levy on imports from Canada, Mexico, and China, targeting products like petroleum and chemicals. While the tariffs for Canada and Mexico have been postponed, tariffs for Chinese imports are scheduled to continue. These tariffs present new challenges and require creative solutions for how we approach logistics, trade routes, and cost management.

Immediate Effects on Freight and Shipping

Surge in Volumes: Similar to past tariff introductions, the market is seeing shippers front-load shipments in attempt to dodge the new costs. This has already led to a noticeable increase in shipping volumes, with ports and logistics networks feeling the pressure. This surge could lead to temporary spikes in freight rates.

Freight Rate Volatility: With demand fluctuating, so too will the rates. We may see a pattern where rates climb rapidly due to high demand on the impacted trade lanes, followed by a stabilization or even a dip as the market adjusts to the new normal.

Long Term Strategic Adjustments

Supply Chain Diversification: If tariffs persist, importers will reanalyze their supply chain to diversify sources or explore alternative shipping routes. These options are certainly not without their challenges, including longer transit times and increased operational complexities.

Impact on Bulk Liquid Logistics: For FGN’s main sector of business, this may mean approaching our customer’s logistics programs with creative solutions to reduce the increased financial burden as much as possible through supply chain diversification.

Environmental and Operational Considerations

Increased Carbon Footprint: One of the industry’s key buzzwords right now is carbon footprint. Working against the current goal to decrease carbon footprint, these tariffs may cause more ships to travel longer distances or use different routes, leading to higher emissions.

Operational Challenges: With new routes come new logistical hurdles. Port congestion, the need for additional infrastructure, and adapting to regulatory differences in different countries may all be side effects of these new tariff policies.

Conclusion

Navigating potential tariffs requires foresight, adaptability, and strategic planning. At FGN Global Logistics, we realize the importance of being nimble, ready to adjust routes, and able to manage costs.

FGN is here to help you navigate these waters, we encourage you to reach out to our team with any logistical needs.