Navigating Tariff Changes: Practical Strategies for 3PL Warehouse Operators

Tariff changes are dominating headlines. From the complexities of de minimis rule changes on e-commerce fulfillment to warehouse management and transport delays, these changes aren't just headlines; they're impacting daily operations, and are top of mind for future planning.

Along with the pains of these changes, the logistics industry is also seeing opportunities for 3PL operators prepared to adapt. For e-commerce fulfillment and warehouse operators, this can mean proactively optimizing operations, leveraging technology, and strengthening client partnerships. In this blog, we'll explore actionable strategies to help you understand and navigate the current changes for success.

What is happening with recent tariff changes? 

Global trade and tariff policy is a complex topic, but here are some of the recent changes in a nutshell. 

• There have been escalations in USA tariffs on goods imported from China, particularly targeting sectors like consumer electronics. 
• New tariffs have been imposed on imports from Canada and Mexico, affecting a wide range of goods, and there have been increases in tariffs on steel and aluminum imports from various countries, including Australia. 
• Furthermore, changes to the "de minimis" trade exemption for USA, which relates to duty-free imports of lower-value goods, have also been implemented, which is expected to see a significant impact on e-commerce trade and operations.

In this blog, we’ll help you navigate these challenges with confidence and clarity.

Understanding the impact beyond direct costs

Tariffs aren't just about increased import fees. They affect the entire flow of goods, and the recently announced changes may impact multiple areas and industries, including:

• Inventory Planning and fluctuating demand 
• Warehouse space resourcing 
• Operational costs
• Shipping times and delays
• E-commerce import and storage 

Potential tariff impact on e-commerce 3PLs

Let’s look a little deeper at the "de minimis" rule. This global trade rule in the U.S. allowed for certain low-value goods to be imported duty-free and with minimal customs procedures. Recent changes to this rule have significant implications for e-commerce businesses and the 3PLs that support them. 

“Under the proposed new rule, merchandise subject to specific trade and national security actions would no longer qualify for the de minimis exemption; and certain shipments claiming this exemption will be required to provide the 10-digit Harmonized Tariff Schedule of the United States (HTSUS) classification for the imported low-value merchandise.” (see more on the US Customs website here).

Again, in a nutshell, these rules set a threshold value for imported goods below which duties and taxes are not collected. This simplifies and speeds up the import process, particularly for small, individual shipments. The recent changes may impact certain e-commerce good imports with increased costs due to duties and taxes on previously exempt goods. 

Businesses that specialize in selling low-value, high-volume goods (e.g., small electronics, apparel, and accessories) are likely to be particularly affected.

It is speculated that this may result in bulk shipping, requiring changes to onshoring warehouse and storage, increased fees passed onto end consumers, or a shift in supply chain resourcing (such as ABB’s recent US$120m investment announcement to deliver onshore manufacturing) from previously used offshore partners. Note, if you’re thinking of upheaving your supply chain altogether, here are some risks to consider before pulling the plug. 

The good news is, there are a number of tactics you can start now to help you prepare your business and customer base for change!

“At CartonCloud, we live and breathe our customer success, and our flexible software is designed to give all users the ability to stay agile and navigate change to maximize new opportunities,” said CartonCloud CEO Shaun Hagen.  

‍What can you do to prepare your 3PL?

While global changes and the industry ripple effects are very much out of individual control, there are a range of things you can do to optimize areas of your business within your control. 

• Build a strong tech foundation: Your WMS and TMS software is the backbone of your operations — from workflows and tracking to customer records and rate automation. Ensure you have a scalable and flexible solution in place like CartonCloud, to enable you to grow and evolve with enhanced supply chain tracking, inventory management, and automation.
• Enhance Shipment Visibility with Real-Time Tracking: Deliver accurate monitoring of shipments to customers and partners to identify potential delays and optimize routes.
• Strengthen Relationships with Key Partners: Build and maintain strong relationships with carriers, suppliers, and customs brokers to navigate tariff-related challenges and deliver easy, automated real-time reporting. 
• Utilize Advanced WMS Reporting and Forecasting: Leverage CartonCloud's real-time inventory tracking to gain accurate insights into your stock levels and movement. Analyze historical data to identify trends and forecast potential changes in demand.
• Offer Flexible Storage Solutions: Provide on-demand warehousing or adaptable storage options to accommodate fluctuating inventory levels. You can also optimize your layout for efficient picking, packing, and shipping to further streamline business operations.

This is not the first time our industry has seen major shifts in recent years. In 2022, unprecedented online shopping and booming demand created significant ripple effects across the industry, including a shift to focusing on digital reporting and record-keeping for future planning. 

At the end of 2024, we saw industry operators looking to tech to not just aid in traceability and real-time reporting but to give the ability to scale up, reducing operational costs and overheads while increasing output. See more CartonCloud industry reports here. 

Prepare your 3PL for success in times of disruption 

The best thing you can do to prepare your 3PL for success in changing markets is to make sure your systems are agile and scalable. You need to be able to pivot when opportunities arise, offer solutions for your customers, and easily scale your operations and services to say yes to new business opportunities. 

This starts with having the right foundations. CartonCloud’s cloud-based WMS/ TMS is designed to give you the tools you need to succeed in your industry. Our software is designed to streamline and automate logistics workflows across a range of services and industries — and that gives you the flexibility to scale, move, and shift as you need. 

Consider new revenue streams you can offer to your customers (like cross docking, e-commerce, serialised storage, and many other service offerings), or how you can expand your business to bring on new clientele with new services. 

Learn more

Our Customer Success Team are here to help, giving you industry expertise and advice, to help you get the most from your system, and unlock new opportunities and services. Simply reach out to support, book your health check, or to come on board with CartonCloud, book a free demo today! 

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Global tariffs are on everyone’s lips. Following the US Government’s recent announcements regarding tariff changes, the term has seen a 1455% rise in online searches. (Image credit: Freightwaves, Supply Chain Brain, Industry Today)