INSIGHTS
- Short-term action to tackle tariffs and trade shifts tends to favour frontloading, spot usage and re-routing, with shipping firms also using scenario modelling and reassessing contracts to stabilise their long-term picture, Xeneta said.
- A lot of companies are holding off on taking rapid action; instead, waiting to see what happens next or monitoring what steps their peers are taking, it noted.
A lot of companies are holding off on taking rapid action; instead, waiting to see what happens next, monitoring what steps their peers are taking, or awaiting direction from business units on the course of action, an analysis by the Norway-based company said.
Meanwhile, finance teams are carefully evaluating the cost implications of each potential initiative.
Other big volume players are taking more drastic measures, cancelling months of orders coming out of China and potentially causing rates to decline further.
These vastly different responses show just how complex the situation is. But there’s also a more middle-ground strategy that companies are adopting: using free zone warehouses where they can store cargo ready to extract and date stamp at a later time.
Some of the most popular actions currently being considered and planned by companies are exploring new trade routes (26 per cent), renegotiating contracts (24 per cent), moving volumes between suppliers (19 per cent), exploring index-linked contracts (12 per cent) and shifting manufacturing set up (10 per cent), according to a poll conducted by Xeneta in April among its customers.
With such a complicated trade landscape and so many potential routes forward, it can be difficult to know which initiative is the right move. The best short- and long-term decisions are backed by robust intelligence into potential tariff, market and trade route shifts, it added.
Fibre2Fashion News Desk (DS)