Ask Ahab 86

Issue 86

Dear Ahab:

I’ve seen in recent weeks that countries like Myanmar and Vietnam have become the target of tariffs to curb transshipping, which the Trump administration says companies are engaging in to decrease their import duty payments. How big of an impact will this have on my supply chain?

– Confused About Customs

Dear Confused About Customs:

With duties as high as 40-percent, the Trump administration’s crackdown on transshipping is designed to hit hard and stop companies from playing hide-and-seek with their country of origin. Unfortunately, the Trump administration did not specifically define what will count as transshipping and is granting Customs & Border Protection the authority to declare whether or not a good was transshipped for the purpose of avoiding a duty.

This means that if your business relies on parts or products routed through countries like Myanmar and Vietnam, you could see delays, higher costs, and a whole lot more paperwork. But the reality is, without a clear definition, it is difficult to determine what kind of effect this could have on your supply chain. One thing is certain, expect a lot of turbulence.

Therefore, until a clear definition is established and communicated, I would advise you to begin a thorough examination of your supply chain and, if necessary, find alternative shipping routes.

Dear Ahab:

I’ve read that cargo theft has become a lot more common. How can I keep my cargo and business safe?

– Watching My Freight

Dear Watching My Freight:

You are right to be concerned. Last year there were nearly 4,000 reported incidents of cargo theft in the United States, most of which happens, unsurprisingly, around the holiday season.

To be frank, asking how you keep your cargo safe is not going to help, as much of the security is out of your hands. Simply put, you cannot physically prevent your cargo from being stolen. Instead, you can protect your business from losing money by purchasing cargo insurance.

While you may lose some or all of your cargo, you can, with cargo insurance, recover the full value of what was stolen – alleviating any financial problems that could result from having your cargo stolen.