3 ENGAGE YOUR TRADE ASSOCIATIONS Trade associations can help businesses collectively discuss with the U.S. government the challenges that arise when engaging in cross-border trade, Stinebower says. They also can assist companies in crafting programs to address these challenges. For example, the Footwear Distributors and Retailers of America, noting that 99% of shoes sold in America are imported, has developed sourcing and compliance programs for its members. It also offers training to help industry leaders understand shifts and trends, and how best to address challenges. 4 TRY NEW APPROACHES TO SECURE INVENTORY In their efforts to minimize lost sales, many businesses have been pulling forward, or placing inventory orders ever further in advance. This practice will likely persist for a while, as it provides more leeway to identify optimal points of origin and destination, says Judah Levine, head of research with Freightos, a digital booking platform for international shipping. To control costs while reducing the risk of delays, importers can prioritize some shipments, and then allocate the rest over time and/or between carriers, suppliers, and freight forwarders. If demand abruptly changes, importers that order early may need to mark down their goods or hold them over to the following season, Levine notes. Another approach is to commit money to factories to secure production time. “It’s similar to a retainer, but working in partnership so that you can be nimble and pivot,” says Karl Hatt, vice president with global supply chain services rm Tompkins Solutions. Component parts and raw materials become less exible the more value- add that’s put into them, so committing resources to a nished product limits an importer’s ability to change them back to raw materials that can be reassigned to another product.
GAIN VISIBILITY TO YOUR SHIPMENTS When you know where your goods and shipments are, you can make more informed decisions. And given advances in visibility technology, it’s possible to access shipment locations in real time, or near real time. Of course, it’s generally not possible to shift goods while they’re on the ocean. However, knowledge lets you intelligently adjust deployment decisions. 2 ASSEMBLE A TRIAGE TEAM ACROSS FUNCTIONS To operate in an ever-changing geopolitical environment, companies need to have triage teams at the ready. These teams are cross-functional groups that can evaluate supply chain, logistics, and other operational challenges from multiple perspectives and then move quickly, explains Cari N. Stinebower, partner and member of the regulatory defense and investigations practice with Winston & Strawn LLP, an international law rm based in Chicago. Say a company has a robust joint venture with Russia and the political environment there deteriorates. Shutting or moving operations may be difcult, due to Russian restrictions on divestments and moving funds, Stinebower says. An established triage team can intelligently assess the situation and then act. Latin America is another area where a triage team may be useful. In particular, the closer ties between Colombia and Venezuela have prompted concerns, Stinebower says. Many companies had viewed Colombia as a stable trading partner. In contrast, the U.S. State Department has expressed concerns about corruption, a volatile regulatory environment, and the difculty companies face repatriating earnings out of Venezuela. “This shift is triggering a pause for many companies that had been
Few expect the Inflation Reduction Act of 2022 to have an immediate impact on supply chain operations. Most of the incentives require materials to be sourced and manufacturing to take place within the United States, and are geared to clean energy. The United States is currently not competitive in this market and has a limited appetite to mine raw materials, notes Spencer Shute, senior consultant with Proxima. Brian Bourke of SEKO Logistics also anticipates little short-term impact on imports. Yet incentives to decarbonize materials handling equipment at ports, and for electric vehicles and charging infrastructure, could be tipping points for those in the logistics sector who are looking to decarbonize by 2050. The incentives and investments could reduce the costs to convert to electric and other renewable energy sources. INFLATION REDUCTION ACT
considering taking advantage of Colombia’s free trade zone,” Stinebower adds.
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