GLOBAL SUPPLY CHAIN STRATEGIES: CERTAIN UNCERTAINTY
Global trade and transportation is becoming more uncertain for many businesses due to increased geopolitical tensions, tari s and trade barriers, and lengthening supply chains.
THE END OF DE MINIMIS? The $800 de minimis value—the maximum amount before duties are assessed on most packages coming into the United States—remains in effect as of mid-February 2025, but could change. Lowering this number has been a topic of conversation among policy makers in the United States for years. While the regulation’s original purpose was to allow travelers to bring back personal goods, the de minimis exemption has been used for many ecommerce shipments, Reuter says. More than one billion packages each year fall under the $800 amount, the Congressional Research Service found. Any signi cant, sustained change to the threshold will impact not just consumers, but Customs of cials, who will have to obtain more information on all these packages. That will require new technology and processes, as well as time to implement, Reuter says. THE RIGHT SIDE OF CHANGE The various changes impacting global supply chains are neither good nor bad in themselves. “It depends what side of it you’re on,” Amling says. “If you’re on the wrong side of it, get on the right side.”
to boost costs, while any retaliatory tariffs will also impact demand, says Srini Rajagopal, vice president, logistics product strategy with Oracle. The war in Europe also impacts supply chains, as Ukraine exported components some manufacturers need for production. Questions around immigration policy in the United States also keep supply chain professionals up at night. Depending on the changes implemented, it’s possible several million people will exit the work force, Rajagopal says. THE ENDLESS AISLE Online shopping, which has given rise to endless aisles of products, also changes global supply chains, says Kimberly Reuter, CEO of CSG Consulting. Rather than a hub-and-spoke structure, a company might source directly from a manufacturer, or have an order arrive pre-packaged and then ship it to the consumer. This means the customer experience, including delivery, starts at the product’s origin. Few customers differentiate between the product and the supply chain, Reuter says. Instead, many will penalize the manufacturer if, for instance, an item arrives late.
While the speci c disruptions and politics will change, supply chain professionals confront the same basic challenges they’ve always faced: reducing costs, minimizing risk, and improving customer service, says Richard Thompson, international director, supply chain and logistics with JLL. To meet these challenges and thrive in today’s uctuating global supply chain environment, several attributes are critical. Companies need a strong understanding of the practical impact of geopolitics, a diversi ed supplier base, and a robust trade platform. OUTSOURCING COSTS RISE The decision by many American companies to outsource manufacturing has contributed to today’s challenges. Over the past four decades, China has become the greatest manufacturing hub in human history, says Nick Vyas, founding director of the Global Supply Chain Institute at the University of Southern California. Producers and consumers saved money, but supply chains became less resilient and less able to respond to uncertainty. The current geopolitical environment adds to the concerns. For U.S.-based companies, the proposed tariffs threaten
22 Inbound Logistics • March 2025
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