Tariffs, Trade and Supply Chain Solutions: How Lineage can Help Businesses Navigate a Shifting Landscape

In the dynamic world of global trade and politics, the word “tariff” is a constant source of confusion and debate. Tariffs are a policy tool used by nations around the world, with the power to affect supply chain strategies, reshape industries and alter the geopolitical landscape. In recent months, tariffs have become a hot topic in political discourse, with a heavy focus stemming from the US election. With new tariffs likely on the horizon, and the potential for retaliatory tariffs, we’ll take a look at what tariffs are, how they can affect supply chains and how Lineage helps set customers up for success with imports and navigating dynamic trade policies.

What Are Tariffs, and Why Do They Matter?

In simple terms, tariffs are taxes or duties placed on imported goods. To help understand their impact, one possible example is if, hypothetically, the US places a 25% tariff on imported avocados from Mexico, then any company importing avocados from Mexico must pay 25% of the value or amount of goods to the government before being allowed to sell the avocados in the US. These additional costs are typically passed down to the consumers by raising prices. For global companies that rely on various goods produced and sold in several different countries, tariffs can send ripples through their supply chain.

The Domino Effect: Tariffs’ Impact on Supply Chains

Tariffs can have wide scale effects in the global trade landscape, setting up a domino effect that cascades down the supply chain, from the producers to the consumers. Some of these effects in the US could include:

Navigating complex quotas and compliance with government agencies like Customs Border Protection (CBP), the United States Department of Agriculture (USDA) and the Food and Drug Administration (FDA) add layers of bureaucracy.

• Potential go-to-market delays due to goods often needing to be stored in bonded warehouses while waiting on inspections.
• Higher tariffs could spark shortages in grocery stores as fewer food products are imported into the US.
• Businesses are forced to make the decision of either absorbing the added expense from tariffs or passing it along to consumers with higher priced goods.

These challenges can prove to be insurmountable without the expertise of a supply chain partner like Lineage.

Lineage’s Supply Chain Solutions Turn Import Challenges into Opportunities

At Lineage, we aren't just responding to these challenges—we’re anticipating them. By leveraging our cold storage network, expertise and suite of supply chain solutions, we help businesses navigate the complexities of import regulations and tariffs to keep their supply chains moving efficiently and seamlessly.

1. Bonded Warehousing: A Strategic Advantage

Bonded warehouses are the unsung heroes of import management. They are facilities where imported goods are brought in and stored under the supervision of CBP. Here, they wait until certain conditions are met, including compliance with import quotas, inspections and payment of duties or tariffs. Once the conditions are met, the products can be released to the market.

The best way to think of it is that these facilities essentially act as "parking lots" for goods coming into the country. Lineage operates nine active bonded warehouses in the US and has the capacity to scale up as needed.

Benefits of Utilizing Lineage’s Bonded Warehouses Include:

• Flexibility: By flexing bonded space up or down in our bonded warehouses, Lineage helps customers minimize costs while maintaining compliance.
• Network Scale: With nine bonded warehouses around the US and the prospect of more coming online in the future, Lineage’s network provides a strategic advantage for businesses importing food products into the country.

2. USDA-Approved I-Houses: Seamless Customs Compliance

Another hurdle that businesses must overcome when importing certain products into the US is inspection compliance. Lineage streamlines the inspection process with our USDA-approved I-House facilities. I-Houses, or inspection houses, are facilities that specialize in in-house USDA inspections.

Streamlined inspection services are crucial for products like meat and poultry, which require 100% USDA inspection before hitting the market. This process helps prevent the spread of diseases like foot-and-mouth disease, while getting these products to market quickly and efficiently. Lineage operates 42 USDA-approved I-Houses, strategically located near major ports and points of entry across the US.

Benefits of Utilizing Lineage’s I-House Facilities Include:

• Lineage I-Houses streamline the inspection process by providing in-house inspection services in cooperation with the USDA to help ensure goods meet all regulatory requirements before entering the U.S. market.
• Lineage’s network of 42 I-Houses across the US, near key ports and points of entry help minimize transit times while maximizing efficiency.

3. Integrated Solutions: The One-Stop Supply Chain Solution

Another key benefit of partnering with Lineage is the ability to bundle up on services to become more agile in the face of the ever-evolving global trade landscape. This helps Lineage customers quickly adapt to changes in the market, while maintaining real-time visibility into their supply chain. We work hard to be the one-stop-shop for supply chain services. Existing customers that bundle from Lineage’s suite of integrated solutions benefit from our competitively priced One Lineage fee structure.

With a network of cold storage warehouses, temperature-controlled transportation offerings, including our Velocities multi-vendor cross-border program, and customs compliance expertise, Lineage helps ensure our customers products are properly handled from start to finish. Pair that with our cutting-edge warehouse management platform, Lineage Link®, acting as the eye-in-the-sky, and Lineage customers have end-to-end, real-time visibility into their supply chain. This includes visibility into orders, inventory and shipment statuses across the Lineage network of facilities.

From cold storage to customs compliance, our integrated solutions cover nearly every link in the supply chain and help set businesses up for success when importing food products into the US.

Lineage Helps Prepare for a Dynamic Trade Environment

Trade policies are always evolving as the geopolitical landscape shifts and changes. That’s why it’s important to partner with a supply chain company that doesn’t just react to trade challenges, but anticipates them. Tariffs will continue being a diplomatic tool for world leaders in the years to come. To be successful, businesses must be prepared to adapt. Agility in supply chain management helps set businesses up for success.

Lineage’s extensive network of bonded warehouses and I-Houses, along with our suite of integrated solutions and industry expertise, positions us as the supply chain partner of choice for navigating the changes to come. No matter how complex the global trade landscape, Lineage is ready to help customers turn supply chain challenges into opportunities.