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From natural disasters like hurricanes and earthquakes to pandemics, cyberattacks, and labor strikes, companies have to navigate so many complexities to get goods where they need to go.
What's their secret weapon to operating within the unknown?
It’s the people.
Welcome to Supply Chain Champions, the show that showcases the stories of those who keep supply chains running smoothly. We're here to highlight their untold stories and share lessons they’ve learned along the way.
Join us as we peel back the curtain on the people who make supply chains work and enhance your own career in the process.
Tune in. Get smart. Move forward.
Eric Fullerton [00:00:00]:
Tariffs are not a positive and we're not going to try to position them. But the organizations who are taking this as an opportunity to differentiate from their competition and yes, in this instance, using project44 and our movement platform, are the ones who are positioning themselves to win in this complex and difficult market.
Eric Fullerton [00:00:22]:
Welcome to Supply Chain Champions, the show brought to you by project44, where we're talking to the people who make supply chains work.
Eric Fullerton [00:00:32]:
Hello everyone and thank you all for joining today. And I just wanted to introduce myself. My name is Eric Fullerton. I lead the product marketing function here at project44. I'll be your host today. We're tackling, I think, the biggest topic not only in supply chain, but frankly in the world right now. We've all seen a lot of headlines and news stories about tariffs and we will provide a little bit of overview and some context there. But it's not where we're going to spend most of our time. Instead, we'll talk about what you as supply chain professionals can actually do in response to tariff uncertainty using technology. In our agenda, we'll provide a timeline of the tariffs that have occurred so far. We'll talk about some strategies for mitigating these tariffs. But we're going to spend the bulk of our time on two things. First, some real world customer examples of how our customers are using our movement platform to add flexibility and intelligence to their decision making process to mitigate the impact of these tariffs.
Eric Fullerton [00:01:32]:
And then we're going to show a demonstration of how you can actually employ some of these same tactics using technology. Now let's start with some of this context. I know that tariffs are very familiar, not only to supply chain professionals, but everyone right now, globally in the past several years, specifically as it relates to supply chain, though with new administrations and new rules, they have evolved from an area of concern and focus several years ago to something today which is bordering on an outright crisis. And what we're seeing is that there's these ongoing tariffs and these counter tariffs and these countermeasures with the US and their trading partners in China and Mexico and Canada. When you think about the broader goal of tariffs, it's really about measuring and aiming the domestic production and exports and trying to reduce that trade deficit. And we're seeing this happen after a lot of companies importing to the US that reshored to Mexico, driven in part by some of those 2018 tariffs. But what we're seeing now is really this is accelerating very significantly. And you can see kind of some of the key timelines that have occurred around tariffs starting back in September and then really accelerating through into March and just the past couple of weeks alone.
Eric Fullerton [00:02:49]:
But the interesting thing about this timeline is it's not only just the things that have actually happened, but it's also things that have created an immense amount of confusion, even if they didn't actually occur. And these things are happening every single day. It's been a constant theme. When you think about just today, there is a threat to impose 200% tariffs on alcohol from the EU in response to the retaliatory 50% tariff on US whiskey. That's today. Yesterday there were some different things that had happened in terms of, you know, steel and aluminum happening earlier this week. The then kind of like responses to that and the retaliations associated with that. Long story short, when you have these key events and then these kind of threats, I think I would say on the bottom it's constant thrash.
Eric Fullerton [00:03:35]:
And that thrash creates a lot of instability. And that instability is exacerbating the economic uncertainty, the inflation, there's the operational cost component for businesses, of course, and that reach is really vast. It's. We're seeing the impact to global markets, but that's not we're going to talk about today. But what we're going to focus on is the supply chain and logistics side of things. As supply chain professionals, the issues that are listed on the bottom here in many ways are just as impactful to your day to day life as the ones on the top. And the frequent shifts in the trade agreements, the policy reversals, it's creating a landscape that is challenging even the most seasoned and experienced supply chain leaders. So what's really certain right now is that there is uncertainty.
Eric Fullerton [00:04:19]:
We don't know what's going to happen next. We don't know what tariffs are going to be put in play. We don't know what countermeasures will be ratcheted up or ratcheted down. We don't know if there's going to be limitations on certain goods, on certain tariffs, or walkbacks on some of these tariffs entirely. And the problem for supply chain professionals is that uncertainty is probably the worst thing that you can possibly experience and deal with. It's actually harder than when something bad happens because you can take decisive action when that happens. But now, because we're unsure and there's uncertainty, the best action or path or option isn't clear. So what the real need is and what this all boils down to is a need for flexibility and the ability to manage your supply chain operations and your ecosystem more effectively and more reliably in the face of a lot of these, these things.
Eric Fullerton [00:05:11]:
So when we talk about the strategies that are often employed when we're thinking about responding to tariffs, we think about things like, you know, shifting your sourcing strategy, finding alternative suppliers. Maybe it's about adjusting production and operations, redesigning products, reshoring, near shoring. These are all very legitimate things that have a significant amount of impact. But the challenge is they're long term, they're not going to help you manage and mitigate uncertainty today, tomorrow, next week and next month. And that's really what we're going to try to focus on. So when you think about some of those shorter term things though, there are some challenges with some of them, right? You could of course just increase prices, but then you have to pass that on to your consumers.
Eric Fullerton [00:05:53]:
You could stockpile massive amounts of inventory until this blows over, but you're going to significantly increase your carrying costs and your cost on hand. So what we're going to spend a lot of time on today is focusing on this real time risk analysis component because this is one that it doesn't have some of the negative impact of some of those shorter term strategies, but it's not necessarily easy to do, especially if you don't have that right technology in place. So let's spend some time digging into the specifics. Let's talk a little bit about some real world customer success stories. And when you think about these stories, there's a couple key themes that you should just keep in mind. Right, there's this primary focus for our customers and we're talking to hundreds of customers a day about tariffs. The themes that constantly are coming up are this real time supply chain intelligence. How can I use ETAs and accurate data to understand what's going to be arriving before tariff deadlines? I want to do more strategic planning.
Eric Fullerton [00:06:49]:
We're doing a lot of scenario planning. I need some informative data and information that's flexible so that I can prepare for different tariff outcomes and then use intelligence related to that. I want to be able to optimize my costs. I want to minimize and mitigate costs where possible, but in some instances, absorbing those costs may actually be better than absorbing the 25 or 50 or 200% that you may receive on a specific tariff on a certain good. And then of course, we've already talked about the supply chain diversification component. So when we think about this, much of it is the core number one thing. And there's lots of different examples that we'll dig into in more detail where there's much broader asks in conversation. But the critical thing right now for real time intelligence is to understand exactly what is arriving, when and where, and understanding exactly what shipments and what inventory are going to be impacted, affected amidst all this tariff confusion.
Eric Fullerton [00:07:46]:
And that's probably one of the primary use case that flows throughout the three customer examples I'm going to share, but let's dig into each of them in a little bit more detail. So first we'll start with a massive global apparel retailer. I'm betting that every single person who's listening, they have at least one of this brand's items. It's maybe in their closet, maybe it's in their shoe rack. Because the sensitive nature of tariffs and some of these responses, we're not going to be sharing the customer names, but we'll be going into intense detail on the actual stories themselves. For this organization, they're really focused on some bigger things like simplifying their product strategy to try to make their tariff exposure a little bit less complicated. They're trying to also increase their agility to gain insights, predictive freight insights to navigate these tariff driven sourcing and logistics challenges.
Eric Fullerton [00:08:35]:
And for the challenges for a brand like this, they're going to need to be able to react in real time when it comes to potential tariff increases on apparel, it's footwear on ocean freight. And the challenges are around making sure that I use land shipments before tariff deadlines or adjust my pricing models as a result of that. And another challenge is we're seeing a lot of spot rate fluctuations. These are impacting the freight costs. And we're also seeing long product lead times for some of these products that actually are already on their way. So how are they responding? They're taking a kind of strategic approach to this and they're simplifying their operations by a product strategy approach. The first is fewer, more focused product lines. So they're trying to consolidate and streamline their shipments that are actually being delivered.
Eric Fullerton [00:09:22]:
And they're doing that with a focused major market distribution model. So they're really focused on LA, New York, Berlin, Tokyo, to enable better agility and responsiveness, really getting things into those core areas. And in terms of the real time experience and intelligence component, what they're taking is trying to understand the sailing schedules, the ratings information, incorporating how this real time data on carrier performance is then going to be able to help them to secure better spot rate purchases to offset the cost increases that they're already seeing. And then of course, it's that core use case that I already talked about, instead of relying on ETAs that are coming from carriers or source themselves, they're using our predictive data to accurately assess which of the shipments are going to arrive before a tariff takes effect. And then we're also working with them on a couple other things, trying to optimize some pre tariff shipments, understanding and prioritizing. What do I need to expedite? What can I delay? What actually needs to arrive at this time? Do I need to air freight expedite it or can I actually hold because I have efficient inventory coverage in region? And then how are they trying to really shift the different sourcing and production models and using the intelligence that sits within our platform to manage those things? So for them, they're seeing this opportunity, they're seeing this challenge. Which tariffs are a challenge, let's not sugarcoat it as an opportunity to differentiate from their competition and navigate that uncertainty of tariff policies. And that's true for all the customers that we are talking to and that we've shared.
Eric Fullerton [00:10:52]:
Yes, this is a challenging scenario. It's difficult to manage. But if you are able to do so more effectively than your competition and you're positioning yourself to win. Our next story is a large global retailer. This is someone we've been working with for years actually. And one of the primary use cases and focuses for this, this retailer was to create 180-day visibility window on all their inbound shipments using our movement platform. And we've achieved that with them and it's resulted in some really positive outcomes across their entire business. But when we specifically relate it to the tariff ecosystem today, this has actually helped them employ a much more effective strategy, helping them do predictive risk analysis.
Eric Fullerton [00:11:32]:
Again, that's common use case of identifying which shipments will be affected by upcoming tariffs and then being able to intervene when necessary and not intervene when not necessary. And that is a really important part, right? Understanding when you do need to air freight, ocean transport, if it's not going to meet deadlines, that's just this really critical component that we're seeing cut across all of our customers in those core use cases. But they're also working with their suppliers. They're trying to negotiate some shared tariff burdens, they're working on pricing concessions with their suppliers, they're trying to manage and mitigate pricing around their overall strategy, implementing kind of some strategic adjustments, trying to find ways they can preserve those profit margins and then kind of mitigating some other things first. And then there's the diversified sourcing part again, maybe something longer term. But this is something that, you know, they've been working on for a long time to kind of diversify their supply chain ecosystem. So another good, very specific example there of a customer who's using our platform to solve some of these challenges today, and our last one is a massive global food and beverage retailer. This is someone that if you were drinking coffee in the morning, you know exactly who they are and you've certainly consumed their products.
Eric Fullerton [00:12:41]:
And for them they really are at a high level of concern on the high import costs for China made merchandise, things like tumblers and mugs and stuff like that. They're also seeing a lot of port congestion and delays and they're seeing some shifts on rail trucking with Canada and Mexico to some of these ocean based suppliers, they're seeing high fees around detention and demurrage. More companies switching to ocean imports instead of focusing on some of these cross-border trucking from Mexico and Canada. And they're also seeing an increase in the food import lead times. So to respond to this, they've really adopted what I think I've seen many organizations focus on. They have this war room mentality and they're very focused on getting some of their experts in a room. It's not just supply chain folks. That includes finance, that includes operations, that includes components of the sales organization to develop a transport like a prioritized planning scenario to better manage those cost pressures and import disruptions.
Eric Fullerton [00:13:36]:
So they're just like many of our customers, they're running scenario models, they're trying to assess tariff impacts every single day. And how can we mitigate port fees, how can we optimize our costs to protect our margins? And the way they're using our platform specifically is with a solution called detention and demurrage monitoring. We're seeing more congestion than expected. And for them that capability of understanding what container is at risk or undergoing actual fees that are incurring fees in real time, they're able to actually pull that information out but also gain the flexibility that in some instances, and we'll show this in the demonstration, it may actually be more beneficial to accept those fees or absorb them if that means there's going to be some leeway on that tariff actually going into effect. Because two days of detention demurrage charge is certainly much more impactful than a 50% tariff. So that flexibility and elasticity is really important. And they're also using our initiate platform, they're using this for spot rate purchasing. Trying to find where can I find the best rates, where can I find the best performance and then trying to make sure that their internal logistics processes are really tight, increasing that velocity through the yard.
Eric Fullerton [00:14:46]:
And they've already seen that their already mitigating and limiting some of those unexpected tariff fees. They're kind of undergoing this scenario planning that is really going to, you know, they have all these different models that the data is feeding into these models, which means it's not just about what's happening right now, it's planning out multiple different scenarios and seeing when their exposure is going to impact them the most and when they have to work through some of those things. So three kind of detailed customer examples there. And I think what I want to do next is I want to show it because talking about it is great. I think showing this in action and how you can actually do it is probably more impactful. We have a large suite of products that our customers are using today. All these ones are folks that customers are using to overcome and manage through this tariff uncertainty. But for the purposes of our demonstration, we're going to show these core ones making sure that we're focusing on the primary use case that we're seeing our customers experience.
Eric Fullerton [00:15:42]:
So let's take a look at a demonstration here. And in order to do that, I am going to open up our platform called Movement and I'm going to go into our homepage here. And overall, as we've talked about in the landscape around shifting tariffs and regulations, businesses really require this strategic, proactive risk management piece. In the demonstration today, I am going to be a transportation analyst. I'm someone who's leveraging project44 and I'm trying to master these core challenges that we're dealing with today. So I start my day in movement and when you can look at the movement homepage here, I've personalized this with a lot of the same views. We'll get into the details in a minute. On the homepage, what I'm able to see is I've got 14 shipments scheduled to arrive before the March 25th tariff deadline.
Eric Fullerton [00:16:33]:
I've got nine that are expected to arrive post deadline, but importantly zero that are at risk of missing the tariff deadline. And this is all according to project44's AI-powered ETAs. So what I need to know is I want to make sure I'm alerted if anything changes on those zero shipments that are currently at risk right now. And if project44's model predicts that any of those shipments will be delayed, then I need to figure that out. So I'm going to click here into my saved View and as you can see, there's no shipments as we just talked about. But this may change. It could change at any time, it could change in an hour. So I'm going to set up a notification and what I'm going to do is I'm not only going to set up a notification for myself, but I can actually set up a notification for anyone in my organization.
Eric Fullerton [00:17:17]:
My manager, who is really great but is asking me about this pretty much every 30 minutes is someone that I'm going to actually put on this notification. So that person is going to be informed immediately if anything actually changes. So I'm going to get the updates and they'll get the updates, allowing a little bit more of a self service experience which I think will help my day to day a little bit more. So let's go back now to our homepage and I want to take a look at another way that I'm going to be able to stay informed on the changes that are impacting my supply chain. So previously I'd start my day and I'm checking news for events that are impacting shipments and then I'm going to manually search movement to see what's at risk. But with the new AI Disruption Navigator that was recently released just last quarter, I'm actually seeing a newsfeed of global events and really interestingly to me is I'm actually able to see the scale of that risk that is posed to my shipments. So today I can take a look and I can see there's flooding in Spain that's not going to have any impact on my shipments. There's a cyclone in Eastern Australia that looks like it's going to impact about 5 of my shipments.
Eric Fullerton [00:18:23]:
There's a couple instances of port congestion globally. I can see there's about 32 ships that are waiting to berth in Port Elizabeth, South Africa. So this one, fortunately it doesn't look like it's going to impact my shipments, but I do recall I got an email about this, someone in my senior leadership asked about it. So I can now respond to them confidently, hey, we don't have any exposure here, we're covered. So it's important to know about the things that also aren't happening and that helps my day to day. So the real time data is going to help me understand what's going on, including the risks to my supply chain. It's going to help me adjust a little bit. Let's take kind of like a deeper look at some of these things and what I want to do is I want to dig into the details in a little bit more of a targeted way.
Eric Fullerton [00:19:03]:
So what I want to do is I want to search for a shipment or an order of interest. And in this instance, I'm really going to be looking for a specific purchase order. I can actually search for the po so that's super easy, usually a fast way to do it. I had it handy and that brings me to the actual shipment that is carrying it. So when I click on those shipment details, I'm actually now able to go in and see all these details of the shipment. Nice information here, that's helpful to me. But I can also see the related orders and that's really what I'm after. And when I'm now looking at this, taking a quick look, I can see that I've got one item here, 3ug74, and this is going to be affected by new tariffs.
Eric Fullerton [00:19:42]:
So I'm going to go back to my search page and I'm going to take a look at all of the shipments that are containing this specific order and this specific item, because that one is something that's, that's going to be at risk for me. So what I'm going to do next is I'm going to try to refine my search a little bit. And when I'm refining my search, I'm going to try to focus on in transit shipments. I want them to be arriving late and I want that to be late by more than three days. And it's coming to the Baltimore facility. So I'm going to type in Baltimore. Even if I misspell, it doesn't matter, it's going to show up for me and I can come in here and take a look at, see what are the shipments for the product that is coming into this location. And also I can understand what are the exceptions that actually apply to this.
Eric Fullerton [00:20:27]:
So if it's running late by more than 10 days, if it's held or if it's rolled, I can save this view and dig into the shipment details and I could figure that out if needed. But in this instance, let's go back to our homepage. Let's talk a little bit about managing exceptions because these kind of targeted and sometimes reactive searches, they're useful because I need info, but I actually really prefer those preset views like my earlier tariff view. So I've clicked into the vessel role at Transship View here. This is one I've saved for a long time. It's something I'm taking a look at all the time to identify what's at risk of a delay that could subject me to tariffs I wasn't planning on. And we can take a look. There are a couple shipments here that have rolled.
Eric Fullerton [00:21:07]:
They're all arrived, but p44 is actually predicting the departure is going to be delayed. So I'm going to take a look at that shipment. I see that it's rolled from the Pearl to the Sapphire at the Port of Busan. Got it. And now I can see that project44 has this visibility into all of this information. So we're looking at over a million containers a month. Taking a look at all these vessel movements, has all these updated carrier schedules and then when you take that in with some AI and data science, what I get as a user is forecasted shipment delays that are earlier and more precise than I'm actually able to get from a carrier themselves, whether I go to the website or whether I call. And this also includes predicting exactly when vessels will arrive and depart from these key transships shipment ports.
Eric Fullerton [00:21:51]:
Because I know that this shipment is going to be leaving from the Port of Busan late. We already know that it's going to be arriving late into Los Angeles. And this is super important for me because the shifting tariff deadlines, I can now predict today based on the information I have today, this might change tomorrow whether this shipment will be subject to new tariffs based on that predicted arrival. So what's nice here is I can also share this information with my team. I can share this information with a downstream party, but even better, I can actually share this with a customer. So I know I have a customer who's super focused on this specific order is asking me questions. We were on the phone yesterday talking about the impact here. And when I share that with a customer, they then receive a link and they're able to open that link at any point in time and they're then be able to use interview the shipment details, all the future updates, maybe they see something happen in terms of tariffs, the dates change, they have that link, they can go in on their own and self service a little bit.
Eric Fullerton [00:22:51]:
But that just makes my life so much easier because I've not only done this for my external team, but my internal team. So because I'm doing that and I've already done that externally, I'm actually going to do a quick task here. I've got a team member, I want to notify them some information. They need to know what's going on, monitor that shipment and all the activities on it. So anyone on my team, I've only made that task to one specific person, but anyone else is actually able to comment. So what's nice here is we can bring in others to collaborate. So if I'm not actually the person who has this answer, I can then bring in someone else who can help me answer that question and we can kind of workflow and workshop this in real time in the solution itself. That's really great rather than having to get on the phone or email or use another tool to do so. So let's talk a little bit about detention and demurrage. We heard with some of our customer stories. That's, that's important. But let's take a look at some of these detention demurrage charges. You know, one of our approaches to managing tariffs as an organization is we're actually intentionally holding some of our containers at port. And what this is doing is it's allowing us to either avoid or delay tariff payments. And this is crucial, helping us navigate some of these fluctuating tariff schedules.
Eric Fullerton [00:23:59]:
So I'm actually in here, I'm going to zoom in on Norfolk in the US because we've got some containers here. We're holding them strategically because there's some uncertainty about what actually is going to happen and what impact there's going to be. And I'm able to pop in here and I can see that there are some containers that are actually incurring some per diem charges. So I'm actually then, you know, now able to kind of figure out, all right, I want some more data elements. I'm going to go in, I'm going to take ported discharge, I'm going to take last free day, make sure that I have that column and all that information. And then really trying to figure out, all right, now I want a kind of a better view and a look at all of this information. And then I can actually see the dollar and detention charges that are actually being impacted and affected here. So what I've just taken is a much cleaner view.
Eric Fullerton [00:24:43]:
This, this really allows some elasticity here for me to understand tariff costs and then compare that to the potential cost of what these detention charges are going to be as they continue to accrue fees. So this is really impactful. This is that flexibility that we were talking about understanding, hey, when is that optimal time? How can I balance that cost of fees versus savings from from tariffs? And then, you know, when I want to make the decision, I can coordinate with our dray man, I can make sure that we're arranging the pickup at just the right time. When I'm mitigating some of those fees. So I'm now going to save this view. I like this one. This is something I'm probably going to be checking in a lot. I want to make sure that I have the situation at Norfolk well in hand.
Eric Fullerton [00:25:22]:
I don't want any of those unnecessary fees, but we may make some strategic decisions here. And once I create that view, I go back into my homepage and that means that I've created this view. It's right here on my homepage. And I'm just one click away from this important situation. And I'm now monitoring this multiple times a day because we have to make that call really, really soon, probably in the next couple days on when we're going to decide what cost to absorb and what not to absorb. So overall, when you think about this demonstration you saw, you know, talk about what we just saw, you're able to effectively manage your supply chain through this advanced early identification, this comprehensive global visibility. You get these accurate ETAs and proactive communications. And critically, I'm able to ensure this optimal alignment with my business strategy, the regulatory changes, my customers and all the people who are also working at my company.
Eric Fullerton [00:26:13]:
So I hope folks got a sense of what, you know, we are able to actually do today. What I think is really interesting here is the uncertainty is not something that's going to change. So having that flexibility, making sure that I can communicate with my partners, with my team members, with my customers, making sure that I can really trust the data and information to navigate and mitigate some of the impacts of these tariffs and that tariff uncertainty. When you think about being an organization, a global organization who's at risk of this exposure, this is a competitive advantage. It's a challenge. Tariffs are not a positive and we're not going to try to position them. But the organizations who are taking this as an opportunity to differentiate from their competition and yes, in this instance, using project44 and our movement platform, are the ones who are positioning themselves to win in this complex and difficult market. So thanks very much, everyone. Appreciate your time today.
Eric Fullerton [00:27:12]:
Thank you for listening to Supply Chain Champions. To get connected and learn more, visit project44.com and click the link in the comments. To subscribe to project44's newsletter, tune in, get smart and move forward.