Turning Tariff Turmoil into Trust
It’s common for companies to worry about supply chains, and the current environment makes it more worrisome than ever. Extreme weather events, tariffs and other potential disruptions can occur/ change within hours, often long after your shipment has left the port.
Such was the case last year for several home care manufacturers in China Jiaxing Zanyu Technology and Hunan Resun. From the time their orders of Shell NEODENE® and Shell NEODOL® were shipped from the United States, the world changed overnight and then changed back again.
Problem:
China-based home care product manufacturers Jiaxing Zanyu Technology and Hunan Resun faced huge cost increases while their cargo was in transit, as the Incoterm was Cost, Insurance, and Freight (CIF), requiring them to bear the risk once the cargo was loaded.
Knowing our customers could not afford/accept the goods with an additional 125% tariff charge, Shell Chemicals’ team went to work. The sales and supply teams looked at various options to mitigate the costs for our customers, including working to alter port rotation, maybe to Korea or Japan, as it was believed that the US and China would quickly resolve the tariff issue, but timing was key.
Port rotation was not an option
So the team looked to help customers explore local bonded storage tanks, which could hold the cargo for up to one year to give our customers time for the two countries to come to terms.
As luck would have it, two countries worked out a temporary trade agreement and jointly issued a 90-day pause on the tariffs and the Shell NEODENE and Shell NEODOL orders were received during that time.
Today, more than ever, you need a supplier that will work with you, like Shell Chemicals. We have been helping our customers achieve their goals for more than 90 years.
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