Flexport Customers Would Have Paid $13 Million More in Duties Last Year Under Section 301 Tariffs, Company Says

Flexport's clients would have paid about $13.6 million in additional customs duties if the proposed Section 301 tariffs (see 1804040019) were in place in 2017, the company's CEO Ryan Petersen said in a blog post. "While Flexport believes that global trade is absolutely essential to a free and prosperous society, our immediate focus in the coming weeks will be on the impact to our clients," he said. "We also believe these algorithmically chosen new taxes -- which were 'drafted to achieve the lowest consumer impact' -- are navigable by a resilient supply chain industry."

There's a variety of industries and products covered in the proposed product list and more time will be necessary to fully understand the impact if the tariffs are implemented, Petersen said. "In the total lifetime of our company, we’ve been privileged to ship over six billion dollars worth of our clients’ stuff," he said. "Looking at our proprietary data, had these same tariffs been in place in 2017, it could have cost 173 of our clients $13,641,334 in additional customs duties. Some of our clients will see the majority (or entirety) of their supply chains affected."

Flexport suggests the importers take a close look at their HTS number of imported goods to get a sense of volume that could be impacted. Importers should also consider whether an increase in duties would be absorbed or passed along and if there are other sourcing options, he said. It also could be worth looking at "fulfillment at origin, so that your products can be cleared through customs individually already consigned to the end consumer, which if the goods are under $800 per parcel, will exempt them from Customs duties altogether."