Weekly Logistics Roundup: Rising Tariff Follows New Fears; Trucking’s Last Mile; Financing a New Shift

Weekly Logistics Roundup: Rising Tariff Follows New Fears; Trucking’s Last Mile; Financing a New Shift

August 09th 2019

The weekly roundup centers around the rising Tariff Fears imposed by the United States. Trucking Giant Schneider is winding down its Last Mile, and a New Shift is currently ongoing at Celadon Group Inc.

Latest U.S Threats

Electronics giants, Toy producers, and retailers are fully bracing up for the pending tariff-driven shock expected to hit the consumer marketplace. Recent threats from the United States President, Donald Trump, looks to offer more tariffs to all Chinese goods importation coming to the U.S.

The tweets from Trump has vividly intensified it already existing trading conflict with China. The new rates are now poised to hit the wallets of all U.S. customers interested in Chinese imports. Multiple reports concerning the proposed tariff (that seeks an additional 10% tariff) would fully be implemented by September 1.

The new tariff is expected to cover the $300 billion import market of Chinese goods into the U.S. alone. The new tariff comes as an addition to the already imposed tariffs on the $250 billion in China’s importations. It would also spread further into its retail division, increasing the costs to a wider variety of consumer products.

The new tariffs come surprisingly during the peak shipping time of year, with millions of products already packed into thousands of vessels. The already packed shipments lined up for delivery to the United States could experience speed up in its delivery before September 1. These deadlines could also see other importers accelerating purchase delivery to aid more products supply before the costs escalate.

Last Mile Shift for Trucking Giants, Schneider

The last mile demonstrated to be too pricey for Schneider National Incorporation. The truckload transportation company is closing what it termed the “First to Final Mile” service. The service was incorporated three years ago, starting with two procurements. The truckload carrier highlights the gap amid freight business motivations and reality in a final-consumer delivery marketplace.

This delivery marketplace is currently led by rising e-commerce demand. And the growing willingness of customers to purchase bulky good like appliances and furniture online is on the rise. The new desire also experienced in more similar items going into this channel for residential delivery. But such request from final consumers is now a puzzling piece for big trucking firms. It bears a similar resemblance to the rising e-commerce package delivery request also troubling parcel carriers.

Delivery experts believe home deliveries are expensive to execute. Also, Experts says the labor-intensive package can be time demanding, making it challenging to keep drivers and trucks on schedule. Schneider National Inc. seeks to place more emphasis on its essential industrial services while employing pretax restructured charges as it gradually closes this line of business.

Financing a New Shift

Celadon Group Incorporation receives a new financial backing as it makes efforts towards a New Shift. The new turnaround is lined up for even more significant transformations. The troubled truckload hauler confirmed a $165 million financial backing support that comprises of credit facility and new loans.

The reports show the deal comes with an additional provision that may allow an unnamed shareholder to get a stake in Celadon Group Inc. This stake is expected to fall below an ownership stake of 50%. The carrier is attempting to make a right shift after its recent history faced certain troubles. Such troubles include overhauling of its management resulting from exposés over false financial declarations.

The new management is seeking to rebuild its operations and says the new funds would aid Celadon to change its aging trucks alongside securing new equipment. The trucker may not receive much assistance from the bigger marketplace as other competitors reported lighter earnings in the last quarter. Competitors were quick to highlight slippage in demands and prices as compared to what was obtainable in 2018.

QUOTE

“We have put together a contingency plan and are working closer with retailers to make sure we mitigate the impact.” —Mattel CEO Ynon Kreiz, during an interview prior to the announcement of the new tariff.