Road Freight Markets Down; Tariff Engineering Resurgence
By
Willis
·
1 minute read
The US has been experiencing a road freight recession for nearly 40 months, with no clear recovery in sight. The recession is expected to continue as the market still has excess carrier capacity and low load volumes.
For truckers, this means LTL shipments, given their flexible size, may be the method to maintain rate increases.
For brands, shipping in higher volume FTLs will be the way to maintain economies of scale as usual.
Brands using LTL will likely pay a higher price per pallet—even though the broader freight market remains weak. Stakeholders in trucking and shipping should evaluate LTL carriers with disciplined rate strategies and consolidation momentum as a relative “safe haven” in the current climate.
https://theloadstar.com/us-road-freight-recession-persists-how-to-play-it-in-ltl/
Companies are increasingly using a legal method known as “tariff engineering”—making subtle adjustments to product design, materials, or how items are classified—to qualify for lower import duties under the U.S. Harmonized Tariff Schedule .
-One brand tacked cubic zirconia onto a pin, averting a 14% tariff since the item shifted from the festive article category to jewelry. “The value attributable to the cubic zirconia was significant enough [and] it was a relatively easy manufacturing change,” they said.
-Columbia Sportswear has always devoted thought to tariff engineering. For example, they’ve added zippered pockets to women’s shirts to avoid higher duties.
-It’s well known that shoe manufacturers have tweaked designs to categorize footwear as slippers instead of athletic shoes, reducing their tariffs due.
This engineering may rarely make sense for an electronics manufacturer, but it should always be in the toolbox if you’re importing apparel or shoes.
It’s not something to be done lightly: these changes must reflect a commercial reality and not just be superficial to dodge duties . Some companies are seeking binding rulings from U.S. Customs to confirm their reclassification strategies—though an unfavorable decision could lock them into higher tariffs .