How logistics visibility can help navigate tariff uncertainties

Of the numerous international tariffs announced yesterday by US President Donald Trump, the 25% tax on cars made outside America, which could come into effect imminently, could be one of the most impactful for specific global supply chains. 

How can real-time transportation visibility (RTTV) help automakers and logistics providers to respond with precision, not panic? And how does your supply chain leverage the benefits of reliable ETAs in such turbulent times?

As a context reminder, the US administration has announced this 25% levy kicked in yesterday, April 2, as part of Trump’s “Liberation Day” suite of tariffs. Timing and details are as follows:

Source: Automotive Logistics

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As Reuters has reported, the impact could be huge, considering half of the cars sold in the US last year were imported, according to GlobalData. And as tariffs also apply to the US components of vehicles made outside the US, a truck built in Mexico with 45% US parts, for example, will still face a 25% tariff on 55% of its value.
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What does this mean, in concrete terms? That vehicles arriving once tariffs are enforced can remain in a bonded terminal or foreign trade zone (FTZ) without being immediately nationalized (customs-cleared). But tariffs will still apply, unless:

• The entry date (Customs Form 7501) is filed before the tariff goes into effect, and the vehicle remains untouched, unmodified, and properly documented in a compliant FTZ or bonded warehouse
• Duties and tariffs are applied based on the date of entry (i.e. when customs clearance is initiated), not the arrival date or the physical location alone.
  
  

Compounding the problem, China announced April 4 that it would impose tariffs of 34% on all US goods, as of April 10.

Supply chain crises are opportunities to invest for smarter execution

How can the impact of such major shifts be lessened, and prevented from becoming a crisis? It’s now clearer that logistics agility is no longer a “nice to have”. It’s essential. Indeed, it's a competitive advantage, especially as pressure on global supply chains increases, as shown by the GSCPI graph below…

What does this graph show?

Source: Federal Reserve Bank of New York – Global Supply Chain Pressure Index (GSCPI)

The above index measures stress in global supply chains, combining data on:

• Shipping costs
• Delivery times
• Backlogs
• Inventory levels
• Freight volumes
• Global manufacturing data
  
  

> Negative values = Below-normal pressure (i.e., easing conditions, lower congestion, more fluidity)

> Positive values = Above-normal pressure (i.e., delays, bottlenecks, congestion, rising logistics costs)
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Recent trend breakdown

• March to November 2024: Blue bars show negative pressure, meaning the global supply chain was recovering. Congestion and stress were easing
• Early 2025: Still negative, but less. A plateau.
• Mid-to-late 2025 (forecast): rebounds into positive territory, suggesting a return of pressure highlighted by the grey bars. 

In other words, from a transportation and logistics perspective, supply chain managers should expect drops in pick-up and delivery reliabilities, commitments, potential new congestions and capacity bottlenecks.

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What’s causing the rebound? 

1. 25% Tariff on Auto Imports 
   
   • The global automotive sector is rushing to ship vehicles, clogging ports, and overloading certain trade lanes
   • Logistics providers are reallocating capacity, creating regional imbalances
   • “Last-minute” shipping leads to vessel bunching and port delays, resulting in rising pressure.
     
     
2. Retaliatory Tariffs from EU & Others
   
   • Trade disputes over steel/aluminum and autos add uncertainty and compliance bottlenecks
   • Manufacturers start rerouting, restructuring supply chains, or reshoring production, all of which require new logistics setups, often resulting in inefficiencies at first.
     
     
3. Carrier Capacity Imbalances
   
   • Carriers divert vessels from low-demand lanes to US-bound lanes, creating regional capacity shortages.
   • This mirrors what happened during COVID: a high concentration of flows leads to asymmetry and backlogs.

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What this means for the automotive sector

The immediate challenge for automakers with vehicles already in transit is how to manage these shipments given the new tariffs. For example, Volkswagen has temporarily halted rail shipments of vehicles from Mexico and will hold at port cars arriving by ship from Europe, a recent report said, citing a memo to retailers.

Potential variations and delays aside, the focus must switch to determining the appropriate value of the foreign-made portion of the vehicle. In practice, this means that the Customs House Broker (CHB) will attempt to work with their manufacturer customers to determine the actual “foreign” value associated with the vehicle. Given that parts are designed and manufactured in the USA and around the world, the total value of the vehicle is not the value that should be used for assessment of the tariff. 

CHB and manufacturers will attempt to mitigate the value of the vehicle, but subtracting the value of the goods where a tariff should in fact not be applied - such as those parts which are made in the USA - will drive down the assessed value and therefore the related tariff. 

Simultaneously, car manufacturers must look to determine whether they can:

• Manufacture more cars and/or associated parts in the USA, as soon as possible
• Quickly evaluate if their lower-cost cars remain saleable given the new tariffs and, as needed, pivot to higher-priced, higher-margin vehicles that can possibly more readily absorb some additional tariff related costs. 
• Manufacture more parts in the USA, or have their suppliers do so.  Effectively relocate sourcing.

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None of the above is painless or easy: all moves will be challenging to implement.

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How to get prepared now!

Firstly, the bad news… If you don’t already have a real-time tracking solution that provides precise ETAs for your goods currently in transit, it might already be too late. Vehicles and parts en route without clear visibility are at immediate risk of facing unavoidable tariffs, potentially triggering substantial and unplanned financial losses or tensions with your customers that can impact their next batch of orders. Without accurate visibility, your teams are essentially operating blind, limiting your ability to take last-minute corrective actions, like rerouting or rapid customs clearance.

Secondly, the good news… at least some of this unprecedented upheaval can be anticipated and worked around. Fortunately, there are clear steps you can take right away to regain control and minimize the impact. Here are some key steps to follow.

1. Audit your global flows

A crucial first step is to identify your most critical trade-lanes, namely: Asia->US; Mexico->US; EU->US.

2. Choose a visibility provider with proven RORO (for VINs) and CONTAINER (for DKD/SKD/CKD flows)

…not forgetting Inland FVL & FTL tracking capabilities. The provider must support VIN level architecture, port congestion data overlays, hand-over and booking workflows, as well as Dealer Portal capabilities, with alerting mechanisms. An FVL Damage reporting-capable mobile application is an optional but highly useful extra.

You’ll also need to start tracking the transportation in real-time at VIN level, as well as all material flows (all modes), when possible down to Component level; in real-time or near-real-time; as the logistics plans will be totally disrupted because of the production mix changes.

Naturally, Shippeo supports all of the above, and then some!

As the Logistics Flow Pilot of a leading global OEM told us recently, “with RORO tracking visibility from Shippeo, we spotted in advance a batch of VINs around Veracruz, we rerouted them to Houston, and cleared them before the cut-off. No tariff hit, at least for the VINs on that vessel..”

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3. Integrate with your ERP/TMS/CMS for financial synchronization

Real timestamps allow for smarter accruals, better alignment between ops and finance/accounting.

4. Start your Data Quality improvement journey, leveraging key carrier partners & Data Quality experts

With the right approach, you can reach high 90%-levels in terms of data completeness, accuracy and latency metrics.

5. Use data for scenario simulations, leveraging AI

Developing simulations will allow you to develop what-if responses to new tariffs, border inspections, or customs policy shifts. Which recent experience suggests can happen on a regular basis…

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What if my goods get stuck?

In the coming days and weeks, shippers and transportation providers will need to navigate a highly volatile tariff environment. This is because the imposed duties can fluctuate rapidly and significantly in either direction. In response, some shippers may decide to halt shipments altogether. Some others might face increased difficulty in tracking their in-transit inventory.

As planning has never been so complex, times like today call for continuous feedback, right from the execution phase, with regards to lead times.That’s where Shippeo data comes into play.

Even before live tracking begins, as soon as a shipment is created, Shippeo’s predictive ETA is made available. It leverages the cleanest transportation dataset ever built in the transportation industry, and applies AI and real-time context, such as congestions and other external risks (strikes/accidents/weather) to dynamically calculate when your shipments are expected to arrive, as soon as the goods are ready for pick-up at the consignors.

This pre-execution visibility gives you more control over inventory-in-motion, even under rapidly changing trade conditions as you can know how many goods will arrive at your warehouses at each day of the month. For the goods that are stuck in Containers, there are Demurrage and Detention fees that will likely increase, especially on the export side.

So to anticipate the next phase of supply chain disruptions: book a demo now to learn more about Shippeo’s D&D Cost Monitoring tool that will strengthen links between your planning, operations and procurement teams.

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