In today’s unpredictable global market, businesses need flexible and resilient supply chains. With so much uncertainty surrounding tariff management and transportation costs in the geopolitical landscape, diversifying your supply chain isn't just smart. It's essential.
Diversification can lower your expenses, keep shipments on time, and mitigate risk.
Below, we’ll introduce eight ways to diversify your supply chain and explain the advantages of each approach.
Transshipment and less than container load (LCL) strategies are less direct shipment approaches but are helpful options for diversifying your supply chain and developing carrier diversity.
Transshipment provides you with a shipment path through intermediary countries with lower tariffs or strategic port locations. This involves shipping goods to a third country for processing or repackaging before delivering the product to its final destination.
The LCL strategy allows you to ship your smaller shipments with other companies in a single container. This helps decrease the cost of shipping since you are sharing transportation space with another company.
VinWorld’s proactive freight management includes custom transshipment and LCL planning, ideal for complex routing and cost control.
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It can be risky to rely on a single country for sourcing and manufacturing your company’s goods. Diversify your supply chain by establishing sourcing and manufacturing hubs in multiple countries.
Consider adopting a “China + 1” strategy, which involves adding an alternative manufacturing location outside of China to your supply chain. This could be Vietnam, India, Indonesia, or another location that protects your supply chain.
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Take advantage of FTZs and bonded warehouses. These resources allow your company to store your imported goods on U.S. soil.
These zones offer duty deferral, tariff reductions, and simplified customs procedures. That means you don’t pay until the product enters U.S. commerce. You can process, assemble, or repackage goods within FTZs to optimize tariff classifications and reduce overall costs.
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There are endless trade routes for transporting goods in today’s market. Explore alternative trade routes and ports that enable you to bypass congested or high-tariff regions. This could look like accessing smaller ports or inland waterways. When researching, assess emerging trade corridors that may provide shorter transit routes and lower costs, such as the Arctic shipping routes.
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Get better acquainted with tariff classifications. Or, better yet, work with customer brokers and trade compliance specialists. These experts can help you optimize tariff mitigations (i.e., tariff classifications) and minimize duty payments.
To avoid incorrectly classifying products, It’s important to review your tariff classifications. Misclassified products can result in a higher duty code.
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Adopt digital supply chain visibility tools and control towers that provide door-to-door transparency during shipments. These tools are designed to help you monitor shipments, identify potential disruptions, and optimize routing.
The data analytics in these tools empower you to identify cost-saving opportunities, be more agile in decision-making, and improve supply chain efficiency.
VinWorld’s 24/7 online dashboard and hands-on agent monitoring ensure constant visibility and real-time updates.
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Develop strategic partnerships to leverage a more cost-effective and efficient supply chain. These partners can share expertise, resources, or processes to help you achieve your common goal.
For example, a strategic partnership could look like a collaboration with shippers to consolidate shipments and leverage economies of scale. Some strategic partnerships to consider include logistics providers, freight forwarders, and customs brokers with expertise in diverse trade routes and tariff optimization.
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Be prepared and plan for disruptions in your supply chain. Many of the options we mentioned above will help you do that, including tariff management.
Disruptions—whether from geopolitical shifts or evolving trade policies—are inevitable. Developing robust scenario planning and risk management strategies helps you anticipate and navigate these challenges effectively.
Have a contingency strategy in place for when things don’t go as planned. That means, being prepared with alternate sourcing, manufacturing, and transportation options. Also, consider purchasing cargo insurance that covers a wide range of potential issues.
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Building a diverse supply chain for your business can be overwhelming. Luckily, you don’t have to do it on your own.
VinWorld is a global logistics partner that delivers personalized service, proactive problem-solving, and deep logistics expertise, which enables you to deliver your cargo on time and within budget. This includes keeping a close watch on tariff management and mitigation to ensure your business has the most economical approach to shipping your products.
To learn more, check out our services or request a quote today.