In 2025, the Trump administration’s tariff increase policy on China has officially come into effect, bringing new challenges to Sino-US trade. In this context, how to reduce transportation costs for customers has become an urgent problem for enterprises to solve. This paper will discuss effective strategies to reduce transportation costs from multiple aspects.
I. Contract Clause Optimization
In international trade contracts, clearly stipulating the bearer of tariffs is the key to avoiding cost disputes caused by tariff adjustments. For example, it can be agreed that the additional tariffs caused by the US “reciprocal tariff” policy will be borne by the buyer. For products with high technical barriers and irreplaceable overseas markets, enterprises can follow the example of Kunshan Yaxiang Flavors & Fragrances Co., Ltd. and take the initiative to increase the Delivered Duty Paid (DDP) price, and detail the adjusted price in the contract. DDP means that the buyer bears all costs from the factory to the buyer’s designated location, including international freight, insurance, customs clearance, and tariffs, and the goods are finally delivered in a “ready-to-use” form. In addition, if both parties negotiate to jointly share the tariff cost, it should be clearly stipulated in the contract in terms of sharing proportion and payment method. At the same time, to cope with the risk of cost increase caused by tariff policy changes, it is recommended to clearly stipulate a price adjustment mechanism. For example, when the cost increase exceeds a certain proportion, both parties should negotiate to adjust the price within a specified time. If no agreement can be reached, the price will be automatically adjusted.
II. Transportation Mode Adjustment
The choice of transportation mode has an important impact on transportation costs. Before the COVID-19 pandemic, sea transportation may have been a cheaper option, but considering the possible delays in sea transportation, air transportation options may save more costs in the long run. Less transportation delay also means faster delivery time, which helps to improve future customer retention rates and enterprise revenue. Enterprises should reasonably choose transportation modes according to the characteristics of goods and customer needs. For goods with high timeliness requirements, air transportation can be chosen; for goods with large volume, heavy weight, and low timeliness requirements, sea transportation can be chosen. In addition, conducting consolidation transportation is also an effective way to reduce transportation costs. It involves gathering small shipments from multiple shippers at the origin and shipping them as a single consolidated shipment to the destination, and then the freight forwarder distributes the individual shipments to the respective consignees.
III. Logistics System Improvement
Improving the logistics system can reduce transportation costs in multiple ways. Firstly, it is necessary to establish a modern logistics concept, introduce advanced logistics transportation management and optimization methods, and find the best ways to improve transportation management and reduce transportation costs based on the enterprise’s own reality. Establish a dedicated department for logistics transportation management to achieve specialized logistics management. Apply logistics activity-based costing (ABC) to accurately separate the data reflecting logistics transportation costs from financial accounting data and unify the cost calculation口径 (caliber, meaning “standard” or “methodology” here). Secondly, optimize the transportation system, reduce intermediate links, and lower transportation costs. For example, for goods that can be directly transported, direct transportation should be adopted as much as possible to reduce secondary transportation. At the same time, unreasonable phenomena such as convection, implicit transportation, circuitous transportation, repeated transportation, and distant transportation should be eliminated. In addition, measures such as improving vehicle loading rate, choosing the best transportation tools, and conducting load distribution transportation can also effectively reduce transportation costs. Load distribution transportation fully considers the factors of weight and volume, achieving the maximum weight and space utilization of goods loaded on transportation tools and improving the actual loading rate of transportation tools.
IV. Policy Response Strategies
In the face of the US tariff increase policy, enterprises should actively adopt response strategies. On the one hand, arrange the delivery time reasonably according to the tariff exemption period. For example, ensure that the goods are completed for transportation within the tariff exemption period to enjoy the tariff exemption. If the goods cannot be completed for logistics service within the tariff exemption period, the responsibilities and remedial measures of both parties should be clearly stipulated in the contract. On the other hand, considering that the tariff policy may lead to unilateral order cancellation or delayed payment by the US buyer, enterprises can set prepayment requirements or shorten the payment period in the contract, and add clauses such as “if the buyer cancels the order due to the tariff policy, the deposit will not be refunded” to reduce the default risk of the US buyer. In addition, enterprises can also add clauses in the contract to deal with changes in tariff policies, clarifying the exemption clauses when the contract cannot be performed due to changes in tariff policies, thereby reducing the legal risks of both parties.
