In today’s volatile trade environment, businesses that rely on physical products face a vexing question: should they hold their products at ports to sidestep potential tariff hikes, or bring them in swiftly to avoid delays and rising costs? The uncertainty surrounding tariffs — driven by shifting political priorities, trade negotiations, and economic pressures — has left companies scrambling for strategies to achieve their operating plans and protect their bottom lines. The decision isn’t easy, but if you’re trying to keep costs in check and hit delivery deadlines, it’s one that most startups can’t afford to get wrong.
The Tariff Tightrope: Why the Decision Matters
Tariffs, essentially taxes imposed on imported goods, can significantly inflate costs for businesses reliant on global supply chains. For startups, where margins are often razor-thin and cash is king, that kind of hit can be brutal. It’s also worth noting that it’s not just the decision-making company that is affected by whether products are held at port or shipped — partners and clients are all part of the chain.
In recent years (and certainly in recent weeks), trade policies have become increasingly unpredictable. Some founders are considering holding shipments at ports — either overseas or in transit zones — hoping tariff rates settle down or that they get clearer intel before clearing customs. It’s a strategy, sure. But like most things in startup life, there’s risk.
Why You Might Want to Hold
1. Cost avoidance: If a business anticipates a tariff increase — say, a jump from 10% to 25% on imported steel — it might calculate that delaying entry until the policy is clarified could save millions. For example, a $10 million shipment facing a 15% tariff hike would incur an additional $1.5 million in duties. If holding goods at a port costs significantly less, it might be worth the wait.
2. Flexibility: Holding goods offshore gives you optionality — something startups often live and die by. If things change in one market, you might be able to reroute your inventory somewhere else. This is particularly relevant for businesses operating in multiple regions. A clothing retailer, for instance, might hold a shipment in a port near Asia and later divert it to Europe if U.S. tariffs spike unexpectedly.
3. Buying Time: Businesses with strong relationships with suppliers or governments might use the delay to lobby for exemptions, secure better terms, or explore alternative sourcing options. In some cases, trade disputes resolve quickly and waiting a few weeks could mean importing under more favorable conditions.
But…Holding Comes with Real Risks
1. Daily port fees stack up fast: Ports charge demurrage fees for containers that linger beyond their allotted free time — often just a few days. These fees can range from $50 to $200 per container per day, depending on the port and region. If you are working with a tight budget, that can become a cash drain really quickly.
2. Delays can kill momentum: Got a launch planned? Need to hit a seasonal timeframe or target? Holding goods at a port could lead to stockouts, missed sales, or production halts. For perishable goods like food or pharmaceuticals, delays risk spoilage or expiration, rendering products unsellable. Even non-perishable items, such as seasonal merchandise, can lose value if they miss their market window — read: nobody wants Christmas gear in January.
3. Ports are not storage units: Ports are often stretched to capacity, especially during peak seasons. Holding goods ties up valuable space, potentially causing bottlenecks that ripple across the supply chain. In extreme cases, ports may refuse to hold containers, forcing companies to bring goods in or reroute them at additional cost.
4. Waiting for nothing: Tariffs are notoriously unpredictable. Let’s say you hold back, anticipating a tariff hike and then…nothing changes. You’ve paid port fees, delayed delivery and potentially given your competitors a head start.
Why You Might Just Want to Bring It In
1. Certainty matters: Once your goods are through customs, you know your cost. No surprises. This allows you to make accurate cost calculations, pricing adjustments, and financial forecasts.
2. Keeps your supply chain intact: Delays are risky, especially if your operations are still maturing. If you rely on just-in-time delivery, even a brief disruption can halt assembly lines.
3. You can still get scrappy later: Importing now doesn’t preclude future cost-saving strategies. Companies can stockpile goods in domestic warehouses, negotiate with suppliers for discounts, or pass some costs to consumers through price adjustments. You are just taking one big unknown (tariffs) off the table.
TL;DR
What should you do? Or what should you advise partners or clients? Here is a framework:
- Cost Analysis: Compare the potential tariff increase to the costs of holding goods (demurrage, storage, and opportunity costs). If holding fees approach or exceed potential tariff savings, importing may be the better choice.
- Product Type: Perishable, time-sensitive, or high-value goods are less suited to delays. Durable, low-value items might tolerate holding better, especially if tariff savings are significant.
- Market Dynamics: Assess demand and competition. If delays risk losing customers to rivals, importing promptly is likely wiser. Conversely, if demand is flexible, holding might be viable.
- Policy Clarity: Monitor trade negotiations and policy signals. If tariff changes seem imminent and severe, holding could make sense. If the outlook is murky, importing avoids prolonged uncertainty.
- Supply Chain Resilience: Evaluate your ability to absorb delays. Companies with robust inventory buffers or diversified suppliers may have more flexibility to hold goods.
Maybe It’s Not All or Nothing
In practice, the best strategy might blend both approaches. Some companies bring in a portion of inventory now to keep things moving and hold back the rest until there is more clarity. Others investigate insurance or trade advisory services to help hedge against risk. And don’t underestimate a good collaborator like an association, logistics provider or even competitors to help negotiate feed, find less expensive holding options, or reroute shipments in a pinch.
Conclusion: No One-Size-Fits-All Answer
There is no perfect (or easy) answer here. The right call depends on your cash position, risk tolerance, and how mission-critical the shipment is.
Ultimately, you must stay nimble. Keep tabs on trade news. Talk to your freight partners. Start-ups thrive on being agile. Use that to your advantage — for your own shipments or as you weigh in on decisions with partners and clients throughout your supply chain. That adaptability will make all the difference as you weather the import storm.
To Hold or Not to Hold: Navigating Tariffs and Port Delays in an Uncertain Trade Landscape was originally published in Revolution on Medium, where people are continuing the conversation by highlighting and responding to this story.