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Chris Parker: Hello everyone, and welcome to the Expeditors Podcast, where we look at the logistics and freight forwarding industry through the lens of a global logistics provider. I'm your host, Chris Parker, and today we are discussing how tariffs are shaping the flow of French exports into the US. We're also going to learn about what tools and resources are available to mitigate those changes.

With me today is Dana Lorenze our senior vice president of global customs at the Expeditors corporate headquarters, and Marc Rached, regional director of France, based in our Paris district office. Dana, Marc. Welcome back. It's good to see you all again. And. Yeah. Are you ready to talk about, what's kind of been a very interesting topic right now?

Dana Lorenze: Indeed.

Chris Parker: Before we get started, how have you two been doing? Marc, let's hear from you. What's been going on since last we spoke? What's going on in your world right now?

Marc Rached: Thank you for having us. Chris, always excited to discuss things that are moving the world other than freight that we are moving. So, yeah, things have been going pretty intense. So we've been very busy. We've had the Olympics last year, so, we needed to find another occupation. And today we're pretty busy with being with our customers, talking about tariff changes, about sourcing, shifting. So it's been exciting.

Chris Parker: Lot going on. And, Dana, from a global perspective in your world. Well how's up? Are you sleeping? Are you getting enough sleep?

Dana Lorenze: I would say I could always use more sleep. I guess earlier wakeup calls, mainly so I could keep working out and possibly doing yoga to balance myself because I'm not so balanced these days. I will say, as a trade practitioner, we're having no end of content and people interested in these topics.So yeah, it's definitely creating some opportunities to get closer with our customers. And feeling like customs is absolutely a part of trade in the world.

Chris Parker: Yeah, now more than ever, now more than ever. I mean, I feel like that was a lesson that was being learned well beforehand. Especially around like, stability, around resiliency, during, like during Covid and such. And now it's around compliance. It's very important topic. So let's go ahead and start then with establishing a baseline here. Would you help me understand what is the state of tariffs right now in France when exporting to the US?

Marc Rached: That's an excellent question because I think this is what's keeping our customers pretty busy. The answer has changed throughout time. So what we knew last year is definitely not what we know today, because there's been a lot of changes. I think one of the complexities is keeping up with all the new tariff announcements that come up. So we have different sectors in France. You know, France is a major trade partner with the US. On top of our exports is the aviation. Then we have the luxury and pharmaceuticals, and each of those industries has a different tariff that applied on imports into the US. And many of those have changed in the past months. And still changing.

Chris Parker: Dana, let's hear from you.

Dana Lorenze: So my answer is really from a global perspective. And obviously France as a big exporting country and the US is a big importing and exporting country, right? Our countries actually have a lot of trade anyway. So this isn't new, but the complexity and the amount of detail that you need to have further upstream has been something that all our customers struggle with, quite frankly, in that the information at a very in-depth level goes beyond where the goods made and sourced, but by whom and how far up the supply chain can you gather the information that is needed in order to properly declare?

So both operations in the US, in France are very mature. Our customers are extremely well known multinationals in a general sense, and they have a history of doing business globally. I think the unique position these days is how much immediate information must be supplied at the time the transaction is taking place and ongoing to support the continuous amendments and changes as the tariff situation continues to progress.

Chris Parker: So what kind of trends then are arising out of that? Because, you know, you've established here that trade relationship between France, the US is very stable. It's long, storied. There's a there's a patina to it. I would imagine that it's just very predictable. And so because it's been so long standing, is that working against being able to mitigate those changes, right now with tariffs? And what are you seeing French companies doing? What positions are they finding themselves in as a result of this?

Dana Lorenze: I'll take a stab at it first and then I'll pass it on to Marc. So from my perspective again, more global in specific country related is that because longstanding trade has been in place for years, the rules of interaction and engagement are actually good.

I mean, it's not like you're just learning how to do importing and exporting, but the difference is, is the amount of information that's needed in a particular transaction on one end has multiplied because without an import or export in the past was based off for the same information that's provided today. Generally speaking, the derivative values or the exact sourcing information needs to be more accurate, needs to be more timely, and needs to be more thorough than ever before.

And I think the opportunity for that very strong relationship between France and the United States, the United States and France from just a customs import perspective, is that the information that we need to validate is just more meaningful at the moment that it crosses the border, right now more than ever.

Chris Parker: Yeah, absolutely. Marc, let's hear from you then. Any trends that you're seeing with how French companies are exporting into the US as a result of these tariffs? What's changing? What's what's been the demands?

Marc Rached: The observation is that it's been very dynamic as changes in the past months. And, what the companies are observing is that shift of required expertise as an exporter, you are required to understand what are the impacts of your inputs to the US.

And this is something that's been a little bit unusual, and you don't have that cognizance or that knowledge that resides in France to know, hey, how should we adapt as an exporter? What should we do to become a compliant importer? And that information, where the changes and the regulations are shifting and changing rather rapidly, requires the French companies to be very agile and to look for resources that can accompany them and how to process their shipments correctly.

Chris Parker: So then Marc, do you know how that's resulting in strain on French companies, like what are they experiencing as a result of that? The expectations are higher, the needs are higher, the flexibility is higher. But what is it resulting in an impact to companies?

Marc Rached: The impact on the companies is they have to be agile in their decision making. They have to source internal external account. So companies are now required to decide quickly on their exports to the US. They have to source consultancy and seek support, in order to adapt to the new regulations in the US.

Chris Parker: When I'm hearing between the two of you, it's that these are longstanding relationships. They've been stable, reliable. But if that's the case, then wouldn't they be already well positioned to mitigate and to be able to anticipate changes like this? What is really the factor here that's causing such a greater ripple or a greater concern for companies than it has in the past? You know, when I think of a strong relationship, I think a strong foundation, right? If an issue happens, it can be handled. The house is still strong because it has a strong foundation. So how is that different for right now?

Dana Lorenze: So I think the key differential Chris, having a mature trade lane if you will, is beneficial in one way. And then in terms of the House reference that you just made, when you have a house that's strong, and you have a storm, you might be able to protect that house by putting on an extra awning or, you know, putting a cover up that actually is a more protective coating. I would say that what companies are doing right now is that they're really digging into that knowledge based approach. Because, well, knowledge is always valued in general sense. I think that that's a universal thing that, you know, speed and accuracy and knowledge may be understated in what, people say they need because you assume that they exist in times where you require great adaptability in a complex environment with constant change, that foundation not only needs to be unquestionable, but actionable and obvious in a difficult time.

And I think the challenge to all companies that are in the midst of this trade complexity is that what you used to be able to do over a period of time with some level of grace? You have shorter periods of time and greater needs for change. While that tests really experienced folks in times where companies make decisions to invest in one way or another way, right now we're seeing that the intent to focus on trade is to support visibility, accuracy, and timeliness.

You don't have a grace period now. And so I think working with trusted partners is the only way. There are, of course, and I know you'll ask, technology, tools and things that you can do to bolster that up. In addition to all the tools it might be available, you have to start with a framework of knowledgeable expertise. Quite honestly, those companies that have invested all these years in compliance and trade knowledge are faring much better. Those that have not that are just having to catch up, have to rely on a lot of extra resources in order to make sure that they are on the right path.

Chris Parker: Right, absolutely. Marc, anything to add to that? What is the strain that you've been seeing on, in your conversations with French customers? But also just like companies in general?

Marc Rached: To Dana's point when customers are really looking to broaden or to increase their expertise in the subject, as said, there's no grace period. There's no trial period. They need to do it now, today and not tomorrow and not in one week.

So building that expertise has been very important, gathering that knowledge and making sure that it's a sustainable way of approaching the trade changes, with the US, some companies have had that maturity. Or maybe they have the infrastructure and they build around it. Some are outsourcing and are looking to have the right resources that can support them.

Chris Parker: So Marc, let's talk about those tools and resources. What would you say is available right now to stay informed and ready and nimble?

Marc Rached: The topic has been hitting the news a lot. So there's been a lot of information that's available, whether it is coming from the government entities, it's providing more data and transparency on what are the impacts of the trade. What are the industries that are impacted? European Union has also been very active in communicating, the recent changes in tariffs that are being applied. So, customers are really busy in getting this information. Making sure to validate the source of the information and working towards, integrating those new changes in their operations.

Chris Parker: All right, Dana, what about you? And from again, from my global perspective here, what did you found that has been the most helpful for, for companies?

Dana Lorenze: Yeah, I think number one is staying informed continuously. And, you know, companies who value it and have an infrastructure have had to even broaden their scope. And I can say we have as well, we have been holding webinars that have like 50,000 people attending them. And they're strictly instructional and educational. We know it's not a marketing event. It is literally here's how you stack the tariffs. Here are the rules that need to be applied. Here's what to do upstream. Because we're all figuring this out together. And in that discussion point with and alignment with experts talking to experts, there are sometimes still gray areas.

And I feel like trade and compliance are now working a lot more integrated in companies, whether it's throughout the supply chain, up in the C-suite, throughout the logistics realm, or other aspects of the enterprise, that it is not just the customs people that need to be the knowledgeable experts. You need to know how things are sourced. You need to know how they're made. You need to know how you assign a value to things. And that's always been important. But now it's even more critical and it needs to be done in a level of orchestration that has never existed in a supply chain up to this point.

Chris Parker: And with those changes here, like help me understand a timeline when do we, as a customs broker, learn of these changes compared to when a customer would learn about them, like tariffs?

Dana Lorenze: Yeah, I think there's no end of news. And that's also part of the, I guess, richness of the current situation. There's also a lot of misleading news or there's a lot of interpretation from an announcement to the actual implementation of the rule to the classification of what's needed to confirm that rule. There's just a lot of churn in that area right now.

So a best practice for trade for our customers, for the industry, for what we're trying to do, is you have a group of people that are calling the news and they're sifting through what's actual fact, and we try to stay away from conjecture, what the new regulation says and what is evidence of that regulation in action operationally. And I think if we all communicated that level broadly throughout the organizations in trade, the effectiveness of that and the level of transparency is iterative, quite frankly.

And then you learn from that for the next time there's another trade action. And these are not infrequent now. So I feel like it is just a virtuous cycle, if you will. Maybe, maybe not always virtuous, but a cycle. And, that it is the world that we're living in today. There’s no being done in this case. It's sort of right, making sure that you are at the right place at the right time for the thing that has happened, and that you were gearing up from a programmatic way, from a process way, and from a communication way. And that's the way I think we all navigate this complexity. At least that's our advice to ourselves, and our customers, and our employees.

Chris Parker: Wanting to go back to, again, this talk of these tools and resources. Marc, I was really curious to hear what hasn't worked, what is not working for for companies, really. You know, they've been so reliant I mean, hearing from Dana, what you're saying is you need to know what is going on inside within your company regarding your sourcing and such, so you can have those conversations with your broker. And your broker needs to be fluent and, and needs to be able to interpret the stuff as cleanly as possible so that fumbles cannot happen down the line when it comes to, you know, avoiding fumbles and and other mistakes and such, what has not been working or what has been most successful right now for, French customers?

Marc Rached: I think the best scenarios or the best thing is when they don't guess or speculate of what is going to happen, but rather how to deal with those changes. And having an internal structure today that can become knowledgeable. Always learning. What are the type of changes? What are the trade changes that are happening? I think one of the good things that is important and that we're seeing also in the shift of behavior is when we have today finance being included in those conversations to see what's the impact on their budgets, on their sales.

So we have more and more people, stakeholders that are coming into play and coming into the picture. We see that there's more and more collaboration with destination, with the destination countries, with the broker at destination and taking the right decisions at origin. So it's seeking out the experts, in the supply chain at origin and at destination of the transporter and collaboratively, making short-term plan, mid-term plan, and long-term plan. It's all about, what if scenario, what will happen if such and such changes or if that changes? So I think this is what's mainly when companies are mostly successful, when they prepare two different scenarios and don't take it just for granted that, okay, we just have to deal with this today. So things are changing, are changing fast, and it's that agility that is required today to stay in the market.

Chris Parker: So then going back to what you're saying about building a short-term, mid-term, long-term plan, what are the mechanisms that are out there right now to assembling these different kinds of strategies.

Marc Rached: So if we look at short-term today, you have to adapt to the current tariff changes and make sure that you're compliant to whatever those changes are. Then on mid-term, what companies are looking for is how to minimize the impact and how to ensure in a very compliant environment, developing their knowledge further into what are the trade agreements that exist? How can you benefit? What are some of the elements today that are unknown to them that could be beneficial to reducing the impacts of those tariffs? With utilizing a free trade zone and have advantages for those exporters? Are they really benefiting from all the programs that exist in the US to reduce the impact of duties and taxes?

Chris Parker: Dana, what about you?

Dana Lorenze: Yeah, I think in the past there was an overreliance on very few people that were sort of quiet in the communication front and that experts just did what experts do, and they do the work, and they sort of disappear into the background, generally speaking. I think in the current environment, what has been made clear is that knowledge in an organization is much more useful when it's collaborative and aligned and not siloed, and that those are just words at this point. But, relying on someone else to do your job or to do the job of a compliant importer or an exporter. Yeah, that was sort of, previous thought in previous eras, like, hey, I just rely on my broker, I just rely on my freight forwarder. And I think the companies that are the most successful are the ones that take an active ownership in that and orchestrate pulling in experts where they need them, utilizing across enterprise solutions to be able to really drive to not only the benefits that can be gained, but the risk mitigation in trying to avoid the pitfalls, right?

And you know, when I said try to avoid predicting what might happen, I feel like you have to from a resiliency, assume that there might be multiple scenarios on how it could play out, and being somewhat more adept and flexible in doing scenario planning, but not betting all in on an area over another. So that takes a level of skill set within an organization that is beyond a one channel mode. And those companies that are truly investing in a partnership with their suppliers, in a partnership with their customers, in a partnership and understanding the value chain period will be the most successful in going forward. And I feel like lessons that we're going to be learning now will pay off in the future. But the risk is higher if you don't learn the lesson fast.

Chris Parker: Yeah, absolutely. Marc, you were talking about the aerospace and fashion industries in France. Like I just want to know a little bit more of like France, just like what is unique about them that makes any of this kind of planning more difficult, if anything?

Marc Rached: For those industries, in particular aviation and high fashion, there's a funny way, a sense of urgency in getting those parts and freight to the markets. So it is always speed to market. It has to be there. There's a high demand always for those products. And those companies as well benefit from having that structure today that allows them to service different regions and different markets. There is certain awareness of the complexity of the markets that they need to serve and, agility in which you need to adapt to the rapid change. Those industries in particular, are more equipped today to, find the solutions or quickly rather than other industries. What I mean by equipped is they have the infrastructure. They just need to grow that knowledge, grow that expertise within their teams.

Chris Parker: All right, well then last question, for you, Marc, in kind of extending off of that was what kind of intro conversations teams should be having to get more aligned and ready for the next trade action to come?

Marc Rached: Well, understanding that the responsibility is shared across the borders. I think earlier nowadays, and especially in France, we would think of the job ends of the exporter once it's on board the aircraft or on board the vessel. Things have changed now, rapidly changing. And that responsibility is shared among all parties. So that collaboration, understanding that everyone is responsible for the success of their imports and export will help definitely create better alignment.

Chris Parker: And then, Dana, I mean, we’re now sitting here talking about brokers. Like I'm thinking of, insurance brokers or life insurance brokers or real estate and stuff, like when I'm thinking of a broker, I'm thinking that's just someone who will just take my need and just they'll take care of it, they'll handle it. You know, I don't need to know more. But what I hear you saying is, I need to know what's going on on that side. Right? I need to be talking with my broker more, especially with customs here. I need to know what's going on in order so that I can be ready to change things on my side. What other conversations do you feel like teams should be having to get more aligned and prepare for that next trade action?

Dana Lorenze: I think the upstream awareness is critical and relying on expertise is always a good idea, but putting blind faith that someone else has it without your involvement, it’s not a good idea and not great business anyway. But when you're actually talking about brokerage, it's funny, because customs in the United States, as an example, requires a bond in order to do a significant volume of imports in the US to basically clear customs so that the duty will be paid. Those bond saturation levels are happening faster because there is a higher level of duty, and so that financial impacts to companies is more immediate.

And you do need someone anticipating and watching. And there's something different between working with a partner who works together with you, or takes 100% ownership for something that is really, really going to impact another company. So Marc you’re right. It is a value chain, a supply chain in sort of that integration between the links has always been important, but now is critical. And I think it's also a conduit, right? So what you get on the front end affects the back end. And what affects the back end will help make the front end better in the future. So I think that these lessons are actually oddly positive in some way. And assuming that we all get stronger and that our organizations work better together, that speed to market won't have to be the thing that is risked in doing things accurately and compliantly upstream. So really, that methodology actually secures more consistent delivery of customers, more accurate reporting, etc., etc. So still I'm optimistic that navigating this is a challenge, but will be better in the long run.

Chris Parker: Dana, Marc, thank you so much for taking the time to talk with me about this. I really appreciate it. Good luck out there. Thanks for everything you do. It really sounds like it's a wild time.

Dana Lorenze: It's our pleasure. We love to talk about trade and supply chain.

Chris Parker: And maybe get some sleep too after it. After you've been talking so much about it.

Thanks for listening to today's episode. If you've got questions or want to learn more about today's topic, check out the show notes for more information.

And before you go, make sure you're subscribed on whatever podcast app you're using so you won't miss the next episode. To learn more about Expeditors, you can find us on LinkedIn, Facebook, Instagram, and Twitter/X, or simply visit us at expeditors.com. Take care and I'll see you next time!