Benjamin Franklin once famously said nothing is certain except death and taxes. Well, in 2025 the logistics industry can expect a new certainty - The imposition of new US tariffs on an unprecedented scale and scope.
The new US presidential administration has made one thing clear – a new round of aggressive, across-the-board tariffs on imports are coming fast. While the specifics have not been announced, the situation is likely to remain somewhat fluid as negotiations to reach multilateral agreements with global trading partners are ongoing. In many cases the rules will be implemented immediately, and without the benefit of detailed information or advanced warning.
While many importers are “frontloading” import volumes to hedge against additional costs or disruptions, that’s only a short term solution. It’s less a question of “if” and more “when” the new US administration will implement additional tariffs, where they will be implemented, and their scope.
The workload on the global freight forwarders and customs brokers will likely create additional burden on an industry that is not prepared to handle it.
The process of classifying a product for import is already extremely time-consuming, requiring an army of licensed brokers to sort through documents, figure out rates, duty payments and other regulations and then produce compliant entries for submission to DHS. This level of administrative overhead is why the US customs brokerage industry is a huge $5 billion industry in the USA and $23 billion globally.
The looming imposition of broad, politically motivated new tariff rules is not something that can be overlooked. Failure to comply will result in fines, delayed shipments, and potential legal exposure. The key problem is that there isn't a vast, untapped pool of licensed, trained workers on stand-by that can be brought in to take on the extra workloads that a policy change of this magnitude creates.
A key question must be addressed: Is it possible to boost a customs team's efficiency by 20 to 50 percent without hiring and training an equivalent increase in brokers, especially amid a talent shortage? The answer is no.
But recent advancements in technology may provide the tariff life-boat that will give importers a chance to keep their import supply chains running.
Unlimited digital Scale and Agility
Artificial Intelligence is still in the early stages of maturity in logistics. Many of the emerging use cases being reported today demonstrate significant improvements in human productivity as AI takes on the previously manual, high volume administrative tasks that historically consumed so much of teams’ time. Doubling production, without adding headcount is now possible, thanks to AI.
Customs teams have always been burdened with an unrelenting flow of information that is unstructured, and usually delivered via email. In order to create entries, teams must open email attachments, locate the data needed from commercial invoices, packing lists, bills of lading, parts numbers and rules, and then rekey it into other systems. AI is now handling this for a number of brokers, which frees the vital human assets to focus on high value issues - such as dealing with the overhead of sweeping new tariff regulations.
In one example, Masterpiece International, stated that AI automation from Raft customs automation technology is saving them more than one thousand hours per month.
What can AI do for customs processes today? Quite a bit, actually. It can help:
- Extract data directly from documents, reducing errors and audit frequency;
- Increase processing times, more shipment volume and higher revenue;
- Drive faster clearance velocity;
- Enable more compliant filings, reducing penalties; and
- Allow for proactive management of customs duties.
A $100 Million Problem (and Opportunity)
The complexity of import customs already costs shippers dearly. For large freight forwarders, manual processes create data errors, which then cascade into financial penalties and additional overhead to make corrections.
The introduction of new tariffs, particularly under proposed policies, has several impacts on customs operations in the U.S. and Europe. Raft models reveal that manual information management for an import volume of 1 million shipments—marked by inaccuracies and delays from manual data entry and rekeying—can result in a $36 million hit to the bottom line.
Key drivers include:
- Increased customs workload: Higher tariffs necessitate more detailed customs declarations and increased scrutiny of imported goods, leading to longer processing times at ports.
- Compliance costs: Importers (BCOs) may face higher compliance costs due to the need for additional documentation and potential custom audits related to tariff classifications.
- Trade policy uncertainty: Frequent changes in tariff policies create uncertainty, complicating customs planning and operations for importers (BCOs) and freight forwarders.
- Impact on trade volumes: Tariffs can lead to reduced import volumes as businesses adjust to higher costs, affecting overall customs revenue.
- Retaliatory measures: New tariffs may provoke retaliatory tariffs from trading partners, further complicating customs processes and impacting trade flows.
It’s not hard to imagine the financial impacts could swell beyond the $100 million mark for the large freight forwarders and customs brokers.
AI may have arrived just in time for the era of aggressive, evolving tariff wars between political friends and foes alike. But business needs to keep running and AI-enabled technology may now be the only viable path forward.