Tariff-driven price hikes may be hidden by products stuck in ‘the middle mile’

When both manufacturer price index and consumer price index still show acceleration, consumers may be wondering why the price of the goods in the board does not increase any more.

However, logistics experts warn that these higher prices are currently hidden in “Middle Mile”, known as warehouses and distribution centers, and have not yet come.

The Trump administration tried to get back and forth with the tariffs, to the importers to take their burdens forward to reduce these rates, this inventory was currently sitting in the warehouses.

Zachary Rogers, chief author of the Supply Chain Management Assistant Assistant of the Logistics Managers Index and Colorado State University, said that the increase in the inventory during the July news update of the Los Angeles Port is the reason for the increase in tariffs.

“We see price increases in children’s clothes, toys and such things.” He said. “But consumers have not yet seen a really impact of inflation because they are sitting in the Middle Mile (warehouses). I hope we will see that the inventories fell in September.”

Rogers said that retailers’ inventories usually reached the summit in the middle of October, but this year’s warehouse capacity was moderately expanded and the prices expanded the prices.

“Essentially, what this tells us is that the most intense season is realized.” He said.

Mike Short, the chairman of the global guidance in Ch Robinson, said that the Peak Season elements, which will move towards the store shelves for holidays, were pushed and hiding this year two to three months ago. However, compared to this peak season and last year, the skin is not so strong.

“We have seen customers who have to bring this inventory to their own distribution centers, and they actually have to carry this cost.” He said. “However, this (warehouse costs) go to the end consumer, whether it is really spread to the board, and this goes with tariffs, cost -by -cost costs. Our customers decide to do is really throughout the board of directors.”

Short said that they had active interviews about how to manage their inventories with customers and bring their burden on timely and efficiently.

“Together with our customers, the supply chain cost is becoming a line of line (profit and loss declaration), a meeting room C-sevi is becoming a speech.” He said.

The withdrawal of the load forward may be a reduction tool for avoiding higher tariffs, but as a result, the storage area has become more tightened, which has increased the prices.

Flexible warehouse company Flexe CEO Karl Siebrecht, the company’s business and middle market customers, some importers and distributors from the third quarter inventories to buffer the increasing storage demand to bumper, he said.

“They came earlier than typical to avoid tariffs,” he said. “At the same time, many retailers’ inventory levels, tariffs and the uncertainty around the consumer trust are wider.”

Siebrecht said that the stocks separated from the warehouses will begin to be shot in September and October, which will go to the distribution centers of retailers.

“This inventory then begins to flow in the next October and early November to store retail shelves and fill the E -commerce fulfillment centers for black Friday,” Siebrecht. “Retail stores and FCs continue until mid -range.”

This inventory accumulation is reflected in the activity in the most dense ports of the USA. Gene Seroka, General Manager of Los Angeles Port, said that the number of ships looking for the harbor for August is “really solid”.

“Less than July and less than last August,” Seroka said, “But this is due to an inventory accumulation. So we’re not the loser of a month, but really, we’ll start to see that the product is decreasing just because of all the inventory in the country.”

The view of the constantly changing tariffs also affected the supply chains. Vietnam, who won the China-one-one production strategy, is now facing a 30% transition fee. Short, this fee, with the latest 50% tariff in India, especially because it finds new places to send China’s products, he says shows how dynamic for companies.

Uz We see that the Navl is going more from China to Europe, Short Short said. He continued: “We see that Freight is going to Mexico more. We see that Freight has gone to Southeast Asia or stemmed from Southeast Asia. But to be honest, our volumes to the United States remained very stable and the future of the future, but the time when people began to talk.

If this supply chain situation results in higher priced products, it is unclear how consumers will react.

Bleakley Advisory Group CIO Peter Boocckvar said that consumers still have PTSB at prices from 2021 and 2022 increase and the general consumer confidence is “a reason for the pre-pre-level levels”.

“There is no patience for more increase in living costs, and people do not care if the tariffs are a possible step step in the price. According to them, it is another inflationary pain point by hitting more tariffs.” He said.