Every day, Sirdarryl Roundtree’s warehouse stores and ships products from all over the globe.
“In a perfect world, we would be at 100% capacity. We would be busting at the gills,” Roundtree, President of ZipShip, said.
However, it is not a perfect world. Roundtree said tariffs implemented over the past few months have started to change the buying habits of those he serves.
“Because the tariffs put such a cash crunch on small businesses, they are either hesitant to invest or they are really, really strategic on how they use their resources,” Roundtree said.
ZipShip focuses mainly on small and medium-sized businesses, providing storage and shipping services.
While many of the companies using his warehouse are local, the source products are from all over the globe.
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Roundtree said some customers who receive goods from China have seen the price of their goods more than double because of tariffs, and it has forced them to pull back on their orders.
“You are starting to see a sharp increase in their sourcing cost. If you had something that may have cost them $10,000, if you add the 145% tariff, it is much more expensive, and it trickles down the supply chain,” Roundtree said. “When our customers retreat, it’s a dip in revenue for us.
Roundtree is far from alone. Matt Fain is the CEO of Pop Capacity, which connects businesses to more than 1,100 warehouse sites. Their data shows an “approximately 32% slowdown” throughout the globe.
“All the product is moving outbound, and there is nothing to replenish it,” Fain said. “It’s all related to tariffs, it’s all related to the unknown.”
US ports are also feeling the effect.
“The number of docks at the ports of LA declined roughly 40%. And we expect to see a similar decline in East Coast ports in the coming weeks,” Emory Professor Nikolay Osadchiy said.
Osadchiy said the tariffs have reduced demand to bring in new products and led to some ships canceling trips or skipping ports.
He believes there could be a trickle-down effect that could impact consumers.
“It will take several months or at least a few weeks,” Osadchiy said.
“In my personal opinion, you might see the shelves become empty,” Fain said.
Fain, Osadchiy, and Roundtree all say they believe many businesses are waiting for clarity on the future of tariffs before making new orders.