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Freight forwarder and logistics company Flexport has teamed up with BlackRock to provide $250M in financing for Flexport customers struggling to deal with the rising costs of importing goods to the U.S.
“Global trade runs on cash flow, and too many great businesses fall behind simply because they can’t fund the gap between when they buy inventory and when they sell it,” Flexport Chief Financial Officer Stuart Leung said in a release.
Financing from asset manager BlackRock will be overseen by Flexport Capital, the logistics company's financial services arm. Flexport Capital has provided more than $2B since its 2017 inception.
Rising global trade costs have translated into higher demand for term loans, financing to offset tariff costs and even asset-based lines of credit to fund the period when products go from being an order in a factory to a customer delivery, Bloomberg reported.
“We’re seeing everything from 15% increases to 150% to 200% increases [in tariff bills] in some cases,” Brian Barber, a customs broker at U.S.-Canada trade specialist Willson International, told The Wall Street Journal.
But it isn't just tariffs. Several duties and costs of importing are stacking up, creating a layer cake of new expenses that importers are finding hard to swallow.
Most companies have a short window in which to pay their tariffs once their products have come into the U.S., but they may also have to grapple with higher customs insurance costs or new expenses due to the elimination of a duty exemption on shipments valued at $800 or less from China, the WSJ reported. The exemption will be eliminated globally at the end of August.
In May, London-based bank HSBC launched a loan product specifically tailored to importers needing to cover the cost of tariffs incurred by shipping things into the U.S.
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