Months of uncertainty about solar panel logistics in the US came to an end recently as the US government declared a 24-month tariff exemption for solar panels imported from Southeast Asian countries. In this article, we’ll examine what happened, what it means for importers, and how a third-party logistics (3PL) company can help.
Solar panel logistics in the US: recent events
In recent months, the US Commerce Department has been investigating whether “imports of solar panels from Cambodia, Malaysia, Thailand and Vietnam are circumventing tariffs on goods made in China.” Solar panel imports from these countries had been frozen, which has delayed solar projects within the US.
While this investigation is still ongoing, President Biden’s declaration of a 24-month tariff exemption on solar panels imported from these countries effectively puts an end to the freeze. It also means that companies don’t have to worry about paying tariffs on panels imported during these 24 months at a later date.
This is big news as, according to Reuters, retroactive tariffs associated with the investigation could have been as high as 250 percent.
Depending on what happens with the investigation, tariffs could be re-implemented after the 24-month period. But, for the next two years, companies are free to import solar panels from Southeast Asia without fear of tariffs.
What the solar panel tariff exemption means for importers
These latest developments have caused importers to increase their solar panel orders in the here and now. One such company, Sugar Hollow Solar in Asheville, NC, has already pre-ordered panel imports for the rest of the year, according to ABC News affiliate WLOS. Doing so not only takes advantage of the recent exemption, but it also helps them receive product faster should supply chain shortages occur down the road.
As more companies adopt this “strike while the iron is hot” mentality, they’re likely to be confronted with the question of where to put all these imported panels.
Thankfully, there are many 3PL providers that specialize in warehousing and distribution of solar panels. Such a 3PL partner can provide the following services.
Warehousing services. 3PLs that perform the storage of heavy, industrial goods will have no problem handling solar panels. There are two basic 3PL warehousing models: public warehousing in which you pay only for the space and services you need, and contract warehousing in which an entire 3PL facility is dedicated to your operation. Your 3PL partner will manage your inventory, receive incoming product, and prepare outgoing product. Many 3PLs also offer climate-controlled storage.
Transportation services. In addition to storage and inventory management, a 3PL partner can help you get your panels into and out of the warehouse and on the move to their final destinations. Such services include drayage, in which your 3PL receives your containers at the port and transports them to its warehouse for storage or to the final destination. 3PL transportation services can also move your product from the warehouse directly to the job site.
Foreign trade zone (FTZ). Companies thinking longer term to a time when tariffs on solar panels may return may do well to consider an FTZ warehouse. Located in or near US ports, these facilities are under U.S. Customs and Border Protection (CBP) supervision but are considered outside of CBP territory. With an FTZ, product may enter the U.S. without a formal customs entry, without payment of duties or excise taxes, and without a thorough examination. It is only when the product enters the U.S. for distribution that these duties, taxes and tariffs are collected.
Rail transloading. A solar panel warehouse can be served by lower-cost rail as opposed to over-the-road trucking. At Kanban Logistics, for instance, our distribution campus in Rocky Mount, North Carolina is served by CSX rail. Our warehouse has rail siding to handle incoming or outgoing freight directly between the warehouse and rail cars. We also have a transload yard in which freight from center-beam cars can be unloaded or loaded.
Turn to Kanban for solar panel logistics
With campuses throughout Eastern North Carolina, Kanban Logistics is located right in the middle of one of the most booming solar-energy regions in the country. In terms of installed electric capacity, North Carolina is the number-2-ranked solar state in the U.S., second to only California, according to the SEIA.
Kanban has the capacity to handle high-volume solar panel logistics operations across over 1 million square feet of warehousing space in the region. And, should solar panel tariffs take effect again in the future, Kanban operates within an FTZ in Rocky Mount, NC.
To learn more about Kanban’s solar logistics capabilities, contact us today.