How Are Tariffs Affecting Contract Cleaning? What Leaders Need to Know

Contract cleaning professionals hold a vital role in upholding cleanliness and hygiene standards across various industries. The evolving global tariff landscape poses challenges for industry leaders, necessitating vigilance and agility to navigate these complexities effectively.

Global tariffs have the potential to significantly impact the cleaning industry due to its reliance on imported goods, such as cleaning supplies and maintenance equipment. These tariffs have created an unpredictable and dynamic environment, posing difficulties in adapting to rapid changes. Imported components essential for cleaning equipment and dispensers, gloves, mops, microfiber products, and other items have faced tariffs as high as 145% on Chinese imports, before a recent reduction to 30%.

Understanding the Current Situation

To address these challenges, it is imperative for contract cleaning providers to evaluate the current situation and comprehend the measures manufacturers are taking to ensure short- and long-term stability. Manufacturers are working diligently to adapt to tariff changes, adjusting pricing and timing accordingly.

Shipments from China were initially disrupted by the 145% tariffs but resumed following a temporary reduction to 30%. This interruption temporarily impacted the supply chain.

Companies are exploring manufacturing options and potential supply partners in other countries for raw materials and finished goods while increasing conversion processes within the U.S. Transitioning the supply chain from China to countries like Vietnam, Malaysia, and India aims to mitigate long-term supply chain issues. However, establishing new manufacturing facilities or additional supply partners requires time and may result in delays in product availability.

How Are Tariffs Impacting Specific Product Types?

To counteract the adverse effects of tariffs, contract cleaning professionals should concentrate on specific categories and products impacted by these changes.

Towel and Tissue

Pricing for towel and tissue products remains stable, as their production is largely domestic, shielding them from global tariffs. However, dispensing equipment will experience changes due to imported components.

Cleaning Chemicals and Skin Care

Cleaning chemicals are predominantly manufactured in the United States, which aids in mitigating the impact of global tariffs. Nevertheless, certain raw materials and specific systems sourced internationally may result in cost increases of approximately 5%. For instance, one chemical manufacturer currently operating in Canada is planning to relocate production to the U.S. to circumvent tariff-related expenses.

Equipment Suppliers

Equipment suppliers have been significantly affected by tariffs due to the importation of products for assembly within the U.S., or fully assembled machines, such as vacuums and scrubbers. Price increases for equipment range anywhere from 3% to 26%. It is crucial for contract cleaning professionals to closely monitor these changes and plan for future start-ups or machine upgrades by procuring equipment ahead of announced price hikes.

Janitorial Supplies

Many janitorial supplies, such as mops, microfiber cloths, gloves, and more, are imported and have seen price increases ranging from low single digits to over 20%. This category may face inventory challenges due to supply chain issues affecting inbound imports.

Strategies for Contract Cleaners To Mitigate Tariff Impacts

Despite the unpredictable landscape, there are several steps contract cleaning professionals can take to address the impacts of tariffs on their business.

1. Monitoring Tariff Changes

Staying informed about tariff changes is essential. Appointing an individual within the business to gather tariff-related information and scheduling regular calls with suppliers can help anticipate changes and adjust purchasing strategies accordingly.

2. Engaging in Strategic Planning

Developing a strategic plan to address tariff impacts is crucial for long-term success. Contract cleaning leaders should conduct a comprehensive analysis of their supply chains, identify potential risks, and create contingency plans to mitigate those risks. Being proactive and prepared enables companies to minimize disruptions and maintain operational efficiency.

3. Staying Active With Group Purchasing Organizations (GPOs) and Trade Associations

Joining a GPO, such as the NSA, or trade association, like BSCAI, offers benefits such as negotiated pricing, bulk purchasing discounts, and access to a network of suppliers. These organizations assist contract cleaning professionals in managing tariff challenges by providing updates on pricing fluctuations and supply chain shortages.

Staying Vigilant

Tariffs on imported goods have created a complex and uncertain environment for the contract cleaning industry. Rapid shifts in policies have resulted in unpredictable changes, affecting pricing, supply chains, and overall business operations. By understanding the current situation, focusing on specific categories, and implementing effective strategies, contract cleaning professionals can navigate these challenges and mitigate the negative impacts on their business.

Although the future may be uncertain, staying informed and proactive will empower leaders of this industry to overcome obstacles and continue thriving amidst adversity.