When you signed up with that US-based EDI provider three years ago, it was a solid business decision. They offered competitive pricing, proven infrastructure and a reliable "set and forget" solution that would handle your electronic data interchange (EDI) needs efficiently. These providers have served the global market well for decades.
However, the new US tariff policies are creating unforeseen ripple effects that even the most established providers couldn't have anticipated.
The "set and forget" trap
EDI is one of those business services that becomes invisible when it works well. You set it up, connect your trading partners and let it run in the background while you focus on growing your business. It is precisely this invisible nature that makes it tricky when external factors start affecting your costs and operations.
Most Australian businesses using US-based EDI providers haven't given their setup a second thought since implementation. Why would you? The monthly bills come in, you pay them and life goes on.
But this passive approach leaves you vulnerable to exactly the kind of economic and political disruption we are seeing now.
The real impact of US tariffs on your EDI operations
1. Unavoidable cost pressures
The most immediate challenge Australian businesses are experiencing is cost escalation, and this isn't necessarily anyone's fault. While tariffs might not directly apply to digital services, US-based providers are experiencing increased operational costs across their entire business ecosystem. Even the most customer-focused providers face difficult decisions about passing these costs along to maintain service quality.
When combined with currency fluctuations, you could be looking at a 20-30% increase in your EDI costs over the next 12 months. For a business processing thousands of transactions monthly, this represents a significant budget impact that probably wasn't foreseeable when you signed your original contract.
2. Data sovereignty concerns you never considered
When you chose that US-based provider, data sovereignty probably wasn't top of mind. Now, with increasing protectionist policies, you might find yourself caught in regulatory crossfire. What happens if new US policies restrict how Australian business data flows through their systems? Suddenly, your "simple" EDI solution becomes a compliance nightmare.
3. Resource allocation challenges
US-based EDI providers are dealing with complex domestic policy changes that require significant management attention and resources. While these providers remain committed to their international clients, the reality is that addressing domestic regulatory and policy challenges naturally becomes a priority.
This can result in longer response times for support requests or delays in implementing new features that international clients need.
4. Supply chain chaos
Your trading partners are feeling the same pressures. Those suppliers and customers you are connected to through EDI are adjusting their operations, dealing with their own cost increases and potentially restructuring their trading relationships.
This creates a domino effect of disrupted EDI message flows, delayed orders and operational headaches.
Considering local alternatives
The current situation highlights the potential advantages of working with providers closer to home. This isn't about choosing inferior alternatives - many Australian EDI providers offer world-class solutions with features that are particularly relevant during periods of global economic uncertainty:
Predictable pricing in AUD: No currency conversion surprises or international banking fees eating into your margins.
Data sovereignty assurance: Some providers, such as Pacific Commerce, ensures your business data stays in Australia, governed by Australian privacy laws and regulations.
Local support when you need it: Support teams in your timezone who understand Australian business practices and regulatory requirements.
Economic stability: Protection from foreign political and economic upheaval that could disrupt your operations.
Industry-specific expertise: Deep understanding of Australian market requirements, particularly in sectors like healthcare and retail.
Weighing your options
While your current US-based provider may continue to deliver excellent service, it is worth considering the potential challenges you may face in the light of current economic conditions.
The prospect of changing EDI providers can feel overwhelming, but modern Australian providers have streamlined migration processes. Many offer:
- Parallel running during transition periods.
- Dedicated migration support teams.
- No upfront setup fees.
- Flexible pricing models that scale with your business.
The bottom line
Your EDI solution should provide stable, predictable service that supports your business growth. By exploring local alternatives, you are ensuring your business has the most suitable solution for the current global environment.
Consider reviewing your EDI infrastructure proactively, while you have the time to make informed comparisons rather than reactive decisions during a crisis.
Your future self - and your CFO - will thank you for it.
Do reach out to us if you have any questions related to EDI. We will be more than happy to assist you in evaluating your options and next steps.