With the price of oil dominating headlines, costs for shoe firms are likely going up — but by how much may not be known for another three months.

In a Tuesday webinar hosted by the Distributors and Retailers of America (FDRA), president and CEO Matt Priest noted that there are at least 25 different inputs where oil is a direct part of the process that is used in footwear. These include thermoplastic polyurethane and other types of foam that into cushioning, polyvinyl chloride, polycarbonite, synthetic textiles, polyester fabric, nylon fabrics, to name a few.

“Oil is used pretty prevalently within our products. Now, does that mean prices are going up right now as we speak for inputs? The answer to that is not necessarily,” Priest said.

What he is finding from speaking with FDRA members right now is that they are seeing fuel surcharges being applied on containers to the tune of $275 to $375. “Most of the big companies have contracts that help weather these types of things and have the impact to be a little less,” he said.

Many brands in past earnings conference calls note that they have year-long contracts with ocean carriers, but those contracts tend to get renegotiated typically during February and March, with the new pricing structure getting reset at the start of the next year-long contract.

Priest said air freight is now “significantly elevated,” with jet fuel prices up “75 percent month-over-month.”

“So, if you’re air freighting something into the U.S. market because you have a hot item or you’re speed-to-market [and] you’re trying to get that product to the consumer more quickly particularly ahead of the [Passover or Easter holiday] shopping season, you’re going to see elevated prices from an air freight perspective,” the FDRA CEO said, adding that spot rates for smaller firm not locked into contracts could see additional surcharges ranging from $400 to $1,000.

Priest raised the possibility of how some within the upstream supply chain network could begin to “claw-in” additional costs because of concern that prices for oil could stay elevated over a longer period of time. He also said that while brands and retailers have been putting pressure on the suppliers to keep prices down so consumers wouldn’t see higher prices due to the rise in tariffs, he’s had a number of [FDRA] members who have said their “suppliers [are now] asking me for additional money.”

He expects a timeframe of two to three months before an increase in component prices becomes evident. That timeframe is because most Tier Two and Tier Three suppliers keep between two to three months of supply on hand. “And so as they work through that, we should have a better understand of what the cost increase might be for components,” he said.

Priest said there could be anywhere between a three to five to seven percent increase just on the components that go on the shoe, which would “really drive up prices,” adding that tariffs are assessed on the FOB price on the declared value of the shoes as it crosses the border.

He explained that if prices for components and inputs go up, that’s going to increase the price of the shoe. And when one adds the additional tariffs, that will result in a percentage off a bigger base that would create a higher duty dollar value that’s assigned.

Priest also noted the new Section 301 investigations launched by the U.S. Trade Representative that target two areas, excess production capacity and forced labor. The probes appear to be the next phase of new tariff actions following the Feb. 20 ruling by the U.S. Supreme Court that the reciprocal tariffs imposed by U.S. President Donald Trump in April 2025 are illegal. For now, there is a 15 percent duty imposed under Section 122 of the Trade Act of 1974 that runs through July 24.

He also provided an update of the refund process for those who paid the illegal tariffs, with the Customs and Border Protection working with the Court of International Trade to set up a portal to provide the refunds electronically.

He estimated that there are “53 million entries [and] 330,000 importers of record” that paid the illegal IEEPA (International Emergency Economic Powers Act) tariffs. FDRA has advocated that its members sign up for direct deposit so their accounts are in place to receive their refunds, and Priest said that about 7,000 have signed up. He noted that so far only 21,423 entries have completed the setup process to receive their refunds electronically, and importers who fail to complete the process will see their refund claims get rejected.