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WILD TURKEY

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WILD TURKEY

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Kansas-based Garmin, maker of highly-rated global positioning systems (GPS), became temporarily lost in February 2011—with $1.5 million worth of its Marine Navigation GPS units stalled in Turkish customs. Buried somewhere in EU trade regulations was a requirement that Turkish customs officials cited as a justification to hold the devices. As U.S. officials put it, the Turks believed the regs “required that these products be tested and certified at a third-party lab recognized by the European Union.

Untrue, said officials at the U.S. International Trade Administration’s (ITA) Market Access and Compliance (MAC).

Contacted by Garmin, the ITA worked with Commercial Services officials the U.S. Embassy in Turkey to remind that country’s custom officials of a law that transcends all others: not the Ten Commandments, but U.S. trade regulation, in which it has been decreed that such units can be self-certified by an accredited lab in compliance with EU standards.

The Turkish customs officials smiled, nodded, accepted Garmin’s certification and quit their hold on the product, shall we say, cold Turkey. Recent shipments have gone through without challenge, and Garmin expects no additional trouble.

— Patrick Dooley

 

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SHADES OF SUCCESS

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FOR IWOOD ECO-FRIENDLY SUNGLASSES, ACCIDENTS ARE A GREAT BUSINESS TOOL.

Steve McMenamin says his success was “a complete accident.” He needed laminated wood for comfortable, eco-friendly sunglasses, but when he arrived in the foyer of a nearby distributor asking about wood for eyewear, the receptionist nearly laughed him out of business.

Sixteen years later, Iwood is thriving—thanks in part to that awkward introduction. The wood laminator he was checking out had a lucrative niche: distributing to designers of interiors for private jets used by Hollywood’s rich and famous. The cackling receptionist accidentally caught the ear of a company executive who saw Steve’s odd request as a fantastic opportunity. It turns out the unused bits of wood were too small to be useful for the jets. Steve had stumbled upon a steady supply of the world’s finest woods—like Makassar ebony, zebrawood, bubinga. Steve used the cast-offs in the production of glasses he retailed through Barney’s in New York and Beverly Hills.

But Steve always had his eye on Europe. Fashion, he says, is “like the minors in baseball: You have to work your way up.” And Europe is the majors. After years on the domestic trade show circuit, Paris’ Premier Class would be like the World Series.

Just one problem: The odds of being accepted to the Premier Class show in your first decade are roughly equal to getting drafted to the majors out of junior high—unless, like Steve, you serendipitously bump into the show’s main organizers at a New York expo and they fall in love with your rare-wood sunglasses.

With their endorsements in his back pocket, Steve reached out to the federal government’s Commercial Services office in Indiana, home to Iwood’s manufacturing site. It was a smart move. CS staffers wrote the letter of recommendation that secured Iwood’s admission to Premier Class, and then gave Iwood a grant to cover booth space costs.

Iwood stormed Premier Class 10 years ahead of schedule. European Fashion magazines took note, and the glowing reviews that followed helped establish Iwood as a top-shelf brand in boutiques across many of Europe’s most fashion-friendly markets.

You’d think breaking into Milan’s Petti, the next great show, would be a lock. But officials from the U.S. Embassy in Milan, attending Premier Class, told Steve not to hold his breath: Petti, they told him, is for established brands only.

You can probably guess the ending: when he arrived back at Iwood headquarters five days later, an invitation to Petti was waiting on his desk.

So how did it get there? Call it an accident.

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Going, Going, Green!

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Going, Going, Green!

United Cargo Relocates to New State-of-the-Art Green Facility in Chicago’s O’Hare Airport

United Cargo is now operating out of its new 250,000-square-foot facility in Chicago’s O’Hare Airport. The state-of-the-art space boasts 53 dock doors and over 213,000 square feet of warehouse space, with three positions to accommodate freighter aircrafts, and a fourth position scheduled to be added by the end of the year.

United’s new digs are also capable of supporting special commodities with purpose-built environments for pets, high value items and human remains, and they’ve installed plenty of infrastructure for temperature-controlled storage. The company has also built a fully-automated mail sorting system capable of sorting “3,000 packages per hour to as many as 68 different flights simultaneously.”

Don’t plan on breaking in. The building’s security system has over 100 HD cameras recording and linked to United’s Skypoint system—plus they’re open 24-hours.

The new facility is eco-friendly from top to bottom. Measuring in at 109,000-square-feet, the building sports one of the largest vegetative roofs in North America. The warehouse also features high-efficiency lighting, plumbing and temperature control systems, many of which source recycled fixtures and components. The building takes care to keep low emissions with its ground equipment as well, using electric-powered forklifts and similar equipment.

“All of us at United Cargo at ORD are proud to work at the airport’s safest and most modern cargo facility,” says Rod Zimmerman, United’s Senior Manager of Cargo Operations at ORD.It’s gratifying that our new warehouse was built and is operated with not just the future of United Cargo in mind, but the future of the planet as well”

Shipping Safari

CaroTrans Starts Direct Charleston to South Africa LCL Services

Promising “Fast transits, competitive pricing, and superior support,” freight-forwarder CaroTrans has announced expanded LCL (less-than container load) service direct from Charleston to South Africa. The additional routes were initiated February 20th and offer coverage to all South African ports in addition to neighboring countries. The service is provided weekly.

“With this new Charleston to South Africa LCL service, we eliminate the long inland trip to New York providing a faster overall transit for our customers in the U.S. Southeast and Southwest,” says Mark Stowell, CaroTrans, Charleston Branch Manager.

The company says its transit time from Charleston will span 25 days to Durban, 30 days to Johannesburg, and 32 days to Cape Town. According to CaroTrans, their new LCL service to Cape Town is the only such service available anywhere today.

CaroTrans will once again team with their 20-year partner World Cargo Services, the first NVOCC (non-vessel operating cargo carrier) in South Africa to service the U.S. – South Africa trade lane. “By teaming up with World Cargo Services in South Africa, we are able to deliver the quality service our customers expect at origin and destination,” says Greg Howard, Global CEO, CaroTrans.

Cargo bound for South Africa will be routed from CaroTrans’ receiving stations in Dallas, Houston, Miami, Jacksonville, Atlanta, Charlotte, Memphis and Savannah to their Charleston gateway and consolidated before export. World Cargo Services will also offer expedited, secure unpacking services from their CFS (container freight station) facilities at all major South African ports.

 

Hey, Nice App

Encompass Launches First Mobile App for Greater Cargo Control

Encompass Global Logistics recently announced the launch of a free mobile application available for Apple devices and other major mobile platforms. The company, self-described as “a fast-growing 3PL that is ranked among the top 20 operators in the Transpacific trade,” becomes one of only a handful of logistics companies to provide the specialized service.

The new app is designed to give both importers and exporters greater control and flexibility over their shipments. “Shippers now can take charge of their own decisions, in the palm of their hand, to plan ahead, schedule the fastest transits and reduce any unnecessary shipping costs” says company CEO, Asa Cheng. “We are thrilled to be among the first international 3PL providers to offer a robust and content-rich, cross-platform mobile app that works with
any smartphone,”

Among the listed capabilities allowing shippers better control of their cargo are the options to track and trace shipments using Encompass’ proprietary information management services (IMS), known as Globe Trak; see the status of every shipment and create customized reports, such as exceptions to supply-chain milestones; and view a company’s background and look-up information about professional services such as transportation, consolidation and brokerage.

“We work in a business where product demand can change at a moment’s notice,” says Cheng. “Instead of being tied down to a computer, our customers now have the freedom and flexibility to access and track their shipments from anywhere in the world using this new mobile app.”

 

Sea Huggers

Horizon Lines Releases Green Initiative Progress Report

In March, Horizon Lines released a report on its “Green Initiatives,” detailing the progress of the company’s various efforts to lessen the environmental impact of its shipping and intermodal operations.

The report provides status updates of measures undertaken in the following areas: Fuel Conservation & Emissions, Low Sulfur Fuel, Clean Trucks, Biodegradable Oils, Oily Water Separator Upgrade Program, Cargo Hold Water Pumping, Ballast Water Management Program, and National Pollution Discharge Elimination System (NPDES).

“Ensuring sustained environmental protection has always been a mission at Horizon Lines,” says Stephen H. Fraser, president and chief executive officer. “Our approach emphasizes environmental excellence through conservation techniques, waste stream management, system upgrades and voluntary compliance.”

Over the past six years Horizon Lines has reduced overall fleet fuel consumption by 3.5 percent. The company estimates emissions have been reduced by 231,000 tons of CO2 during this period. Horizon Lines has also sought out fuels with lower sulfur content. Since 1999, Horizon has used fuels with less than 2.5 percent sulfur content for diesel and steam plants. The company is currently working to ensure it has an adequate supply of 1 percent sulfur content fuel oil in 2012, in order to meet the new requirements of North American ECA (Emission Control Area) which state such fuel must be used within 200 nautical miles of the U.S. coastline.

Various efforts are underway on land, as well. The company is a member of the EPA’s SmartWay initiative to reduce intermodal fuel consumption, and their California-based tractors have been compliant since 2008 with 2012 CARB clean truck rules. Additionally, the report says, “Horizon Lines has adopted a program to utilize biodegradable oils in select deck hydraulic equipment and vessel stern tubes to minimize the risk of pollution, should a leak occur.”

The full report is available at the company’s website, www.horizonlines.com.

To Russia With Parts

Senior Commerce Official Leads Automotive Parts And Components Trade Mission To Russia

Recognizing excellent growth in Russia’s auto sales, U.S. Commerce Department Deputy Under Secretary for International Trade, Michelle O’Neill, led an automotive parts and components trade mission to the country in April.

“Russia is the fastest-growing automotive market in Europe,” O’Neill said. “This important trading partner offers lucrative opportunities for U.S. auto parts and components manufacturers.”

Vehicle sales grew 30 percent in Russia in 2010, with the trend expected to continue at approximately 15 percent per year through 2015. In response to the increasing sales and growth potential, both Ford and General motors have set up assembly plants to meet demand.

Joined by representatives from 13 U.S. automotive manufacturing and service companies that supply parts such as fenders, gaskets and induction heating systems among many others, the group met with potential buyers in Moscow, Samara and St. Petersburg with the stated goal of helping to increase U.S. exports.

The mission offered an opportunity for participating firms to gain market insights, make industry contacts and advance specific projects. Additionally, the U.S. auto parts manufacturers were afforded one-on-one appointments with pre-screened potential buyers, agents, distributors and joint venture partners, a chance to meet with regional government officials, and other networking events.

 

Send your organization’s dispatches to editor@www.globaltrademag.com

Archives, Global Logistics, Ocean Carriers, Ocean Ports

SEA GREEN

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SAVING THE PLANET, IT TURNS OUT, MEANS SAVING CASH. OCEAN CARRIERS AND PORTS NATIONWIDE ARE CATCHING ON, AND SHIPPERS ARE FINDING IT EASIER TO JOIN ECO-CONSCIOUS AMERICA.

If you’re looking for a great example of a port and a shipper working together to cut carbon emissions, consider Portland. There, Columbia Sportswear teamed with the Port of Portland to dredge the Columbia River Channel a modest-sounding three feet. Now 43 feet deep, the channel can handle ships bearing more cargo—another 6,000 to 10,000 tons of cargo per ship. That means fewer vessel trips. And that, of course, means less pollution—and cost-savings for shippers like Columbia Sportswear.

Today, the apparel manufacturer contracts with the port to move all of its products—about 3,500 containers annually—from its sources in Asia to markets throughout the U.S.

Portland’s motives are simple to explain, says Noeleen A. Tillman, executive director of the International Institute for Sustainable Seaports (I2S2) in Arlington, Virginia. Like every other port, Portland “has its own geography, financial capability and overall mission,” she says. “But there’s a shared desire to implement programs that go beyond simply fulfilling federal, state and local regulatory environmental compliance.”

Ports, she says, balance on a stool with three legs. There’s economics, of course, and the social considerations of the people who work in or live around ports. Now, of course, there’s a third consideration: the environment.

“The trend now is not just a focus on the environment but on a holistic approach that embraces the economic drivers as well as the community,” she says. One way that “holistic approach” has been put into play is what Tillman calls the out-of-the-box approach taken by the eight ports that form the West Coast Ports Technical Committee.

The good news for shippers is that calls to protect the planet often produce savings that fall straight to the bottom-line. Saving the planet, it turns out, means saving cash. That’s pushing a growing number of U.S. companies to reappraise each link in their supply chains. Ocean carriers and ports nationwide are catching on, and shippers are finding it easier to join eco-conscious America.

An affiliate of the American Association of Port Authorities (AAPA), Tillman’s group met in Long Beach, California, in February to begin the process of establishing a baseline of common sustainable design and construction guidelines for maritime and industrial growth. If you’re a green-minded shipper looking to partner with like-minded ports, you’ll appreciate their work.

• The Port of Houston Authority (PHA) is currently investing $1 billion in new cargo and cruise terminal facilities at Bayport with its site selection, design, construction and operations plans based on minimizing the impact on the local community. “Crafting a strategy for future development that balances sustainability and our need to remain attractive to shippers with cargo to move is key to our overall plan,” says John Moseley, the port’s general manager of trade development.

• The nation’s first Clean Trucks program was instituted several years ago by the sister ports of Los Angeles and Long Beach. The plan has already taken more than 2,000 diesel-powered trucks off the road, reducing truck-related emissions by 80 percent. Both ports also blazed the trail for the use of Alternative Marine Power (AMP) that utilizes shore-supplied electricity to power a ship’s generators and reduce its diesel-engine emissions while in port.

• The South Carolina State Ports Authority is evaluating the use of cleaner fuels such as bio-diesel and ultra-low sulfur diesel by the port’s cargo-handling equipment, and recently launched a new voluntary program to help truck owners replace older trucks with newer, cleaner rigs.

• High on the list for the Port of Seattle is the reduction of air-polluting emissions and greenhouse gas (GHG) carbon emissions from all port operations by 50 percent from 2005 levels and “preventing sprawl” in less developed areas of Puget Sound by anchoring the region’s urban industrial land use.

But the very existence of ports would be meaningless without the ships that serve them—ships that, as one wag observed, “burn money, not diesel fuel.” With that in mind, how has sustainability effort shaped the relationship between ports and ocean carriers?

Ocean carriers operate on paper-thin profit margins, so “the key issue is the return on investment for the carriers,” says Tillman of 12S2. Fortunately for ocean carriers, as with other forms of cargo transportation, going green can often lead to savings in operational costs as well. So not only can sustainability initiatives help create positive feeling favor and win market share from like-minded shippers, they can also add to the bottom line. Some examples:

• APL has reduced its environmental footprint, including slow steaming and the use of emulsified and bio-diesel fuel, as well as such innovative technologies as ballast water treatment. “The key to our approach is assuring that we receive the best results for our environmental investments,” says Earl Agron, vice president of environment at APL.

• NYK is very active in implementing green technologies into its operations. In November 2007, the NYK Atlas became the first vessel in the NYK fleet to receive full shoreside power in November 2007 at Yusen Terminals, Port of Los Angeles. The company then began an initiative to install shoreside electric power units for its entire containership fleet.

• Last December, Hanjin Shipping introduced its supply chain carbon calculator. Shippers can access it to calculate the amount of CO2 emissions of their cargo per transportation segment—and in total—by inputting the origin, destination and weight of their shipment on the company’s website. “The calculator is helpful to retailers by offering the ability to evaluate shipping options,” says David Breen, air-quality program manager at the Port of Portland. “That knowledge enables them to make cleaner shipment choices for their cargo streams.”

• Maersk, the largest container carrier in the world, has developed various cleaner-fuel technologies that it says will not only reduce its carbon footprint, but could eventually lead to major savings on its annual fuel bill. The company recently entered into low-sulfur usage agreements at seaports around the U.S and the world, including at ports in California, the Pacific Northwest, Texas and Virginia.

The challenging economic climate, says the I2S2’s Tillman, “has had ports thinking that voluntary programs alone would steer carriers to competing ports.” But a few years ago, she says, there was a throw-down with ports offering incentives to attract carriers choosing to invest in green technologies and participate in their sustainability initiatives.

A prime example is the Port of Long Beach’s Green Flag Environmental Achievement Award, which is presented to individual ships when they attain 100 percent compliance with the port’s voluntary vessel speed-reduction program for a 12-month period. On the East Coast, the Virginia Port Authority offers a subsidy to offset increased fuel costs for carriers that use ultra low-sulfur marine gas oil or alternative power technology while their ships are moored at VPA-owned terminals. Maersk Line is the first carrier to take advantage of the program. Earlier this year, the carrier received $300,000 from the VPA to purchase the ultra low-sulfur marine diesel for one year. The fuel switch program will run for 13 months and eventually involve 41 Maersk ships that make upwards of 200 calls at VPA terminals every year.

But incentives aren’t just for ocean carriers. Shippers are also cashing in by partnering with ports that are greening their operations.

In 2009, the Port Authority of New York/New Jersey instituted an incentive program to encourage shippers to transport cargo via new rail routes. The port offers $25 per container to any company booking cargo on a railroad moving port cargo to or from specified rail origins or destinations, thereby reducing CO2 emissions. Not to be outdone, the Port of Los Angeles’ auto-import terminal, operated by Wallenius Wilhelmsen Logistics, became the first in the world to offer reduced tariffs and storage fees for zero-emission vehicles imported and exported through the 85-acre facility.

In addition to its fuel incentive for carriers, the Virginia Port Authority has created several tax incentive programs for shippers who move their cargo through the port, including tax credits for shippers who move cargo by barge or rail rather than by truck on Virginia’s highways; create new jobs or commit capital investment in the construction of international trade facilities as a result of moving cargo through a VPA-operated cargo facility; or manufacture or distribute manufactured goods (including processed agricultural products) that use the state’s public or private port facilities.

But perhaps the most effective program in the country to bring together these forgers of the global supply chain is the Coalition for Responsible Transportation (CRT).

Formed in 2007 in Sacramento, California, the group unites leading importers, exporters, trucking companies, clean truck manufacturers, logistics service providers, and ocean carriers who represent the largest, most progressive customers and service providers at U.S. ports.

The CRT’s green-conscious corporate members include Wal-Mart, Target, The Home Depot, Best Buy, Hewlett-Packard, JCPenney, Nike and Converse.

Through the group’s Clean Truck Initiative, the private-sector members of CRT are working in partnership with several of the country’s major ports to create “clean action plans” to develop and implement industry-supported clean truck programs that are both environmentally and economically sustainable.

“Every company is in business to stay in business and prosper,” says Thomas Phelps of Alloquor. “They’re learning that they can cut costs by reducing the number of links in their own supply chain and by working with partners along the entire chain that are genuinely trying to be more environmentally conscious.”

People see, he says, “that it’s the right thing to do.”

 

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PIONEERS OF DUSTY ROOMS

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Warehouses, Trans-Atlantic Trade, and the Opening of the North American Frontier

SALEM MASS MARKET
Their simple box represents a remarkable advance in global trade.

The story of westward expansion is among America’s most popular epics, a sprawling tale people, for better and worse, by the culture’s most enduring icons: native Americans, fur traders, loggers, farmers, soldiers . . . and warehouse managers.

Yes, warehouse managers.

During at least the first two centuries of European settlement the pace of westward expansion was in large part dependent on the settlers’ ability to market cash crops back in Europe; the ability to remain competitive in European markets while shipping goods from the edge of a frontier that was farther from the coast with each passing year depended on being able to cut the shipping costs incurred down the line, after one’s crop reached the Atlantic Coast. Between 1700 and the outbreak of the American Revolution, those costs fell by half without any technological change in shipping. A big part of the reason for the cost-cutting was the spread of warehouses along the East Coast.

WE OFTEN IMAGINE the farmers who cleared the western parts of, say, Pennsylvania or the Carolinas as self-sufficient folk who spent most of their time growing food for their own use. But two simple facts made most of those farmers dependent on the market—and particularly dependent on sales to Europe. First, most of them began their work lives deeply in debt, either because of the cost of their passage to the New World or the land where they lived and worked. Second, complete self-sufficiency was simply too inefficient, and the colonial market too small and diffuse to support much in the way of industry; so nails, cloth, and other necessities—not to mention such status symbols as mirrors, clocks, or tea—were generally imported. In return, Pennsylvanians and New Yorkers grew grain; Carolinians rice, naval stores, and later cotton; and Virginians and Marylanders mostly tobacco. The markets for most of these goods were volatile and competitive, so trying to produce them in more remote locations—farther and farther west—was a chancy business, unless costs could be cut elsewhere.

Basically, two sets of changes brought down shipping costs, even before the advent of either steam or improved sailing ships, and so made this rise in trade possible. The first came from the British side: the largely successful suppression of piracy in the eighteenth century. This not only cut insurance costs, but made it possible to send freight across the Atlantic in unarmed (or only lightly armed) ships. Such ships were cheaper to build and much cheaper to operate, because they could function with a smaller crew.

But this was only part of the story, and one that benefited the Caribbean colonies and Brazil—in some cases competitors of the mainland colonies—at least as much as the North Americans.

The other part of the drop in shipping costs came from reducing ships’ time in port. Sailors had to be paid for shore time in any port other than their home; they could hardly have survived otherwise. This made time spent acquiring a cargo expensive. Traditionally, that time could be quite long, because buyers had to visit each plantation, examine its crop, and dicker over price. In 1700, an average ship going between England and the Chesapeake tobacco country spent over 100 days per voyage going around the mouth of the river collecting cargo; port times elsewhere were similar, and similarly expensive.

The solution, in retrospect, seems remarkably simple: European buyers contracted with local agents who bought up desired crops in advance, warehoused those crops, and kept them ready to load when the European ships arrived.

At the time this was quite an innovative solution: merchants weren’t used to providing the scale of credit that such arrangements often required, or delegating that much responsibility for choosing what goods to acquire. Part of what made this possible in the New World, however, was precisely the narrow range of goods sought in any particular American location. A ship arriving in, say, Alexandria, Calcutta, or Canton faced complicated choices among commodities—was pepper a better buy this season than silk, or tea a better buy than either? Or given the need to stop off in Surat on the way back, might it be better to buy cotton, and figure on swapping it there for something to take back to Europe? But shippers arriving in Baltimore were buying tobacco and little else; in Charleston, rice, cotton, or maybe naval stores; in Kingston almost certainly sugar. Moreover, they were taking these goods straight back to Europe: unlike Old World commerce, there were no stopovers on the trans-Atlantic route where you might exchange part of this cargo for a different one. So decisions were simpler and easier to delegate, and those who saw that could greatly cut their port time.

Interestingly, it took the well-established English trading companies quite a while to figure this out: independent Scottish traders were the first to see the potential of financing Americans who would build and manage warehouses.

But it gradually became clear how much time and money could be saved—by 1770, port time in the Chesapeake was down to 50 days, much of which was needed for repairs anyway—and other shippers followed suit. As trans-Atlantic shipping costs fell, the volume of American goods demanded in Europe rose. But English ships exporting to America were partly empty, since manufactured exports, many of them luxury goods, took up much less space than bulky New World farm and forest products. Thus, they always had room for a new batch of European immigrants, immigrants who could now more easily move into the less crowded interior of the colonies, in part thanks to the quiet pioneering on the wharves and in the warehouses of the coast.

Steven Topik is a professor of history at the University of California, Irvine. With Kenneth Pomeranz, he is the author of The World that Trade Created: Society, Culture and the World Economy, 1400 to the Present (M.E. Sharpe).

Archives, Banking on Global Trade

BIG BANK THEORY

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The tools banks develop for their biggest clients are now available to you.

By Mitch Devine

Your good fortune began with the Wall Street financial collapse of 2008. That’s when many major banks, stung by the implosion in consumer banking—in risky mortgages and credit cards with sky-high limits and only modest minimum monthlies—began their slow return to the rock-solid business of business banking.

Business banking is where those bee-stung financial-industry execs figure the real money is—and not just any business, but export-oriented business.

“A cross-border company brings three times the volume of a purely domestic company,” says Mark Luppi, executive VP and head of business banking for HSBC.

Ditto, says Maureen Sullivan, head of North American trade sales for Bank of America Merrill Lynch: “Exporting is both an area of sustainable business for U.S. banks and a source of growth for the nation’s economy.”

Sullivan reviews the recent history: “For a number of years, higher consumer spending in the U.S. bolstered domestic demand and fueled economic growth. However, in recent years, net exports have become an important driver of economic expansion as the growth from foreign demand has exceeded domestic demand for goods and services.”

Her bottom line: “Conditions are ripe around the globe for a continued and permanent shift toward more exports.”

The Export-Import Bank of the United States (Ex-Im Bank)—the official export-credit agency of the United States—confirms the rise in exports. It reports that year-over-year growth of U.S. exports of goods and services over the past three years has been about 17 percent, exceeding the pace needed to meet President Obama’s National Export Initiative (NEI) goal to double U.S. exports by 2015.

Ex-Im Bank maintains that no international transaction is too large or small—that almost everybody can go global. And, sure, your neighborhood pizza guy could ship an XL pepperoni on dry ice anywhere you’ve got overnight shipping. But it helps to have a certain level of sales in order to be taken seriously by a reputable export-banking partner. Smaller banks may have a lower threshold, but Luppi says HSBC is looking for companies with a minimum of about $3 million in annual sales. “That’s our sweet spot.”

So, you’re ready for the banks. The question is: Which bank do you want?

“Given the complexities associated with embarking on an export growth strategy, companies need to choose the right strategic partner that supports an integrated approach of financing, risk mitigation and process optimization,” Sullivan says. “Such an integrated perspective and approach requires intellectual capital—experience and expertise in global solutions and local nuance.”

1. Financial Strength and Stability

Size matters. “Of crucial importance are the size of a bank’s balance sheet, its global credit standing and its ability to assume credit risk”—and not just on your behalf. The bank ought to be able to assume risk “on behalf of the buyer and the buyer’s bank, too,” says Sullivan. “Additionally, the bank should demonstrate reasonable and appropriate country-risk appetite to help mitigate supply chain risk.

“Global supply chains typically lengthen payment terms, thereby extending Days Sales Outstanding and applying pressure on cash resources,” she continues. “There may be incremental costs associated with exporting that require companies to increase efficiencies and have greater transparency about the underlying trade transaction. Companies looking to grow exports will need cost-effective and cost-saving solutions that increase efficiency around global trade and supply chain processes.”

HSBC has some of the world’s largest multinationals as customers; like most big banks, in handling those behemoths, HSBC has created some impressive infrastructure. It leverages that infrastructure to help smaller exporters. The bank’s financial analysts, for example, are in-house to support major players; they’re also available to help smaller exporters “plot out cash flow,” to take just one example, to identify what the smaller exporter will actually need to sustain business. So, imagine this team of well-trained, worldly finance people working on your global cash flow: “We want you to see the entire cycle,” Luppi says, “from taking an order, production to delivery.”

London Eye - Leverage your bank's overseas staffers to gather intelligence.

2. Global Reach

“Your banking partner should understand the markets you’re hoping to enter,” says Luppi. For instance, HSBC runs a global network of relationship managers: if you want to do business in a particular market, just ask and HSBC RMs will help you understand trade flows, available market share, cost of doing business, and the economic/tax/legal environment.

Your banking partner ought to have connections with local financial institutions, too. As Sullivan explains, an expansive network of correspondent banking relationships “enables your provider to extend reach beyond its physical footprint. Also vital are strong relationships with export credit agencies and multilateral agencies in multiple regions across the globe.”

3. Local Presence

“We’re in 60 countries,” Luppi says. “There’s a high likelihood that you’ll be introduced to an HSBC relationship manager working in your target market.” A local presence “really helps you know your customers” and understand key differences in culture. As an example, Mr. Luppi recalls how he “learned the hard way” that Indians regard “as an insult” the failure to return a call in one hour.

Connections should also include helping you become part of that bank’s local business community. “You never want to rely on one trading partner,” Luppi advises. HSBC’s RMs can help you “line up multiple partners,” he says. “We can help you uncover solid companies in that market.” It’s always good to have a Plan B.

Sullivan agrees: “An ideal partner knows counterparties on both side of a transaction (that is, buyer and seller) and can work to facilitate payment, mitigate risk, provide cost-effective financing, and resolve disputes that impede timely payment,” Sullivan says. “This requires an ability to obtain business intelligence though on-the-ground staff located in a buyer’s country and all around the world.”

4. Trusted Advisor

Sullivan says, “The ability to be a trusted advisor should span the range of trade services—from simple, short-term transaction to complex structured trade financing solutions. A bank should be able to apply its intellectual capital to replicate best practices around the world.”

As Luppi puts it, you want a bank that will become “an integral part of your team.” Luppi cites HSBC’s Forex services designed to track cash from date of sale to pay day. “I run into so many [U.S. exporters] that don’t even begin to think about their need for these services,” says Luppi. “And they shouldn’t have to. That’s why we’re here.”

5. Knowing What You Need Before You Ask

Both HSBC and Bank of America Merrill Lynch provide access to the Export-Import Bank of the U.S., the Small Business Administration, lines of credit, and more. And if you don’t know why these are important, that, too, is why you need a banking partner.

As Luppi puts it, “You shouldn’t have to ask for specific banking products or services. You don’t need to know what to ask for. Tell us what you’re trying to accomplish. We’ll handle it.”

He recommends simply telling your banker what you want—and don’t be afraid to bottom line it: “Try these five words: ‘I want to get paid.’ Let your bank handle the rest,” he suggests. “That’s what we’re for.”

 

Archives, Datebook, Departments

Datebook March-April ’12

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Our pick of interesting upcoming trade shows.

CIMES 2012 Exhibitors from 64 countries meet in Beijing, June 12, for China’s only machine tool event.

April 26, 2012

Encryption Controls.

This full-day program is an in-depth session that will focus on the unique provisions related to encryption under the Export Administration Regulations (EAR). Bureau of Industry & Security (BIS) licensing officers will cover a variety of topics, including Note 4 to Category 5, Part 2, various decontrols, encryption mass market provision (742.15), License Exception ENC (740.17), publicly available, encryption licensing, and foreign products developed from U.S. origin encryption parts and components. Crowne Plaza San Jose-Silicon Valley, Milpitas, California. For more information, call (408) 532-7234.

April 30, 2012-May 4, 2012

OTC 2012: The Offshore Technology Conference.

OTC 2012 will feature indoor and outdoor displays by major oil and gas companies and related subsidiary industries, equipment manufacturers and service providers of the latest technological advances in such categories as: drilling, exploration, fabrication, instrumentation & controls, environmental, marine, materials, oilfield chemicals, oil spill cleanup, pollution control, process, production, safety, seismic, specialized equipment, sub-sea exploration, survey, telecommunications, testing, tools, training, transportation, well completion, and work-over and wireline. The Reliant Center, Houston, Texas. For more information, call (972) 952-9318.

May 1, 2012-May 3, 2012

AMI International, Meat, Poultry & Seafood Expo.

More than 10,000 attendees are expected at this event, which will feature more than 500 exhibitors providing products and services to the meat, poultry and seafood sectors. Dallas, Texas. For more information, call (202) 587-4242.

May 2, 2012

WEBINAR:

The Basics of Duty Drawback. Drawback is the refund, reduction or waiver in whole or in part of customs duties assessed or collected upon importation of an article or materials which are used in the manufacture of goods your company subsequently exports. Your Company may be able to recover up to 99 percent of all Customs duties paid on imported materials contained in the manufacture of your product. Retroactively for up to 3 years. Washington, DC. For more information, call (202) 482-4422.

May 9, 2012-May 12, 2012

China International Metallurgical Industry Expo.

The China International Metallurgical Industry Expo will showcase the latest tool and processing products for companies operating in the Asia-Pacific region. The Western Bldg. of Tianyin Mansion, Beijing, China. For more information, contact the Secretary Office of the Organizing Committee, No.1709 Block C, Wan Da Plaza, B No. 18 Yard, Shijingshan Rd., Shijingshan District, Beijing 100040, PRC.

May 15, 2012-May 17, 2012

ELECTRIC POWER 2012.

Focuses on the needs of the power generation industry with a special emphasis on power plant owners, operators and project developers throughout the world. The trade show is complemented by the industry’s most comprehensive conference that features more than 500 speakers and panelists. The conference covers both business and technology issues and is programmed by a committee of approximately 150 industry experts. All commercially viable technologies and fuels (fossil, nuclear and renewables) are covered in depth. This high quality content attracts buyers and specifiers from throughout the world. Baltimore, Maryland. For more information, call (713) 343-1875.

May 23, 2012-May 25, 2012

West Africa Building & Construction 2012.

Exhibitors will be showing the latest equipment and services in the field of civil engineering construction and building for commercial uses and housing. Visitors to the exhibition will include consultants, architects, manufacturers, contractors, suppliers, federal and state government officials, as well as industrial executives responsible for building and construction. In addition, the conference will be attended by representatives of foreign aid and funding agencies, consulting engineers and other experts from all over the world. Abuja, Nigeria. For more information, call +44-1902-428766.

May 25, 2012-May 28, 2012

Home & Garden Dusseldorf.

Home & Garden Dusseldorf will offer the latest information and products in the international flower, garden and home decoration sectors. Grafenberg Racecourse, Dusseldorf, Germany. For more information, call + 49-451-89906.

May 30, 2012

WEBINAR:

Completing Certificates of Origin, FTA and eCertification. The Certificate of Origin (CO) is required by some countries for all or only certain products. Special certificates may be required for countries with which the United States has a free trade agreement (FTA). Some Certificates of Origin, including those required by Canada and Mexico under NAFTA, and Israel and Jordan, are prepared by the exporter. For textile products, an importing country may require a certificate of origin issued by the manufacturer. The number of required copies and language may vary from country to country. Washington, DC. For more information, call (202) 482-3787.

June 3, 2012-June 6, 2012

WINDPOWER 2012.

WINDPOWER 2012 is the world’s largest annual wind energy event. Held June 3-6, 2012, in Atlanta, Georgia, WINDPOWER is produced by the American Wind Energy Association, and is the premier wind energy event in North America. WINDPOWER 2011 hosted over 15,000 attendees, 1,100 exhibitors, and over 2,800 international attendees from 60 countries, the largest number of international attendees coming from Canada, Germany, China, Denmark and Spain. WINDPOWER 2012 will offer more than 60 educational sessions, industry workshops, and showcases new technology and solutions on the expansive show floor. Atlanta, Georgia. For more information, call (202) 383-2500.

June 12, 2012-June 14, 2012

PECOM 2012.

The 2012 PECOM and Energy Congress promises to deliver more content, more networking and more customer opportunities than any other petroleum-related event in Mexico. A major aspect of the congress is that all Petroleros Mexicanos (PEMEX) and the Federal Electricity Commission (CFE) personnel will receive complimentary admission to the exhibition and conference, giving them the unique opportunity to see the latest products, services and information that your company has to offer. PECOM 2012 and The Energy Congress will bring together key business and government decision makers and buyers from around the globe, and presents an opportunity to enter into or expand your current business in Mexico. Villahermosa, Mexico. For more information, call (713) 529-1616.

June 12, 2012-June 16, 2012

CIMES 2012.

CIMES 2012 is the only machine tool exhibition in China. CIMES 2010 was a record breaking exhibition with exhibitors from 64 countries meeting with 60,218 buyers to generate more than $284 million in sales. Buyers visiting CIMES 2012 will include professionals and decision makers from the following industry sectors: aerospace/aviation; defense; auto & auto parts; shipbuilding; railway; electrical power generation; metallurgy; telecommunications; chemicals; textiles; and printing. New China International Exhibition Center, Beijing, China, PRC. For more information, call + 86-10-593-39072.

June 12, 2012-June 14, 2012

Global Petroleum Show 2012.

The Global Petroleum Show (GPS) is the meeting place for the global oil & gas industry. This event plays host to 95 countries, 60,000 attendees, and 2,000 exhibiting companies and is one of the largest energy events bringing together global producers, EPC’s, service companies and suppliers. GPS offers the chance to source new products, find new business partners, and network with international and domestic partners. Stampede Park, Calgary, Alberta, Canada. For more information, call (203) 973 2940.

June 21, 2012-June 24, 2012

KidsWorld Dallas Children’s Apparel & Accessories.

KidsWorld Dallas Children’s Apparel & Accessories will showcase a wide range of apparel, leisure and necessity products for children and infants. Exhibitors from the babies wear, baby feeding and cereals, food supplements and nutrition, children’s books, stationery, toys and games, technology for kids, financial programs, gift items, art and crafts, education, sports, work from home opportunities and many more will be participating. Dallas Market Center, Dallas, Texas. For more information, call (214) 655-6100.

June 27, 2012

WEBINAR:

Temporary Exports: Carnets and Other Tools. Temporary importation is an important tool to show your products in foreign markets or for professionals bringing tools of the trade into a foreign country for a limited time. Companies have several options when considering temporary importation. These include: ATA Carnets, Temporary Importation Bond (TIB) and entry with duty drawback. There is also provision for bringing “tools of trade.” Washington, D.C. For more information, call (202) 482-1354.

June 29, 2012-July 2, 2012

AnimeExpo.

The annual Anime Expo is the largest animation and image arts exhibition in the world offering the latest insights into the business side of the burgeoning anime industry. The event is organized by the Society for the Protection of Japanese Animation. Los Angeles Convention Center, Los Angeles, California. For more information, call (415) 979-2273.

 

Send your trade show listing to editor@www.globaltrademag.com.

 

Archives, Global Logistics, Ocean Ports, Rail, Site Selection

PORTNERSHIP

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You’ll find a sense of partnership in most of the nation’s ports. All you have to do is ask.

A kink in the global supply chain stranding three containers on a dock may not seem like a big deal to your average consumer. But Don Volivar is no average consumer

“It was a very big deal,” says Volivar, warehouse manager at OA Logistics’ distribution facility at the Port of Savannah, Georgia. OA Logistics serves as the supply chain management arm of JLA Home, a global virtually integrated company based in California that specializes in importing and distributing home furnishings.

The three containers of high-end furniture arrived from China on-time for expedited handling until they hit a clearance snag—a series of “unavoidable unforeseeables” that kept the shipment on the dock an entire day, unable to move on to their consignee in New York City.

Volivar picked up the phone and called the port directly. Everything changed in a moment, and revealed a change in the new customer-service orientation of U.S. ports.

“The containers were off-loaded in the afternoon and left the terminal shortly afterward,” says Volivar. “The people at the port arranged the drayage for us and, honestly, we couldn’t have pulled it off without the port’s help. They really came through for us in a pinch. This wasn’t the first time they saved the day, and I’m sure it won’t be the last.”

Back in the day, a port was just a harbor where ships loaded and offloaded cargo. But those days are gone. Shifting trade lanes, global economic variables and consumer demand have turned the most competitive U.S. ports— – both large and small— – into genuine business partners with the shippers who have wide varieties of cargo to distribute all over the country.

In many cases, that transformation—of ports into partners with a well-honed customer-service mentality—is being driven by regional government agencies. The relationship between JLA Home and the – Georgia Port Authority is one such example.

“We researched ports up and down the East Coast and saw that Savannah had the pro-business attitude we were looking for,” says Volivar. OA Logistics is located just four miles from the port’s 1,200-acre Garden City container facility, a bustling hub of activity that can manage upwards of 10,000 containers annually for several large companies, including Bed, Bath & Beyond, J.C. Penney, and Costco.

The property occupied by the OA Logistics was developed in conjunction with the Savannah Economic Development Authority (SEDA), which not only provided tax incentives and employee recruitment assistance to JLA , but worked hand-in-hand with the Georgia Port Authority (GPA), – the Port of Savannah’s parent. The GPA routinely provides JLA and the port’s other distribution- center customers critical, ongoing data on available ocean carrier and rail services, highway connections and drayage providers, terminal operations, customs clearance, documentation processing. GPA even hosts a marketing staff well-versed in supporting its business clients, assisting with export and import opportunities.

JLA’s distribution operation is just one of more than a score of similar facilities in close proximity to the port, which serves as a major trans-regional distribution hub for a bloc of 26 states that are home to 75 percent of the country’s entire population. Currently, distribution facilities near the port’s main container facility cover more than 15 million square feet of storage space and generate in excess of 500,000 TEUs annually for such global giants as IKEA, Lowes, Hasbro, Coby Electronics, Mitsui-Soko (USA), Bass Pro Shops, Heineken, Petco, ABRO Industries, Pier 1, and Wal-Mart.

The GPA’s geographic location and what it calls its “pro-active customer-service approach” to marketing its customers have melded with large-scale plans to deepen its harbor facilities in preparation for the next generation of mega-containerships and its close relationship with the Panama Canal Authority have made the port “a real partner for us,” says Volivar.

You’ll find a similar sense of partnership in most of the nation’s ports. All you have to do is ask.

“Shippers are focused on efficiency, reliability, flexibility and cost-effectiveness in their supply chains,” says Tong Zhu, managing director of the Port of Tacoma’s Commercial Group. The result: ports have become adaptable and serious about creating “long-term” relationships.

port-of-tacoma
Port of Tacoma’s Commercial Group

The magnets to attract business to Tacoma, she says, include readily accessible highway and rail connections, 15 transload warehouse facilities; over 2.8 million square feet of storage space within three miles of the port;, three on-dock and one near-dock intermodal rail facilities; and a Foreign Trade Zone. In addition, Tacoma boasts 400 acres of land available for industrial and commercial development –a rare commodity for most ports serving large metropolitan business centers– and close proximity to the markets of northeastern Asia, most importantly South Korea, the U.S.A.’s newest free trade partner.

To already deep port channels ( 51 feet), the port in November added , a $32 million wharf extension at Washington United Terminals, where Korea-based Hyundai Merchant Marine vessels call. The project added 600 feet to the terminal’s existing 2,000-foot berth to support two “super post-Panamax” container cranes the terminal deployed in January 2009.

News of those changes have paid off: despite a moribund U.S. economy, export container volumes through Tacoma climbed about 15 percent last year, with nearly three quarters of the exports originating in Washington state.

Like her counterparts elsewhere, Zhu says, Tacoma gets huge lift from local government, working “closely with the Economic Development Board (EDB) for Tacoma-Pierce County on a variety of projects and initiatives to ensure that our region has a competitive business climate.”

Consider Americold’s new 196,000- million- square- foot cold- storage facility at the port. Less than one mile from the port’s six container terminals, the Atlanta-based company’s new refrigerated warehouse is also less than two blocks from the I-5 Corridor, which runs north and south— linking San Diego, California and Vancouver, B.C., and offering easy access to both the Union Pacific switching yard and the municipal railroad, Tacoma Beltline.

The new facility “serves the trade lanes for seafood, agriculture and food manufacturing companies moving product on the trade lanes between points across the U.S. and Canada,” says Rich Kappmeier, senior vice president of Americold’s Western Region. The move to Tacoma, he says, was an “excellent strategic fit” within the company’s existing North American cold storage network.

Port of Los Angeles
Port of Los Angeles – Leading the “beat the Canal” bate for transpacific traffic

In Southern California, the Port of Los Angeles is balancing two opportunities likely to attract business to the region and, at the same time, help L.A./Long Beach maintain its position as the country’s No. 1 container port: the ratification of the Korea-U.S. Free Trade Agreement (KORUS) and the on-going $5.3 billion expansion of the Panama Canal.

Southern California’s economy, says Jim MacLellan, director of marketing at the Port of Los Angeles, “will benefit more than any part of the U.S.” from the free trade pact.”

South Korea “is already the Los Angeles Customs District’s third- largest trading partner and [the agreement] will accelerate our already “double- digit” bilateral trade growth rate,” he says. The Los Angeles Customs District, one of the largest in the U.S., encompasses the trade activity generated by the ports of Los Angeles, Long Beach, Port Hueneme, and Los Angeles World Airports.

Even before the trade deal, California , sent a “diverse range of export products to Korea,” says MacLellan, with agriculture, food products and wine topping the growth list thanks to elimination of Korean duties on citrus and wine as high as 25 percent. Partnership doesn’t end with infrastructure and service: The Port of L.A. worked closely with the local office of the Korea Trade-Investment Promotion Agency to broaden the coalition backing the agreement and educate local businesses on the perceived benefits of the trade pact. In a tough political environment, that politicking helped close the deal.

Despite the potential KORUS windfall, the ongoing expansion of the Panama Canal presents the port and other U.S. West Coast load centers with a monumental challenge.

Within a few years, shippers will have the option of moving their goods from Asia “all-water” through the canal to U.S. Gulf and East Coast ports instead of loading and off-loading at Los Angeles, for example, and then moving their cargo to U.S. inland and eastern market points via rail. The expansion project—many call it “The Ultimate Game Changer,”— aims at doubling the capacity of the Panama Canal by 2014, and will allow larger “New Panamax” ships with much greater container capacity to transit its widened locks. Forecasters say the canal’s cargo volume will grow at an average of three percent per year over the next 20 years, doubling 2005’s tonnage by the year 2025.

Fighting against the tide, U.S. West Coast ports have formed a “Beat the Canal” alliance with labor unions, economic development agencies and others to craft a plan to compete with their Gulf and East Coast rivals. Improving local port infrastructure is a key element of the unprecedented partnership with the Port of Los Angeles alone working on expansion plans at several major container terminals and improving access to key highway and rail arteries connecting the port with nearby intermodal facilities and regional distribution centers.

Port of Los Angeles – Like South korea’s second Seoul

But, whatever the case, questions remain. The future of intermodal rail rates for discretionary cargoes moving via the Southern California gateway to the major U.S. markets; the future price of bunker fuel; the level of rate increases applied by the Panama Canal to re-coup its $5.25 billion investment in the expansion project; and the demographic consequences of a growing consumer base in the Southeast U.S.

While the answers to those questions remain speculative, one thing is certain. Other ports are following what one observer has called the Georgia Port Authority “gold standard” by expanding their service profiles to attract cargo and establish long-term relationships with the shippers that are playing an ever-increasing role in forging the links of their own individual global supply chains.

Simply put, market penetration is the key, and the port that can offer the most effective tools will get the business. The reality is that while it’s the ocean carriers that decide to send their ships on an all-water route from Asia to the U.S. East or Gulf Coasts via the Panama Canal, it’s the shipper who decides the port of call. The ball is in the shippers’ court and they’re always ready to play.

 

Archives, Departments, Dispatches

EVERGREEN EVER CLOSER

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Evergreen Line to Enhance Cooperation with CKYH on Asia-Europe and Mediterranean Trade (December 27, 2011).

Evergreen Line, together with CKYH-the Green Alliance, has announced that all parties intend to enhance highest frequency of service loops, expedition of delivery terms and full scale of port coverage in their services. They have also agreed to strengthen cooperation with each other in Asia-Europe and Asia-Mediterranean trade lanes from the second quarter of 2012.

Although Evergreen Line will not formally join CKYH-the Green Alliance and will maintain existing cooperation with China Shipping in Asia/Europe trade, the carriers will coordinate with each other to provide more intensive sailings—to the level of eight service loops from Asian ports to Northern European base ports and four service loops from Asian ports to Mediterranean ports every week. The majority of the fleet operated will range from 8,000 TEU to 13,000 TEU size.

Through this cooperation, Evergreen Line and CKYH-the Green Alliance will be able to provide the highest quality services to their customers with shortest transit time from major origin ports to European and Mediterranean destinations.

EAST MOVES WEST

Kerry Logistics Invests in Central China Expansion (January 9, 2012). Kerry Logistics is expanding its presence in Central China, building a new logistics center in Zhengzhou in Henan Province. Construction of the facility will begin in the second quarter of 2012 with a scheduled completion date in the first quarter of 2013.

The logistics center will be built on 70,000 sq. m of land acquired by Kerry Logistics to further expand its logistics network across the fast growing economies of Central China. The company will target the electronics and technology, automobile, industrial and material science sectors. The facility will meet demand from customers for new warehousing space and a broad range of logistics services.

“China’s coastal provinces have refocused to attract manufacturers of higher value-added products and there has been a migration of production to the central and western regions due to lower land and labor costs,” said Edwardo Erni, Managing Director, Mainland China, Kerry Logistics. “We see the potential to transform Zhengzhou into one of China’s manufacturing and processing hubs. The new logistics center will strengthen our comprehensive logistics network in the central and western regions of China.”

The logistics facility is located at the Singapore International Logistics Industrial Park in Zhengzhou, adjacent to the national highway to the east and to the Longhai Railway in the north and is 20km to the southeast of the city center.

Zhengzhou is located at the center of China and is a traffic and communication hub for road and rail as well as air transport.

CANADA (6) BEATS OUT U.S. (10)

Hong Kong Ranked as Freest Economy in the World for 18th Consecutive Year (January 12, 2012). Hong Kong has been ranked the world’s freest economy by the Heritage Foundation for the 18th consecutive year since the index was first published in 1995.

The Financial Secretary, John C. Tsang, said, “We welcome the Heritage Foundation’s high regard of Hong Kong as the world’s freest economy, a ranking we have held for 18 consecutive years. We are determined to uphold economic freedom in Hong Kong, which is the cornerstone of sustained economic stability, growth and prosperity.

“We see the role of the Government as that of an active facilitator. We provide a business-friendly environment where all firms can compete on a level-playing field. We have sound regulatory regimes in place to ensure the integrity and smooth functioning of a free market. We also strive to remove impediments and provide support in an open and equitable manner to facilitate industries tapping into new markets or new growth industries,” Tsang added.

According to the 2012 Index of Economic Freedom, Hong Kong scores 89.9 (on a scale from 0 to 100), well above the world average of 59.5.

Among the 10 economic freedom factors assessed, Hong Kong ranks first in financial and trade freedom, second in investment freedom and property rights, and third in business freedom.

The Heritage Foundation commended Hong Kong’s tax system as simple and efficient. It also considered monetary stability well maintained in Hong Kong.

The Heritage Foundation further complimented Hong Kong’s high-quality legal framework, which provides effective protection of property rights and strong support for the rule of law. In addition, Hong Kong’s regulatory efficiency and openness to global commerce strongly support entrepreneurial dynamism, while overall macroeconomic stability minimizes uncertainty. Moreover, there is little tolerance of corruption in Hong Kong.

The Heritage Foundation also noted that Hong Kong’s economic interaction with the Mainland has become more intense and sophisticated, chiefly through strengthened financial linkages, and financial markets that are extremely well capitalized.

The study ranks the degree of economic freedom of 179 economies around the world. The 10 factors assessed are business freedom, trade freedom, fiscal freedom, government spending, monetary freedom, investment freedom, financial freedom, property rights, freedom from corruption and labor freedom.

Singapore and Australia remain second and third respectively according to the Index of Economic Freedom.

Of the other economies in Greater China, the Mainland ranks 138th, Macau ranks 19th and Taiwan ranks 18th.

ON, DASCHER

Dachser Adds Offices in South Africa January 13, 2012. Dachser Transport of America Inc. (Dachser USA), the U.S. division of one of the world’s leading global logistics service providers, has announced another expansion of Dachser’s global network with branch offices in Johannesburg, Cape Town and Durban.

Effective immediately, Jonen Freight will operate under the name Dachser South Africa (Pty.) Ltd. Dachser and Jonen Freight formed a joint venture last year.

“The new name reflects full integration of the company into the Dachser network, through which we link South Africa with the world’s major economic centers,” says Thomas Reuter, managing director of Dachser Air & Sea Logistics.

The first operating year of the joint venture demonstrated the need for global shippers to have better market access in South Africa. “Revenue has grown by over 10 percent,” says Detlev Duve, managing director of Dachser South Africa and son of Jonen’s founder. Jonen Freight has been active in South Africa for more than 30 years and currently employs a staff of 157 people, which is 35 more than a year ago, according to Duve.

As well as air and sea freight services, the company offers shippers a wide range of supplementary services such as customs clearance, warehousing and distribution.

LONG HEADLINE

Rep. Bentley Proposes Remedy as More Nations Divert U.S.-Bound Imports to Avoid Paying Taxes: Modified Tacoma Harbor Maintenance Tax Would be Applied to All Cargoes Entering U.S., Not Just Ocean-Borne Freight (January 17, 2012). Changing the Harbor Maintenance Tax from being collected only on ocean-borne cargoes to being collected on all freight from foreign sources entering the United States was proposed in a speech here tonight by former Congresswoman Helen Delich Bentley.

In remarks to assembled west coast maritime interests, Bentley noted concerns of Washington state shippers that substantial Asian cargo is being diverted via a new port at Prince Rupert in Canada to avoid the Harbor Maintenance Tax (HMT), which the U.S. instituted in 1986 to pay for dredging ship channels.

Freight entering the U.S. from Canada or Mexico by railroad does not pay any tax.

Bentley, also a past chairman of the Federal Maritime Commission, said the situation is now under review at the FMC. The study was requested the entire Congressional delegation of the state of Washington–both House and Senate—and members of California’s Congressional delegation. The period for industry comment has closed, and FMC staff is analyzing 70 inputs the agency received.

During a September 2011 speech, FMC Chairman Richard Lidinsky said the agency faces important legal issues, including where water-borne commerce begins and ends, and where the responsibility lies.

PENN MIGHTIER THAN SWORD

Export Growth Benefits Pennsylvania Companies (January 20, 2012). The U.S. Commercial Service of the Commerce Department’s International Trade Administration announced new data that show Pennsylvania merchandise exports increased 17 percent in the first nine months of 2011 compared to the same period in 2010, growing from $26.1 billion to $30.6 billion.

“Many Pennsylvanian businesses are finding that emerging markets around the world offer some of the best opportunities for making new sales, and are adjusting their export strategies accordingly,” said Lyn Doverspike, Director of the U.S. Commercial Service in Pittsburgh. “One of the most important aspects of exporting is that it helps firms to diversify their portfolios and withstand downturns in the domestic economy, and that’s good for business. We’d like to help all companies to realize your export potential.”

Pennsylvania’s nine-month 2011 merchandise export sales outpaced the 2010 figures for the same period in many top destinations, including United Kingdom (up 46 percent), China (41 percent), Korea (41 percent), Netherlands (38 percent), and Germany (32 percent). Key merchandise export categories include chemicals, machinery manufactures, primary metal manufactures, computer and electronic products, and transportation equipment. For the full year 2010, Pennsylvania merchandise exports totaled $34.9 billion.

“With the help of Pennsylvania export sales, President Obama’s National Export Initiative continues to progress towards the target goal of doubling U.S. exports by the end of 2014,” said Suresh Kumar, Assistant Secretary for Trade Promotion and Director General of the U.S. and Foreign Commercial Service. “Pennsylvania businesses also stand to benefit from the recent congressional passage of free trade agreements with Colombia, South Korea, and Panama. When implemented, these agreements are expected to increase U.S. GDP by about $12 billion and U.S. exports by $13 billion annually, supporting economic and job growth across the country.”

To further expand the reach and availability of export programs to businesses nationwide, the International Trade Administration has signed a Memorandum of Intent with the State International Development Organizations, Inc. (SIDO). SIDO supports state international trade agencies, and the memorandum expands cooperative efforts in the promotion of federal and state export programs such as trade missions and overseas business matchmaking services.

With 108 offices across the United States and in American Embassies and Consulates in more than 75 countries, the U.S. Commercial Service connects U.S. companies with international buyers through export counseling and a variety of export services. To get started, contact the local U.S. Commercial Service in Pittsburgh at 412-644-2800 or visit www.export.gov/Pennsylvania.

A DRY SPOT ON THE SEA

Safmarine Names Second New Vessel (February 10, 2012). The Safmarine Sahara—Safmarine’s second newly-built, owned multi-purpose vessel (MPV)—was officially named today (February 10, 2012) in Savannah, Georgia, USA. The vessel, built at the Wuhu Xinlian Shipyard in China in 2010, is deployed on Safmarine’s MPV trade between North America and West Africa.

Anita Edmondson, Director of International Logistics at M-I SWACO, had the honor of naming the vessel. “I am delighted to be the godmother of this new vessel, which is a symbol of Safmarine’s long-term commitment to the MPV trade and to supporting our business.” Safmarine CEO Grant Daly, former head of Safmarine’s MPV business, said: “MPV is a Safmarine differentiator and our investment in new vessels not only allows us to meet our customer’s requirements and partner more closely with them, but it also tells them we are here to make the difference and that we are prepared to invest in making that difference.”

Edmondson, and Safmariner Pilar Maurial, chose to celebrate the naming of the new vessel by making another kind of difference. Edmondson donated $1,500 USD to the Juvenile Diabetes Research Federation (JDRF) in honor of the occasion. Maurial, 2011 winner of Safmarine’s Customer Recognition Award, donated her $3000 USD prize money to The International Seamen’s House.

Safmariners and customers were present at today’s naming, which was made possible with the assistance and generous support of the Georgia Ports Authority.

Send your organization’s press release to editor@www.globaltrademag.com.