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3 Strategies For Importing Goods From The U.S. To Europe

global trade U.S

3 Strategies For Importing Goods From The U.S. To Europe

Bilateral trade between the U.S. and the European Union has been a longstanding phenomenon. According to the U.S. Census Bureau, the EU is one of the U.S.’s biggest trading partners—with $823 billion of goods traded in 2022.

Read also: Logistics Planning Information For Key U.S. Seaports

By definition, exports are goods or services produced in one country and sold in another, while imports are goods and services not produced domestically. The World Trade Organization identifies the U.S. as the world’s largest importer, followed by the EU and China, which has been the largest exporter of goods since 2009, Statista data shows. The U.S. ranks third in exports, behind China and the EU.

Exports to the EU totaled nearly $319 billion. Meanwhile, imports from the EU amounted to $504 billion, making the trade deficit $186 billion, U.S. Census Bureau data found. In simple terms, the U.S. receives more imported trade goods than it exports to the EU.

WHY ARE U.S. IMPORTS SO DIFFICULT TO MAINTAIN FOR E-COMMERCE IN EUROPE?

The COVID-19 pandemic, prolonged inflationary pressures, political unrest, new international regulations, and complicated logistics have created numerous trade challenges for retailers and e-commerce companies based in the U.S.

In my experience as the CEO and co-founder of Go Global Ecommerce, it is generally easier to import goods into Europe than the U.S. The U.S. has more restrictions on products and policy regulations, though every country has its own specifications, standards, and means of trading. 

FACTORS COMPLICATING THE IMPORTING OF GOODS FROM THE U.S. TO THE EU

The first factor complicating international e-commerce is the state of overall economic conditions. We know that economies can change daily. Add in possible recessions, changing regulations, and political unrest, and you have a case of complicated trade. A complication or change in one country—or at one level of the business landscape—can create a domino effect on trade worldwide.

When it comes to the economic outlook, nearly 90% of supply chain leaders surveyed for a Container LogTech report said they fear “inflation and recession will be the biggest factors that will impact businesses” this year. Of course, negatively impacted businesses will negatively affect trade.

Furthermore, trade regulations differ for every industry, product, business and sector. When it comes to customs, a free trade agreement or coalition is typically in place. A free trade agreement, such as the United States-Mexico-Canada Agreement (USMCA), is a pact that eliminates many barriers and tariffs between countries, making it easier to import and export goods.

However, some types of goods have custom duties, such as aluminum, alcohol and steel. A customs duty is a tariff or tax on specific goods the owner, purchaser or customs broker must pay. These are handled by governments and regulators. International regulations and logistics complicate the process of importing goods from the U.S. for sale within the EU. For example, U.K. e-commerce fulfillment is especially trickier post-Brexit.

Geography is another factor that can affect trade. For example, as a country equipped with big boats and high-tech shipping machinery, it is easier to trade goods in the Netherlands. Trade routes, shipping requirements and warehousing needs can impact shipping and trade in countries that don’t have the necessary ports, stations or equipment for handling a large influx of imports.

In sum, factors that impact trade include the type of product, economic conditions, geography and political agreements. Fortunately, governments and regulators can help facilitate trade flow, improve accessibility for U.S. imports, and boost the overall network of e-commerce in Europe.

BUSINESS MOVES TO MAKE FOR EFFECTIVE CROSS-BORDER E-COMMERCE

Smooth implementation of cross-border e-commerce solutions requires regulations and political agreements. Yet government and agencies aside, there are ways to expand your company’s e-commerce business across borders as well.

E-commerce in Europe is on the rise as companies like Shopify, Zalando and the Otto Group expand, and startups like Klarna and Flink continue to pop up on the market. There is a massive demand for e-commerce in the European market. To keep up with these changing tides, consider the following tips to expand your business’s cross-border e-commerce abilities.

1. Analyze the best route for your business.

Every country has pros and cons, regulations, and laws. First, determine which country has the best tax considerations and payments process for your business. Perhaps localizing your efforts in Europe instead of the U.S. would prove most beneficial. Ask yourself whether the location has a strong presence of business partners, market maturity, and your business’s target customers. 

Then, determine whether you want to expand physically to other countries. Your company could benefit by opening a warehouse in the EU. This move can help you save time and money on shipping and efficiency costs.

Establishing warehouses abroad can also ease transportation concerns, saving you the headache of mapping out the best shipping routes.

2. Invest in the experts.

Compliance is crucial. To ensure your business is set up for success from the start, invest in a legal department or a company with international expertise. Whether you hire in-house or outsource advice, these shipping experts can provide you with e-commerce regulations guidance and help you ensure your business displays all necessary legal information to customers.

Nowadays, more businesses are choosing the merchant of record model to stay compliant when selling internationally. International e-commerce experts can also guarantee that you abide by all trade duties, tax regulations, and laws no matter where your customers are located.

3. Put your customers above profit.

A strong and impressive customer experience is what keeps your customers continuously choosing your company. Find ways to simplify your return and exchange policy, but note how the cost of customs and duties will work when a product needs to be returned. Analyze the potential costs of returns and exchanges, but don’t make the customer bear the brunt of the transaction.

Cross-border e-commerce brings companies international market opportunities. It can be challenging for companies to keep up when faced with ever-changing trade regulations and agreements. Fortunately, by following these three strategies, you can expand your business internationally today. The opportunity and demand are ongoing, and the potential for e-commerce in Europe is continuous.

Author Bio

Simone De Ruosi is the CEO and co-founder of Go Global Ecommerce. With a background in engineering and business and sound knowledge of productive system management and strategic business management, he completed his MBA at the ESCP Business School (placed at No. 6 in the FT Global MBA 2022 rankings). When he co-founded and launched Go Global Ecommerce in 2020, he set out to assist brands that were ambitious about expanding on a global scale—an objective that has been fulfilled, having helped brands such as Nestlé, Kraft Heinz, Smeg, The Ridge, and Blauer USA grow internationally. He is a Mensa member, a keen sportsman, and, above all, a family man.

 

global trade machinery

U.S. Imports of Machinery Reach $3.8B in 2023

U.S. Loading Machinery Imports

In 2023, loading machinery imports into the United States fell to 5.1M units, with a decrease of -6.1% compared with 2022 figures. Overall, imports continue to indicate a slight decline. The most prominent rate of growth was recorded in 2016 with an increase of 12% against the previous year. Over the period under review, imports attained the maximum at 7.4M units in 2017; however, from 2018 to 2023, imports remained at a lower figure.

Read also: Top Import Markets for Machinery for Packing

In value terms, loading machinery imports expanded significantly to $3.8B (IndexBox estimates) in 2023. Over the period under review, total imports indicated a strong increase from 2013 to 2023: its value increased at an average annual rate of +6.7% over the last decade. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. Based on 2023 figures, imports increased by +32.2% against 2020 indices. The most prominent rate of growth was recorded in 2021 with an increase of 25%. Imports peaked in 2023 and are expected to retain growth in years to come.

Imports by Country

Canada (956K units), Mexico (885K units) and South Korea (377K units) were the main suppliers of loading machinery imports to the United States, with a combined 44% share of total imports.

From 2013 to 2023, the biggest increases were recorded for South Korea (with a CAGR of +28.9%), while purchases for the other leaders experienced more modest paces of growth.

In value terms, the largest loading machinery suppliers to the United States were Mexico ($996M), Germany ($678M) and Canada ($476M), together accounting for 57% of total imports. South Korea, Italy, China and Japan lagged somewhat behind, together accounting for a further 23%.

South Korea, with a CAGR of +37.5%, saw the highest rates of growth with regard to the value of imports, among the main suppliers over the period under review, while purchases for the other leaders experienced more modest paces of growth.

Import Prices by Country

In 2023, the loading machinery price amounted to $451 per unit (CIF, US), jumping by 22% against the previous year. Over the last decade, it increased at an average annual rate of +2.7%. As a result, import price attained the peak level and is likely to continue growth in the immediate term.

Prices varied noticeably by country of origin: amid the top importers, the country with the highest price was Germany ($2,018 per unit), while the price for Belgium ($99 per unit) was amongst the lowest.

From 2013 to 2023, the most notable rate of growth in terms of prices was attained by Germany (+20.0%), while the prices for the other major suppliers experienced more modest paces of growth.

Source: IndexBox Market Intelligence Platform  

podcast cover art - port ny & nj

GT Podcast – Episode 129 – The Port Authority of NY & NJ – The Port That’s Doing Alot and Doing it Right

Welcome to another episode of “Logistically Speaking,” the podcast that delves deep into the pulse of global trade and logistics.  Today, we’re excited to welcome a very special guest, Bethann Rooney, the Port Director of the Port Authority of New York and New Jersey, one of the busiest and most significant ports in the United States.

In this episode, we will uncover why the Port of NYNJ stands out as a powerhouse in the global port community. Bethann will share her insights on how the port not only handles immense logistical challenges but does so with exceptional efficiency and innovation. We’ll explore the strategies that make this port a model of success, emphasizing sustainability and forward-thinking management.

Moreover, we’ll dive into a unique ecological concern—can a small marine organism actually threaten the accessibility of big container ships? This might sound minor, but it has the potential to create major ripples in global shipping logistics.

Stay tuned as we navigate through these fascinating topics, offering you a behind-the-scenes look at the complexities and triumphs of running one of the world’s most influential ports.

For more information on the Port Authority of NY & NJ, visit https://www.panynj.gov/port/en/index.html

Check out more of our GT Podcast – Logistically Speaking Series and more here!

december

December 2023 Sees U.S. Stationery Imports Plummet to $47M

U.S. Stationery Imports In December 2023, stationery imports into the United States shrank remarkably to 13K tons, reducing by -26% on November 2023 figures. Over the period under review, imports saw a relatively flat trend pattern. The most prominent rate of growth was recorded in April 2023 when imports increased by 69% m-o-m.

In value terms, stationery imports dropped remarkably to $47M (IndexBox estimates) in December 2023. Overall, imports showed a slight decrease. The pace of growth appeared the most rapid in April 2023 when imports increased by 44% month-to-month.

Imports by Country

China (4.3K tons), Vietnam (2.5K tons) and Mexico (1.8K tons) were the main suppliers of stationery imports to the United States, with a combined 68% share of total imports. India and Taiwan (Chinese) lagged somewhat behind, together accounting for a further 17%.

From December 2022 to December 2023, the biggest increases were in Taiwan (Chinese) (with a CAGR of +3.5%), while purchases for the other leaders experienced mixed trend patterns.

In value terms, China ($16M) constituted the largest supplier of stationery to the United States, comprising 35% of total imports. The second position in the ranking was held by Vietnam ($7.6M), with a 16% share of total imports. It was followed by Mexico, with a 14% share.

From December 2022 to December 2023, the average monthly growth rate of value from China totaled -1.2%. The remaining supplying countries recorded the following average monthly rates of imports growth: Vietnam (-1.5% per month) and Mexico (+0.8% per month).

Imports by Type

In December 2023, registers, account books, order books and receipt books (8.9K tons) constituted the largest type of stationery supplied to the United States, with a 70% share of total imports. Moreover, registers, account books, order books and receipt books exceeded the figures recorded for the second-largest type, paper binders, folders and file covers (3.4K tons), threefold. The third position in this ranking was taken by blotting pads and book covers (194 tons), with a 1.5% share.

From December 2022 to December 2023, the average monthly growth rate of the volume of import of registers, account books, order books and receipt books was relatively modest. With regard to the other supplied products, the following average monthly rates of growth were recorded: paper binders, folders and file covers (-1.2% per month) and blotting pads and book covers (+2.2% per month).

In value terms, registers, account books, order books and receipt books ($34M) constituted the largest type of stationery supplied to the United States, comprising 72% of total imports. The second position in the ranking was held by paper binders, folders and file covers ($11M), with a 23% share of total imports. It was followed by albums for samples, collections, stamps or photographs, with a 2.2% share.

Import Prices by Country

In December 2023, the stationery price stood at $3,663 per ton (CIF, US), stabilizing at the previous month. Overall, the import price, however, continues to indicate a relatively flat trend pattern. The pace of growth was the most pronounced in August 2023 when the average import price increased by 14% against the previous month. Over the period under review, average import prices reached the maximum at $3,931 per ton in October 2023; however, from November 2023 to December 2023, import prices stood at a somewhat lower figure.

Prices varied noticeably by the country of origin: the country with the highest price was Taiwan (Chinese) ($3,792 per ton), while the price for Cambodia ($2,102 per ton) was amongst the lowest.

From December 2022 to December 2023, the most notable rate of growth in terms of prices was attained by India (+0.5%), while the prices for the other major suppliers experienced mixed trend patterns.

Source: IndexBox Market Intelligence Platform 

turbo-jet

World’s Best Import Markets for Turbo-Jets (Over 25 kN)

When it comes to turbo-jets, there are several countries around the world that dominate the import market. These countries not only have a high demand for turbo-jets but also possess a flourishing aviation industry. According to the latest data from the IndexBox market intelligence platform, the top 10 countries in terms of import value of turbo-jets (over 25 kN) in 2022 are listed below:

1. United Kingdom – $9.5 billion

2. Hong Kong SAR – $8.0 billion

3. United States – $6.7 billion

4. Singapore – $6.1 billion

5. Germany – $4.6 billion

6. France – $4.4 billion

7. China – $3.9 billion

8. United Arab Emirates – $3.3 billion

9. India – $3.1 billion

10. Brazil – $2.5 billion

Let’s take a closer look at these countries and their import markets for turbo-jets.

1. United Kingdom

The United Kingdom leads the world in turbo-jet imports, with an import value of $9.5 billion in 2022. This can be attributed to the country’s strong aviation industry and its significant role as a global transportation hub.

2. Hong Kong SAR

Hong Kong SAR comes in second place, with an import value of $8.0 billion in 2022. The region’s strategic location, advanced infrastructure, and well-developed aviation sector contribute to its high import demand for turbo-jets.

3. United States

The United States ranks third in the world for turbo-jet imports, with a value of $6.7 billion in 2022. The country boasts a thriving aviation industry and is home to several major aircraft manufacturers.

4. Singapore

Singapore is another prominent player in the import market for turbo-jets, with an import value of $6.1 billion in 2022. This can be attributed to the country’s strategic location as a major international transportation and logistics hub.

5. Germany

Germany has a strong presence in the turbo-jet import market, with an import value of $4.6 billion in 2022. The country’s advanced manufacturing capabilities and renowned engineering expertise contribute to its high import demand.

6. France

France is also a significant importer of turbo-jets, with an import value of $4.4 billion in 2022. The country boasts a long-standing aerospace industry and is home to several leading aircraft manufacturers.

7. China

China has experienced tremendous growth in its aviation industry in recent years, and this is reflected in its import demand for turbo-jets. The country imported turbo-jets worth $3.9 billion in 2022, making it a key player in the global import market.

8. United Arab Emirates

The United Arab Emirates has emerged as a major importer of turbo-jets, with an import value of $3.3 billion in 2022. The country’s rapid economic development and ambitious aviation infrastructure projects contribute to its increasing import demand.

9. India

India’s growing aviation industry has led to an increased demand for turbo-jets. The country imported turbo-jets worth $3.1 billion in 2022, positioning it as a significant player in the global import market.

10. Brazil

Brazil rounds off the list of the top 10 import markets for turbo-jets, with an import value of $2.5 billion in 2022. The country’s robust aviation sector and its role as a prominent player in the Latin American market contribute to its import demand.

These top 10 import markets for turbo-jets highlight the strong demand and growth potential in the global aviation industry. As the demand for air travel continues to rise, the import market for turbo-jets is expected to thrive in the coming years. The data provided in this article has been sourced from the IndexBox market intelligence platform, which provides comprehensive and up-to-date information on various industries and markets.

Source: IndexBox Market Intelligence Platform 

sourcing

The Pros and Cons of Local Sourcing

The Pros and Cons of Local Sourcing

Local sourcing is the practice of contracting suppliers located within your country or even city. This term also applies to the suppliers in your home county. However, there is always considerable debate over whether to prioritize the local suppliers or cast your net wider. To help decide, it is wise to look at the pros and cons of local sourcing.

The pros of local sourcing

Local sourcing means faster and more predictable delivery times

The news of supply chain disruptions is prevalent. Also, planning for survival in the new normal the pandemic has left us with is complex. So, it is no wonder that perhaps the most significant advantage of local sourcing is its reliability. Considering that the distance your cargo would need to travel is vastly reduced, the problems it can run into are fewer as well. You would not need to worry about ports or airports closing down and leaving your goods stranded. And, with that increased reliability, it becomes much easier to handle the risk factors of high-profitability deals.

You can work with suppliers much more closely

Another of the advantages of local suppliers is that you can work with them more closely. When dealing with an international supplier a whole sea away, it is natural that you can have at most one or two meetings in person a year. On the other hand, a short trip is all that would take to reach and discuss business with a local supplier. Of course, this means that you can also get them to customize some of their services for you, particularly if you need certain parts that need to be custom produced for your needs or a similar demand.

You would not need to manage your warehouses as meticulously

When your supplier is just down the street or a city or two away, timing deliveries right becomes easier. It means that, instead of having huge shipments that take up lots of space and cause logistics problems, it is possible to have a string of smaller deliveries. And, with the reduced risk and delay factors that we have already discussed, you can also order them, so they arrive before you need to have them shipped out. In turn, this would ensure that your warehouse is kept busy but never overflows or has shipments clogging up space better used for something else. And you could even manage with much smaller warehouses.

You could more easily make last-minute orders

Making a last-minute order is not something you should turn into a habit. However, if any of your suppliers run into problems, or you have a sudden order of goods yourself, you would be able to resolve the situation much more easily. A quick trip or a phone call would allow you to check in with your partners and look for additional goods. And the proximity would make getting the goods to you a breeze, as well. In the end, this extra wiggle room would let you approach your business in a much more relaxed way than ordering goods from overseas. After all, a missing shipment in such cases might take weeks to make up for.

You would not need to deal with import taxes

It is impossible to avoid worrying about taxes when trying to import goods. For any legitimate business, it is not too difficult a hurdle to cross. However, it can be tough to manage when you are just starting, and they are cutting into your profits. That is why, especially for brand new businesses, local suppliers that allow them to bypass this expense are an excellent choice. There are plenty of rare and common U.S. customs clearance issues you would entirely avoid by choosing to go through a local supplier, too.

Enhancing Sustainability and Reducing Carbon Footprint

One of the most significant advantages of local sourcing is its positive impact on the environment. By reducing the distance that goods travel, you contribute to lower carbon emissions and minimize the ecological footprint of your supply chain. With growing awareness of environmental concerns and increasing consumer demands for sustainable practices, opting for local suppliers can significantly boost your company’s reputation and attract eco-conscious customers.

Fostering Community Growth and Support

When you source locally, you actively contribute to the growth of your community and support the local economy. By providing business to nearby suppliers, you help create job opportunities and stimulate economic development. This, in turn, can lead to increased consumer spending within the community, benefiting other businesses as well. Additionally, building strong relationships with local suppliers can foster a sense of camaraderie and collaboration among businesses, creating a supportive network for mutual growth.

The cons of local sourcing

The local supplier might grow over-dependent on your business

It might sound odd. But be it for the supplier or the business, over-dependence is not great. If a supplier starts to prioritize the demands of the company they rely on for the majority of their profits, it can seriously impact their competitiveness in the market. They can grow too specialized to grow their business, and it can be challenging to secure new contracts. There is also the matter of their new product development slowing or halting entirely. It means that they might eventually be left behind and lose their chief source of income as well. It would make demand planning for the buyers difficult as well if planning to branch out to new products.

Canceling a contract can incur a lot of backlash

Hiring local suppliers and helping the local economy is fantastic for PR. However, if you ever need to move on from those contracts, you would be facing an equal amount of backlash and ill-will. No matter how justified your decision might be. The public could still view it as abandoning those same businesses and economies you were lauded for helping.

You might not be able to obtain the best or latest products

Local suppliers might not be able to offer you top-of-the-line goods. They are likely solid and reliable manufacturers, yes. But with the world as a stage for your business, it is always possible to find someone producing better versions of the product you are interested in. So, you are more or less choosing between reliability versus quality. Of course, there are exceptions.

Local suppliers can be less efficient

Even though they are more reliable, local suppliers can have efficiency problems. They tend to be smaller and have a smaller production capacity. Of course, as you work together and prosper, they might expand their business and build more facilities. But then you run the risk of our first cons: their reliance on your purchases growing to the point they practically only cater to you.

It is hard to ensure objective supplier selection

You might, over time, develop a tight-knit bond with the local suppliers, especially if they have been there for you since the foundation of your company. That is natural. However, if your company is developing faster than they are, you might find yourself in need of new partners to keep up with the demand you are facing. At such a time, due to your friendship or perhaps fear of public backlash, it wouldn’t be easy to objectively select another supplier better suited to your needs.

Limited Access to Specialized Products

While local suppliers offer reliability, they may not always have the capacity or expertise to provide highly specialized or cutting-edge products. In industries where innovation is crucial, you might need to explore international options to access the latest advancements and unique offerings.

Higher Costs and Reduced Cost Competitiveness

Local sourcing might come with higher production and labor costs compared to countries with lower manufacturing expenses. This can affect the cost competitiveness of your products in the global market. As a result, careful cost-benefit analysis is essential to ensure that the benefits of local sourcing outweigh the potential price disadvantages.

Dependence on Regional Vulnerabilities

By relying heavily on local suppliers, your supply chain could be susceptible to regional vulnerabilities. Natural disasters, economic downturns, or political instability in the region could disrupt your supply chain and affect your operations. Diversifying your sourcing strategy can help mitigate these risks and ensure a more resilient supply chain.

Final word

Now you know the pros and cons of local sourcing, so it should be easier to make an informed decision. Whether you decide to pursue local or international suppliers, remember that your priority is always the development and future of your company.

 

Ukraine

Five ways the war in Ukraine will change the world’s economy

The war in Ukraine is a tragedy that will continue to play out for months, with an uncertain ending as far as the sad cost in human life, new alignments in global geopolitics and the stunning damage that will be done to the economies in countries beyond just Russia and Ukraine. Even though the repercussions of this war will reverberate for decades, we can already identify some trends that will impact the global economy in the future.  As with any volatile trade and economic situation, there will be clear losers (the Russian economy), but there will also be potent secondary developments that arise as a result of this aggressive invasion of a democratic, Western-oriented Ukraine.


 

Energy Security / Renewable Energy

The U.S. and EU have spent decades wringing their hands over the Transatlantic joint dependence on oil and gas from ‘bad actors’, including Russia, Saudi Arabia, and Venezuela.  In the last few weeks, attempts to punish Russia economically have been hamstrung due to the fact that much of Europe still receives about half of its gas from Russia, an impossible dependency when it comes to confronting Russia for its illegal actions in Ukraine. While the ‘fracking revolution’ has assisted the U.S. to a certain level of energy independence, a sizeable portion of the nation’s oil still comes from unreliable external sources. The irony of Russia’s attack on a democratic Ukraine is that it might finally push the U.S. and EU to commit to a substantive, immediate and dedicated pursuit of renewable energy sources for which environmental activists and innovative business leaders have been lobbying for decades.  Renewable energy’s strongest proponent just became the national security crowd.

Defense Spending – Globally

The same national security concerns will also lead to a huge rise in defense spending from EU and other nations.  Germany’s proposed budget increase alone will be a critical shot in the arm for the European defense industry, but we can assume that other nations that have put off investments in this area were shaken by Russia’s willingness to break global norms and attack Ukraine and will respond with substantial budget increases.  Images of Turkish Bayraktar drones destroying Russian armor and video of the U.S.-made Javelin helping to stymie the 7th largest army in the world are going to change how smaller nations structure their arms inventory.  More importantly, Russia’s actions have disabused any remaining doubters of the notion that a country like Russia will ‘play by the rules’ of international law in the modern era.  If Russia can so brazenly violate their international agreements and obligations, then so can China – and that realization will have a substantive domino effect on the planning and defense expenditures of everyone from Finland to the Philippines.

Wheat and Foodstuffs – Even Greater Price Inflation

Russia and Ukraine accounted for 30% of the global wheat trade prior to this conflict. But that is not the only food product that will be taken off of the market as a result of the war – sunflower oil, corn and other key products will either be destroyed (or unplanted) as a result of the fighting or will be locked inside Russia’s domestic market due to sanctions and the inevitable tariffs.  The rest of the world will see massive price increases and shortages in certain foodstuffs.  Combined with the global surge in inflation and increasing transportation costs, many global food-producing companies will struggle to provide products that are affordable for their usual clients.  If there is a silver lining to this cloud, it is that locally-sourced products and wheat-alternatives (rice, corn, bulgur) should see a boom in demand.

Cybersecurity and Information Warfare

Russia and China have been fighting a shadow war with the U.S. and EU in the cyber realm for years, but this conflict has pushed that fight into the light of day.  U.S. and European struggles with Russian governmental and pseudo-governmental cyber strikes (from denial of service attacks to outright hacks for information and funds, as well as documented attempts to impact elections in both regions) should have the same impact on corporate and governmental cybersecurity spending as watching Russian tanks roll into Ukraine did for defense spending.  No one wants to be the easy target in this war and corporations that took some risk and saved money on cybersecurity will be scampering to close those gaps as quickly as they can.  Russian desperation to get at global fund sources in the next few months dramatically increases the risk of pseudo-governmental ransomware attacks, and the information warfare we are seeing between Russia/China and the rest of the world is astoundingly blunt (and for Ukraine, remarkably effective in generating global support).  The gloves are off.  Is your company ready to defend its business interests from cyber and information / reputational attacks?

A More Unified, Emboldened EU

The last month has been a litmus test for EU leadership, and they have come out looking much more poised and united than anyone would have believed.  Should they have taken this threat more seriously in the last decade?  Absolutely.  Have they tolerated Putin-loving populists in the EU club for years (Orban, Zeman, Le Pen, Salvini)?  Sadly, yes.  But all of that changed when Russia headed for Kyiv.  Member state leaders closed ranks and the EU turned from a reluctant bystander into ardent supporters of Ukrainian defense efforts in a few short weeks.  From an economic perspective, this more unified and confident EU will disrupt a number of patterns.  They’re likely going to be much more aggressive in nurturing and protecting their internal innovation in technology and defense.  They will redouble efforts to reduce their dependency on external energy sources (to the benefit of renewable technologies, electric vehicle innovations, the nuclear industry and even public transportation ventures).  Most importantly, they can be expected to be stronger proponents of democratic ideals in their foreign political and business affairs.  Countries (and companies) that interact with this new EU will likely find that they are much more insistent on ESG concerns and support for human rights, democratic principles and adherence to the rule of law.

________________________________________________________________

Kirk Samson is a Director at the International Trade Association of Greater Chicago.  He is a former U.S. diplomat and spent ten years as an international law advisor for the Department of Defense.

supply chain management

Expert Insight: Supply Chain Disruptions Through the Eyes of TITAN Professional Tools

“Supply chain troubles.” “From bad [2020] to worse [2021].” It was a “perfect storm for our supply chain crisis.” These are just a few of the headlines I’ve seen in recent weeks looking back on 2021. While I think we’re all eager to turn the page and start anew, I fear many of the challenges we experienced last year will continue into 2022 – and perhaps beyond. If there’s one thing we learned last year, it’s that our supply chain is more fragile than many of us imagined.

Case in point, a recent estimate from the American Trucking Associations (ATA) reported that the truck driver shortage has risen to 80,000 – an all-time high for the industry. According to the ATA study, the driver shortage could surpass 160,000 by the end of the decade, noting that the industry will need to recruit nearly one million new drivers to replace those retiring or leaving the business. Not only did the outbreak of COVID-19 in early 2020 exacerbate the issue, but it also revealed gaps in every link of the supply chain and then amplified the impact of those collective weaknesses.


 

A recent Wall Street Journal article perfectly summarized the challenge:

Trucks haul more than 70% of domestic cargo shipments. Yet many fleets say they can’t hire enough drivers to meeting booming consumer demand as the U.S. economy emerges from the pandemic. The freight backup has intensified longstanding strains in the industry over hours, pay, working conditions and retention. The surge of goods has created logjams at loading docks and port terminals, gobbling up scarce trucking capacity and making drivers’ jobs even harder. Factories and warehouses are also short of staff to load and receive goods. Meanwhile, the broader labor shortage has left openings for other blue-collar jobs that compete with trucking, including in local delivery operations, construction and manufacturing.

To better understand the operational and logistical issues retailers, importers, wholesalers and other distribution organizations are facing due to the state of today’s supply chain, I recently spoke Nick Tsitis, vice president at TITAN Professional Tools. His account is eye-opening, to say the least, and can hopefully help those facing similar challenges.

Q:  How did the Suez Canal accident create operational and logistical issues for businesses like TITAN Professional Tools?

A:  No one talks about this anymore. Before conversations of current supply chain issues, however, our forwarders often referenced the incident. I believe it significantly contributed to and accelerated our current supply chain problems, including shortages of equipment and limited space on vessels and at our ports. There’s been a huge stress on the ports, making it difficult to even get containers off the ships. And when you do get them off the ships, they sit in these piles disorderly piles they’re calling “pig piles” now. Whatever’s on top becomes available first.  And if you’re on the bottom of that pig pile, your merchandise is stuck.

So, not only is it taking time to get containers off ships, but it’s also taking time to get them from the ground onto chassis. Once containers finally do make it to our facility, and we get them unloaded, you would think with such a shortage of equipment there would be an urgency to return containers, but they cannot be returned to the port. We recently discovered 12 containers being stored in our business park from someone that is not a tenant here.  Apparently, they ran out space in their complex, and decided to park the equipment at ours.

Q: How have issues like this impacted your operating costs?

A: In so many ways.  It used to cost $1,500 to get a container from Asia to Seattle. Now we’re paying as high as $18,000. We are often charged demurrage for containers that are off vessels but not delivered to us within a week.  There are surcharges being implemented on both sides as well (Asia and USA). It’s a huge burden on us. It also affects our cash conversion cycle as goods invoiced to us are stuck in transit, and we can’t invoice until we receive and ship to our customers.

Q: How are you dealing with dock scheduling and similar issues caused by all this unpredictability?

A: Once we can get the container and get an appointment, it hasn’t been too big of a problem. On occasion, the truck drivers will have to wait sometimes six to eight hours to pick up a container. We used to pay under $100 to get a container from Seattle to Kent. Now it’s almost $700 to move it seven miles. Local drayage is up, and we’re often having to pay the drivers by the hour to wait in line to ensure we get our merchandise.

Q: Are you also facing labor shortages in the warehouse that compound these issues?

A: I know others have but we haven’t realized that because we’re a small business and have a lot of family here that have been with the company for a long time.  We are fortunate and may be y the exception when it comes to labor. But, yes, when you look down the road and see Amazon hiring at $23.50 an hour with a $3,000 signing bonus, it can be hard to compete with that.  it has in the past.

Q: How close do you think we are to seeing an end to these disruptions?

A: Well, everything’s related in one way or another – if not directly, then indirectly – to these supply chain problems. Our lead time with several factories is now as high as 18 months, where it used to take 45 to 90 days to manufacture product and 14 days transit is now taking as many as 60 or 90 days transit. There are some factories, that if we placed an order now, we won’t see it for almost two years. That’s an extreme. Most factories now are taking 6 to 8 months. As a result, we’re buying out a year, which is really scary. So, yes, it’s going to take a long time to recover. I don’t think it’s going to get back to normal for at least another year.

Q:  Based on your experiences, what advice would you share with other businesses facing similar challenges?

A:  We often use the word “partnership” between vendors and customers. We are making it thru these challenging times because of the true partnerships we have on both sides, with our vendors, and our customers. Everyone is understanding, being more flexible and forgiving, and more willing to accommodate than before. Pardon the pun, but everyone is “in the same boat” on this.  We need to work together to get through it.

talent

Hiring Supply Chain Talent: What to Look for In the Perfect Candidate

If your business is growing, maybe it is the right time to hire new talent. It also means facing the challenge of the dearth of supply chain talent and overcoming it. It is pretty common to find business growth these days with job titles evolving and shifting because of quick changes in supply chain management and the latest technology-oriented needs. With several businesses trying to remain competitive there is more demand for talent. Management of the ways you will use to seek the supply chain talent can make or break your organization. Here are some attributes you need to watch out for.

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Soft skills: Most recruiters normally have a list of around thirty job skills that they are looking out for while reviewing the candidates. It is pretty common for the supply chain industry. Soft skills are the top priority for producing more successful recruitment. Some of them include email marketing skills, fundamental business ethics, communication skills, and problem-solving skills. All of these may be identified via past job experience of the candidates, references, and the responses they provide to some key questions at the time of the job interview. When you are looking to hire globally you can take help from PEO services.

Inventory, finance, and supplier management experience: Watch out for earlier experience in financial, supplier, and inventory management together with direct knowledge. These are the important components of the skill sets required for a hire. If the candidate has financial management training in fields such as investing it is a massive advantage. Maybe this talent did not go through massive numbers every day in his earlier position. But there will be sufficient indications of whether the candidate has the requisite understanding of data utilization for making solid business decisions.

Education and area of interest: You need to look out for candidates that have certifications and university training. Some of the specific things you must look out for include participation in projects that involve a basic understanding of financial matters and problem-solving that is related to them. Sometimes even the way they handle personal finances could show something about their work skills. You need to look for talent that has enthusiasm, passion, and energy for the position he or she is applying for. For instance, they would have researched and displayed knowledge about an organization and how their skills could benefit this business.

Result-oriented track record: Ask the prospective candidates, not just about their earlier job responsibilities. Ask them to correctly quantify the results also. Try and find out people that will produce some examples of the projects they have accomplished with good results in their resumes. It should demonstrate that they had to work with supply chain departments, service providers, and suppliers. You also need to be flexible and open-minded while considering the top talent from other industries and fields. There are many candidates out there that are working in other professions. However, they have transferable skills that can make them the right candidate for your supply chain.

Hire female candidates: Women are under-represented in many industries and it’s imperative that we find ways to bring them into the fold. In order to remain competitive in the future of supply chain management, it is important that you consider hiring female talent for roles usually reserved for males. They can take on roles that men have traditionally held, but with some added perks- they’re better at relationship building and interpersonal skills which will be important for certain jobs. The best way to find a replacement for your position is by interviewing applicants who have the skills you need. This will allow you get more personal insight into their personality, knowledge of procedures, and ability-to-efficiently perform job duties than if they were applying without being interviewed first. You can also look at female workers’ resumes or career paths during mentorship programs that involved working closely with seasoned professionals in similar fields.

Conclusion

There are challenges involved in securing the supply chain talent at the moment, especially for filling out the necessary positions. it is a good idea to change your approach. You need to examine the staffing forecast, be aware of the specific needs and trends from historical data, and develop a talent management program. After doing all this, you need to take a closer look at the candidate pipeline that is capable of fulfilling the continuous hiring requirement. The organizations that perform well are the ones that consider the recruitment department as a value-added and strategic program.

U.S. Canned Vegetable Imports to Surpass Previous Year’s Record of $1.5B

IndexBox has just published a new report: ‘U.S. – Canned Vegetables – Market Analysis, Forecast, Size, Trends and Insights. Here is a summary of the report’s key findings.

In Q1-Q3 2021, the U.S. imported 576K tonnes of canned vegetables worth $1.3B, which was 23% more in physical terms and 17% more in monetary terms than in 2020. Over the full 2021, U.S. imports are estimated to hit the previous year’s record of $1.5B. China, Canada and Peru remain the leading suppliers of canned vegetables to America.

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U.S. Canned Vegetable Imports by Country

Canned vegetable imports into the U.S. were estimated at 704K tonnes in 2020, increasing 14% against 2019 figures. In value terms, purchases amounted to $1.5B (IndexBox estimates).

China (165K tonnes) constituted the largest canned vegetable supplier to the U.S., accounting for 23% of total imports. Moreover, canned vegetable supplies from China exceeded the figures recorded by the second-largest supplier, Canada (82K tonnes), twofold. The third position in this ranking was occupied by Peru (73K tonnes), with a 10% share.

In value terms, Spain ($204M), China ($192M) and Canada ($183M) were the largest canned vegetable suppliers to the U.S., with a combined 37% share of total imports.

In 2020, the average canned vegetable import price amounted to $2,192 per tonne, declining by -4.9% against the previous year. Prices varied noticeably by the country of origin; the country with the highest price was Greece ($4,441 per tonne), while the price for China ($1,162 per tonne) was amongst the lowest. In 2020, the most notable rate of growth in terms of prices was attained by Thailand, while the prices for the other major suppliers experienced more modest paces of growth.

Source: IndexBox Platform