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How Your Business Can Benefit from Importing Under Section 321

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Archives, Global Trade Daily, Imports/Exports

How Your Business Can Benefit from Importing Under Section 321

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Import taxes often have a huge impact on businesses, especially U.S. e-commerce companies that rely heavily on goods made overseas. Many of these companies are drastically lowering their import costs by taking advantage of a little-known U.S. customs statute, Section 321. Let’s look at how these businesses are benefiting.

Section 321 Cuts the Costs of Chinese Imports

What you’re importing and where you’re importing from can considerably affect the duty rates you have to pay. While this applies to lots of countries around the world, China is a central focus for many U.S. businesses. In 2020, Chinese exports to the United States topped a whopping $430 billion! And shipping directly from China to the U.S. can often cost around 20% in import taxes.

The high price of bringing goods from China to the United States was exacerbated by recent trade tensions between the U.S. and China, respectively the world’s largest consumer of goods and the world’s largest manufacturer of goods. Over half of the overall trade between the U.S. and China has been negatively impacted. The affected U.S. businesses report that the increased tariffs have considerably raised their operating costs, and many of these companies turned to Section 321 and Canadian fulfillment companies for economic relief.

How Does Section 321 Work?

Section 321 allows for the duty-free importation of qualifying goods into the United States that are valued at $800 or less. But most companies buy from China and other countries in much higher quantities at much higher dollar values. A problem, right? There’s a simple workaround to that: bring the goods to Canada, where import tariffs are much lower than they are in the United States.

A company can, for example, buy a shipment of Section 321-eligible goods valued at, say, $8,000 from China, and have them sent to Canada. Then they can have those goods brought to the U.S. in ten separate $800 shipments, on ten separate days, without paying about $1,600 in total U.S. tariffs they would otherwise incur if they imported in bulk directly from China to the United States.

Who Handles Section 321 Goods on the Canadian Side?

That’s where a Canadian fulfillment company comes in. Using a “pick-n-pack” process, Canadian fulfillment companies receive bulk shipments at a Canadian warehousing facility that’s usually strategically located close to the U.S. border. The “picking” part includes pulling items from large shipments and readying them for smaller orders that often go to multiple locations. The “packing” gathers these items according to customer needs and requirements.

From receiving the goods to final delivery confirmation, a good fulfillment company will have the ability to handle and electronically track every shipment. A good fulfillment company is also skilled in “kitting,” taking items from multiple SKUs and bundling them together under one SKU for a more economical and streamlined shipping process.

Section 321 is a Speedy Solution

Can anybody bring goods into the U.S. under Section 321? Technically, yes, but not everyone can do it with the same speed and efficiency as fulfillment companies. The detailed documentation that U.S. customs requires has to be perfect and delivered before the shipment gets to the border if you want to get the goods through smoothly. How? Fulfillment companies enjoy participation in the Section 321 Data Pilot Program, allowing them to submit the needed documentation electronically to ensure their clearance is ready before the shipment arrives at the border crossing.

And the closer to the border the better. Many Canadian fulfillment companies are close enough to the U.S. border to guarantee same-day fulfillment, bringing products into the United States that are then handed off to U.S. carriers including FedEx, UPS, and DHL for swift delivery to their ultimate destinations.

It’s been famously said that the only two certainties in life are death and taxes. But that may not be entirely true. At least not the second part if you’re taking advantage of Canadian fulfillment and Section 321.

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Archives, Dispatches, Global Trade Daily, International Trade

INDIA, SOUTH AFRICA AND INDONESIA JOIN THE WORLD LOGISTICS PASSPORT

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The World Logistics Passport (WLP), a major policy initiative established to increase trading opportunities between emerging markets, announced in February that India, Indonesia and South Africa became members, joining Colombia, Senegal, Kazakhstan, Brazil, Uruguay and the UAE in a club of trading nations sharing expertise to smooth trade flows around the world.

The WLP creates opportunities for business across Africa, Asia, Central and South America to improve existing trading routes—and develop new ones—through the world’s first logistics loyalty program for freight forwarders and traders. It overcomes non-tariff trade barriers by fast-tracking cargo movement, reducing administrative costs, advancing cargo information and facilitating movement between ports and air.

“The World Logistics Passport increases resilience in global supply chains and removes the barriers that prevent developing economies from trading as freely as they might, which is more important than ever as governments around the world seek to recover from the economic impact of COVID-19,” said Mike Bhaskaran, the WLP’s CEO.

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Archives, Global Trade Daily, Imports/Exports

Colombia Traviesa Harvest Report: La Niña Reduces Yields As Prices Soar

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The previous 12 months have been among the most stable and profitable that the Colombian coffee-producing industry has witnessed for more than a decade. The internal buy rate offered to producers by the Federacion Nacional de Cafeteros de Colombia (FNC) reached new highs between Q1 and Q2 in 2020 and has stayed there ever since.

Meanwhile, there were favorable weather conditions in the crucial run-up period prior to last year’s main harvest, which helped to produce strong yields and high-quality beans. The high prices and strong yields created a much-needed windfall for many farmers in 2020, who only six months prior to this were gravely concerned about the potential impacts of COVID. 

So as we enter the smaller mid-season harvest, known as the traviesa, I’ve spoken to a number of producers in Colombia to understand the expectations for this harvest and the factors that will shape it.      

A Quick Look at Prices

A large proportion of commercial coffee producers, particularly those with small and medium-sized farms, sell their beans either to local cooperatives or to the FNC, rather than on the open market. These trade bodies offer producers an internal buy rate, which is a guaranteed price at which they will buy crops. 

The internal buy rates offered to producers can fluctuate daily and are determined by a number of factors – beyond simply what the current open market rate is for coffee in the global commodity markets. While the end price does of course have a big impact, other significant factors include the strength of the dollar against the peso, and the push and pull between supply and demand specifically with regards to the FNC and cooperatives having to fill futures contracts.

April 2020 was the previous peak of the buy rate offered by the FNC – with prices per carga (125kg of parchment coffee) at one point hitting COP 1,315,000(USD $352). And while the price has naturally fluctuated a little since, it’s reached new heights in April 2021, with COP 1,340,000 (USD $359) being the highest ever daily price offered to growers. 

As Manuel Londono of Las Brisas told me “the price has been very high [since the beginning of the harvest], with cooperatives and the FNC now offering incentives to growers to sell to them.”

The FNC buy rate also acts as an unofficial peg for prices offered by local cooperatives and private buyers. Sara Marquez of El Deseo explained that “the Cooperativa Los Andes generally pays a little more than the FNC, [and so far during March of this harvest] the price has been good, between COP 1,150,000 and COP 1,200,000, with private buyers paying slightly above this still – depending on the quality.”  

A Very Wet Wet-Season

Colombia’s coffee-growing regions have experienced far more rainfall than usual this year. This is due to the effects of La Niña – an irregular climate event that started last September and is forecast to continue until the middle of 2021 – which causes higher than average rainfalls in the region.    

This is going to negatively impact yields, as reduced levels of sunlight during prolonged rainy periods limit growth. Sara Marquez of El Deseo explained that, “last year we had a very big harvest in volume and quality, but because of the rain, there has not been a good flowering this year.

But a decrease in sunlight isn’t the only problem that the prolonged rains bring. As Paula Concha of Finca Santa Helena told me “these precipitations also decrease the availability of nutrients since the fertilizers are lost by leaching and runoff and the plants close their absorptive processes and therefore the quality of the bean is also affected.”

However, La Niña does have one silver lining in that the rains have kept the destructive crop beetle la broca at bay, with every grower I spoke to confirming that this has not been an issue during the harvest. 

A Hangover From the Last Harvest

Aside from the impact of La Niña, yields during this traviesa are being curtailed for another reason; the impact of last year’s main harvest. This was a bumper harvest for many producers, thanks to favorable weather conditions across the country, with just the right amount of rains, followed by a good dry season.

As Elkin Arcila of ASCAFE explained, “This traviesa is smaller in volume than last year’s – at the end of last year we had a very good harvest so the plants didn’t have the time to recover in time for this harvest.”

This was echoed by Sara Marquez of El Deseo who said “the traviesa production is reduced this year as coffee behaves in a similar way to a bi-annual crop and last year we had a very big harvest in both volume and quality.” 

La Niña is no doubt compounding this, with heavy rains and a reduction in sunlight further reducing the growth of plants that haven’t had time to recover from last year’s main harvest. But unlike the impact of La Niña which is being felt across the industry, the impact of the last harvest is only being felt by those producers who had bumper yields. For others, this will not be an issue.       

Competition for Workers

A major concern for many smallholders during last year’s traviesa was getting enough workers to complete the harvest, due to COVID-related travel restrictions making it difficult for workers to travel to farms. However, among the producers I spoke with, none of them cited COVID as a major concern this harvest with regards to sourcing workers, as while there are still some travel restrictions and lockdowns or curfews, they are far less onerous than this time last year.

But that’s not to say that labor shortages aren’t causing headaches this year as well. Competition for workers within the wider agricultural industry has been fierce this year. Most notably, the stiffest competition is coming from hass avocado producers, as production is now booming in Colombia, thanks to recent trade deals with the US and China. 

As Elkin Arcila of ASCAFE Tamesis explained “the workforce has been limited, with hass avocado harvesting affecting our recruitment.” Inevitably, this is leading to higher wages for workers, but the general consensus is that these wages have dropped slightly from last year, when COVID-restrictions were being felt far more severely and therefore limiting the mobility of labor.   

Looking Ahead to the Main End-of-Year Harvest 

The traviesa is usually a sign of what’s to come in the main harvest each year, which takes place between November and January. In which case, the outlook is mixed.

On the one hand are prices. The consistently high prices since the beginning of last year have defied expectations. There was a sharp jump in prices at the beginning of the pandemic, in response to the large gains the dollar made against the peso. However, even as the peso has recovered some of its value, prices have remained high and as of the end of April 2021, have reached record highs once again. 

It would be impossible to predict with certainty if prices will remain this buoyant by the time the year’s main harvest arrives. However, if the effects of la niña continue well into the second half of the year, then production could be significantly down in Colombia’s neighbor Brazil – the world’s largest coffee exporter. There, they face the opposite problem to Colombia – drought. The Brazilian government’s agricultural agency Conab has said the harvest could shrink by a third in a worst-case scenario. A reduction in output anywhere near this would be bound to keep prices high in Colombia.

But on the other hand, low yields could be a feature of the main Colombian harvest too. The increased rains have stunted plant growth, while continued heavy rains would exacerbate the problems being experienced now with poor flowering and the washing away of nutrients. However, it’s far better to be facing uncertainty when you have near-record prices, which thankfully, the industry still has. 

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Written by Jennifer Poole, the co-founder of Colombian specialty coffee supplier Those Coffee People. Based in Medellín, Colombia, Jennifer spends her time traveling to remote towns and villages in search of the best specialty coffee the country has to offer.

rare earth
Archives, Global Logistics, Global Trade Daily, Imports/Exports

Expanding the Supply Chain for Rare Earth Materials

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From cars and construction equipment to cell phones and military weapons, rare earth materials are critical to manufacturing many important things businesses and consumers use on a daily basis. While people around the world rely on these minerals in their everyday lives, China produces 80% of the U.S. rare earths and has been doing so for quite some time.1 What’s made things even worse over the past 12 to 18 months is a global pandemic. Many consumers stuck at home decided that their current cell phone or computer needed to be replaced, which ultimately caused a shortage of these materials that is affecting various other sectors including the automotive and electronic industries.  

Expanding the supply chain means the production of at least 17 minerals indispensable to manufacturing both consumer and government necessities would not be solely sourced from China.2 However, this won’t happen overnight. The process of having a fully diversified supply chain is several years away due to the planning, process and permitting it takes to both open a mine and build a factory. 

New Rare Earth Production Will Open the Global Supply Chain 

Fortunately, new entrants into the market have begun mining projects throughout the world that are mining for tungsten, one rare earth particularly in demand for important items. This is extremely important as China has limited the amount of tungsten exports that can be shipped to the U.S., which has caused a great deal of concern regarding the overall supply chain of this rare material.  

Tungsten is used in the construction and content of both semiconductors and anodes. It’s also used in a wide array of products from the filament of light bulbs, electric furnaces, and X-rays for medical and industrial imaging, to lead-free fishing weights and golf clubs, and drill bits and saw blades.3 In fact, tungsten is also used for the production of glass syringes – a product that has become very high in demand during a global pandemic that relies on the worldwide distribution of vaccines.4  

This is why it’s imperative to diversify the supply chain for rare earth materials like tungsten. Efforts made by new mining projects throughout the world will increase both supply levels and exports back to or within the U.S., which will benefit the overall supply chain of tungsten for production and manufacturing.  

One mining project in South Korea is of particular importance. The Korea Tungsten project in the Sangdong Mine hosts one of the largest tungsten resources in the world. This mine was the leading global tungsten provider for more than 40 years and has the potential to produce 50% of the world’s tungsten supply. The project is steadily becoming the center of focus for resource experts, miners, investors, shareholders around the globe.  

What the Future Holds for the U.S. 

President Biden is working hard toward a significant infrastructure plan that is also meant to serve as 50% cut in emissions by 2030.5 The infrastructure proposal includes $174 billion in spending to create electric vehicle charging stations in addition to other roadway enhancements while also touting both tax incentives for electronic vehicle battery makers for building factories and the creation of new manufacturing jobs in the U.S. However, 70% of the world’s EV batteries are still currently built in China because that’s where most of the materials used to build them are located.5 Until the new rare earth production players are up-and-running in mining and manufacturing, there remains an immediate issue for those working in the coal mining and traditional auto manufacturing industries when it comes to making a pivot in their careers to clean energy sector that is to come in the U.S.  

Even so, the future of mining and manufacturing rare earths remains to be seen in the U.S. While China dominates a majority of rare earth mining and manufacturing, their domination didn’t happen overnight. For approximately 30 years, China has been building its supply chain in addition to re-evaluating it every one to five years. With export restrictions to the U.S. now hindering the demand of popular consumer goods and materials, it’s important for the U.S. and other countries around the world to evolve and diversify their own supply sources, but it will take time to make the change. 

Editor’s Note: Lewis Black is CEO of Almonty Industries, a leading global company involved in the mining, processing, and shipping of tungsten concentrate. For more information please visit www.almonty.com. 

 _______________________________________________________________________

Sources: 
1: https://www.wsj.com/video/tech-companies-depend-on-china-for-rare-earths-can-that-change/674228C1-D75A-4598-8597-D68108CDA45F.html  
2: https://www.eetimes.com/china-will-dominate-rare-earth-supply-for-decades/  
3: https://sciencing.com/info-8363311-things-made-out-tungsten.html  
4: http://ipimediaworld.com/wp-content/uploads/2017/10/Tungsten-in-the-production-1.pdf  
5: https://www.nytimes.com/2021/04/24/business/bidens-climate-change.html  

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Archives, Global Trade Daily, News

Intellectual Protection Efforts from United Arab Emirates (UAE) cause United States to lift UAE from Watch List of Intellectual Protection (IP)

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United Arab Emirates (UAE) reaches a new milestone in Intellectual Protection (IP) from the United States Trade Representative (UTSR) decision to remove UAE from the watch list for IP protection and enforcement. In the UTSR annual report, it was reported that the UAE applied adequate and effective measures to protect and enforce intellectual property rights as per IP related international standards and global best practices. The annual report highlights the compliance and increased efforts of UAE that lead to the removal of the watchlist after longstanding IP concerns.

The UTSR stated in the report on global IP compliance that the UAE made progress on longstanding IP enforcement lead by federal authorities and local governments pushing a series of IP enforcements on longstanding IP enforcement standards. The decision holder H.E. Sultan Ahmed Bin Sulayem, CEO and Chairman of DP World Group and Chairman of Ports, Customs and Free Zone Corporation (PCFC), welcomed the decision of the taking the UAE off the watchlist and underlined the UAE for the commitment in implementing IP regulations.

H.E. Sultan Ahmed Bin Sulayem stated, “We are pleased that Dubai Customs’ IP efforts have contributed to this achievement by the UAE. This underpins strategic plans to increase foreign trade growth, in fulfillment of the wise leadership’s directives and particularly the trade roadmap vision approved by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, which sets out a five-year plan to boost Dubai’s foreign trade to Dh2 trillion,” as he boosted over UAE performance.

Efforts by Dubai UAE POV:

H.E. Sultan Ahmed Bin Sulayem explained that Dubai Customs has been actively engaged in tackling the illicit trade of counterfeits, while being in full corporation with the US and other foreign bodies. The Dubai Customs works in tandem with the IPR departs to enforces intellectual property and trademark laws by making sure that any IPR infringing goods are seized to prevent from entering local markets.

H.E. Ahmed Mahboob Musabih, Director General of Dubai Customs said, “Dubai Customs has long been steadfastly committed to intellectual property rights protection. In 2005, we established the IPR department, the first of its kind at the level of customs authorities in the Middle East, with the aim of optimizing coordination amongst different customs units and centers in the area of enforcement and protection of intellectual property rights,” when describing Dubai Customs efforts in protecting IPR laws.

In 2021, Dubai Customs organized twelve workshops to introduce training of distinguishing between counterfeit products targeted at 1,394 staff and students. This training led to Dubai Customs resolved 81 intellectual property disputes, with an estimated value of Dh 11.3 million and recycled 510,000 counterfeit items for 26 international brands.

The Director of the IPR department, Yousuf Ozair Mubarak, mentioned that Dubai Customs teams constantly communicate with US and foreign countries to understand their needs and requirements in respect of protection and enforcement of the IP rights to ensure business interests of their partnering organizations.

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Archives, Global Logistics, Global Trade Daily, Stories

HOW COVID-19 TOOK THE SUPPLY CHAIN TO A NEW PLACE

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The COVID-19 pandemic is not a one-off supply and demand disruptive event that will disappear into obscurity. It has left indelible marks on supply chain practices and practitioners. The not-so-strange thing is that many of these marks are positives. In the spirit of “never waste a good crisis,” supply chain practitioners and technologists face a post-pandemic recovery armed with a set of new systems and practices. 

Two of the most important of these new systems and practices involve supply chain agility and supply chain risk management. 

Supply Chain Agility: Supply chain agility is how well a supply chain responds to uncertainties by quickly adjusting operations (and sometimes tactics) while still meeting crucial success metrics. Agility wasn’t born in the pandemic. It came from the digital transformation of the supply chain. The combination of large volumes of real-time data from the IoT and advanced analytical techniques to mine new insights led the way for supply chain practitioners to pursue supply chain agility. However, the pandemic exponentially accelerated the adoption of supply chain agility and transformed it from a practice to a strategy. 

The chief supply chain officer of a multi-billion-dollar consumer goods company wrote during the peak of the lockdowns that for every dollar spent on supply chain agility, the return is 10x against traditional supply chain planning methods. Supply chain agility contradicts what many practitioners have been taught over the past decades. Experts have traditionally focused on efficiency and consequently pursued the lowest unit cost dream. By utilizing optimization techniques, we have sought to minimize procurement costs while absorbing larger order quantities and longer lead-times. We plan for longer manufacturing runs to drive a higher return on assets and full-container load land and marine freight to reduce transportation costs. Agile supply chains exist almost as the antithesis of efficient supply chains.

Supply Chain Risk Management: As companies emerge from the pandemic with an eye on recovery, there is a new appreciation for the role risk management plays in supply chain operations. Supply chain is essentially a decision-making game. Experts decide how much to make, move, buy, and sell. Supply chains have traditionally been driven by the financial cost of such decisions: procurement and production costs, the cost of expedited freight, and the cost of unmet orders. However, the COVID-19 crisis has taught us what should have been obvious to many, that risk trumps cost. Risk, if not properly managed, poses an existential threat to a manufacturer. So why has it been ignored, or relegated to a strategic supply chain design role?

Risk must be identified, evaluated and, when appropriate, mitigated. When making a supply chain decision regarding material sourcing or production, the risk spectrum will take its place alongside profitability in the process.

The pandemic has lifted the importance of supply chains within the boardroom. No longer just a cost center or necessary evil, supply chain is now viewed as a source of transformational and competitive differentiation. Thanks to COVID-19, thanks to toilet paper shortages, and long lines at Costco, my children now understand what a supply chain is. No longer do I need to explain what I do in my job.

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Shaun Phillips is director of Product Management at QAD DynaSys, a division of QAD Inc., which began solving planning issues for food and beverage companies from an old bakery in Strasbourg, France, three decades ago. QAD DynaSys is now a leading provider of digital supply chain planning solutions in the areas of forecasting, planning and supply chain optimization. 

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The Solid Biofuel Market Grows Steadily Despite the Pandemic

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

The solid biofuel market continues to grow steadily. The pandemic generated financial and logistics problems for producers, but this failed to disrupt output, as a result of the consistent demand for long-term supply contracts. The production of wood pellets remains the fastest-developing segment on the solid biofuel market.

Key Trends and Insights

The solid biofuel sector remained stable during the pandemic, buoyed by existing long-term supply contracts. Despite facing disruptions in supply chains, constrained cash flows, and stagnating investment into new projects, solid fuel producers managed to sustain production levels and keep staff working.

The global pellet market grows rapidly with a CAGR of +11.9% a year over the past 8 years, emerging as the fastest-developing segment on the global solid biofuel market. Europe (44.8%) and North America (29.8%) remain major global pellet manufacturers (IndexBox estimates). China indicated the highest rate of production growth (with a CAGR of +31.1%) over the period from 2012 to 2020. Due to asynchronous quarantine measures in countries , the procurement of raw materials (sawdust) was disrupted, which emerged as a crucial issue for pellet manufacturers during the start of the pandemic in early 2020. Along with the ease of lockdowns in the second half of 2020, the supply chains were gradually readjusted.

The global charcoal market continued to expand at an average annual rate of +1.0% over the past 8 years and estimated at 56M tonnes (IndexBox estimates). The highest rate of consumption growth was observed in Africa (CAGR, +2.1%), the leading producer of wood charcoal worldwide (62%): in many low-income African countries, charcoal remains the main fuel available for cooking and daily living requirements.

According to IndexBox, the global solid biofuel market is forecast to reach 129.6M tonnes in the period to 2030 (this includes wood pellets and wood charcoal). The increasing demand for renewable fuels and the shifts towards a circular economy are set to remain the key market drivers. The use of plant residue (rice husks, straw, sugarcane, rapeseed, oil palm, and sugar beet etc.) as a raw material for the production of solid biofuel, is set to become increasingly prominent as a result of the robust crop yield.

Solid Biofuel Consumption by Country

The countries with the highest volumes of solid biofuel consumption in 2020 were the UK (9.4M tonnes), Brazil (6.6M tonnes) and China (5.2M tonnes), together comprising 21% of global consumption. Ethiopia, Nigeria, the U.S., the Netherlands, India, the Democratic Republic of the Congo, Germany, Italy, France and Viet Nam lagged somewhat behind, together accounting for a further 32%.

In value terms, the largest solid biofuel markets worldwide were China ($5.4B), Ethiopia ($2.9B) and Brazil ($2.7B), together accounting for 28% of the global market. The UK, India, Nigeria, the U.S., the Democratic Republic of the Congo, France, Germany, the Netherlands, Italy and Viet Nam lagged somewhat behind, together comprising a further 26%.

The countries with the highest levels of solid biofuel per capita consumption in 2020 were the Netherlands (170 kg per person), the UK (139 kg per person) and Ethiopia (42 kg per person).

Solid Biofuel Exports by Country

The U.S. was the key exporter of solid biofuels in the world, with the volume of exports amounting to 7.3M tonnes, which was near 27% of total exports in 2020. Canada (2.9M tonnes) occupied an 11% share (based on tonnes) of total exports, which put it in second place, followed by Latvia (7.8%), Russia (6.2%), Denmark (5.4%) and Viet Nam (4.6%). The following exporters – Estonia (1,070K tonnes), Germany (784K tonnes), Poland (681K tonnes), Austria (652K tonnes), Lithuania (616K tonnes), Portugal (616K tonnes) and Indonesia (570K tonnes) – together made up 19% of total exports.

Exports from the U.S. increased at an average annual rate of +18.9% from 2012 to 2020. At the same time, Denmark (+50.4%), Poland (+16.0%), Indonesia (+12.0%), Estonia (+11.7%), Latvia (+11.0%), Russia (+10.6%), Canada (+9.8%), Lithuania (+9.0%), Viet Nam (+8.0%) and Austria (+3.9%) displayed positive paces of growth. Moreover, Denmark emerged as the fastest-growing exporter exported in the world, with a CAGR of +50.4% from 2012-2020. Portugal experienced a relatively flat trend pattern. By contrast, Germany (-1.4%) illustrated a downward trend over the same period.

In value terms, the U.S. ($1B) remains the largest solid biofuel supplier worldwide, comprising 19% of global exports. The second position in the ranking was occupied by Canada ($408M), with a 7.6% share of global exports. It was followed by Latvia, with a 7.2% share.

Source: IndexBox AI Platform

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Archives, Commentary, Global Trade Daily

How to Develop an International Digital Marketing Strategy

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Expansion into new markets can spell great success for businesses; it creates an opportunity to target new markets and grow a global customer base, thereby increasing revenue. Digital marketing can be used by brands to reach a global audience but developing an international digital marketing strategy can be very different from developing a domestic one. To be successful, businesses must carefully consider the audience and market they want to reach.

How Can Digital Marketing Help Businesses Expand Internationally?

The world is becoming increasingly digital, with consumers finding all their news, engaging with brands, and buying products, online. With so many people making purchases online, it’s easy to recognize the value of developing an effective digital marketing strategy when addressing a new market; companies can reach international audiences faster when using different digital media channels. This includes the likes of social media, PR campaigns, content marketing, SEO, and email marketing. Having a diverse strategy that uses different mediums increases the likelihood of a company getting a good response. When one channel doesn’t resonate with your audience, another one will.

How to Build a Digital Marketing Strategy for International Audiences

Recognizing the value of a digital marketing strategy doesn’t guarantee success. A successful digital marketing strategy requires careful and methodical thinking. Here’s our guide for e-commerce business owners on how to build and implement an effective digital marketing strategy for international audiences.

Define Your Buyer Persona

The first step of international digital marketing is to collect data on your target audience and develop a buyer persona. Hitting the right audience with the right content is fundamental, and if your strategy is focused on drawing the interest of your customers it will be more likely to drive interaction and conversions. To identify the type of customer you want to focus your campaigns on, take the following steps.

Start with market potential and socio-economic factors

It’s important you understand consumer potential and consumer projection. You can collect this data using information about the population, GDP growth, public infrastructure, consumer analytics, minimum wage, and average pay. Your goal is to identify a demand for your product in a new market and ensure your target consumer is in a position where they can buy your product for its current price.

Consider local culture and customs

You need to recognize the socio-cultural environment in which your target audience lives. You should consider traditional beliefs, values, lifestyle, behaviors, culture and worth ethics, and the organization of society. This will give you an idea of how your audience lives and helps avoid potentially controversial situations that could stem from a lack of understanding of local culture when brainstorming campaign ideas.

Once you have all the information you need, you can start to build your target buyer persona. A buyer persona should cover all the relevant demographics, including gender, age, location, language, education, industry, job title, income, and family status. When defining buyer persona, you should also consider psychographics including goals, problems, solutions, objections, and traditional values. Using this data during ideation will help you create campaigns that see the best results and are cost-effective because you don’t need to push for it to reach the biggest possible audience – you can simply focus on your potential buyers.

Competitor Analysis

Carrying out a detailed competitor analysis is also a key aspect of developing a digital marketing strategy for a new international audience. Collecting information on competitors will help you understand the market, target your audience more effectively, make a forecast of foreign market potential, analyze similar products and track the economic climate. Using these insights to shape your digital strategy can help you to achieve effective customer acquisition.

When carrying out a competitor analysis, there are some key characteristics you should look out for. We have listed some below to help structure your evaluation:

-Number of employees

-Number of customers

-Years on market

-Budget

-Clients

-Investors

-Acquired brands.

You should also look to source information on their target audience and product details:

-Primary audience

-Secondary audience

-Target audience

-How they communicate with consumers

-Product

-Product details

-Pricing

-Customer reviews.

This data will help you understand what works and what doesn’t in this new market. You should also keep prices, dates, and other information in mind when creating digital marketing campaigns.

Implement International SEO

Implementing search engine optimization (SEO) in your digital marketing is crucial for ensuring your website can be found by your new target audience. Here are some techniques you can use to become more accessible in a foreign market:

Making an SEO-Friendly Domain

Creating a separate website can bring more than just SEO benefits. You can cater this site and your brand in a way that will provide the best possible experience for your target customers in the new market.

You have two main options when choosing a domain for your website: Country Code Top-Level Domain (ccTLD) that ends in a specific country code (e.g. .co.uk) or Generic Top-Level Domain (gTLD) that is not country-specific and can be paired with organizations (e.g. .org).

A ccTLD helps search engines recognize that your website targets a specific location and is generally seen as more trustworthy by native users. However, a gTLD benefits from any domain authority of the parent domain and can rank in local SERPs quicker. Long term, ccTLD has stronger ranking potential due to its strong location signal, but it requires its own digital marketing strategy, particularly with SEO.

Optimize for a Relevant Search Engine

It’s important you recognize the search engine you want to optimize for. Google is generally the most popular, but in countries like China, for example, Baidu is the most used search engine. This is important because different search engines may value sites differently, meaning your SEO approach should be focused on achieving rankings in that specific country.

Use Target Language Keywords

When implementing international SEO, using keywords specific to the target language will help increase rankings. Search queries are different country by country you should carry out keyword research using the search engine that is popular in the region. Working with native speaking digital marketers to carry out keyword research is crucial to ensuring there are no missed opportunities.

Diversify Your Content Strategy

You can reach audiences faster by focusing on a number of different digital marketing mediums rather than just one. SEO is effective, but pairing it with content marketing and social media marketing will help you better attract the attention of international audiences. Here are some different strategies you can use to increase your success:

Make Your Blog Multilingual

Localizing your current content for readers in the new market will help you establish yourself as industry experts in each market. Having blog content in the target language will help you be seen as a trustworthy brand.

Get Contributions From Experts

Partner with local bloggers and encourage them to write reviews of your company and product. This is another way to build authority and trust and gain access to a niche audience.

Share User-Generated Content

User-generated content can become the foundation for different digital marketing campaigns. Recognizing content written by locals will help you build a trusting, loyal customer base.

Using multiple content mediums and strategies in your international digital marketing helps to reach a wider audience and get in front of your target consumers at various stages of the sales funnel.

Making noise in a competitive online market is difficult enough, never mind if you’re the new business on the block. Following these steps will help you to build a digital marketing strategy that will win the attention of a new international audience. Your strategy is unique to you and there is no right and wrong answer, but following the advice in this article will give you the best chance of being successful.

Manufacturers handle
3pls, Archives, Global Logistics, Global Trade Daily

FULLY ADAPTABLE: MANUFACTURING IN THE AGE OF COVID-19

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We’ve just about hit the official one-year mark since the onset of the pandemic and the surge of disruption that came along with it. Essentially every sector in the logistics arena was confronted with two primary options when COVID-19 reared its ugly head: adapt or close shop. 

To avoid reiterating the same story all over again (for what probably feels like the thousandth time), we sought to understand where manufacturers stand in the environment notoriously dubbed as the “COVID age.” Painting this picture requires an expert pair of eyes that fully understand the intricacies along with obvious uniformities. We hand-selected BDP’s Global Vice President of Sales Supply Chain Solutions, Randal Holtzapple, to walk us through where manufacturers are now and how they can successfully continue operating amid an environment where seismic pressures and shifts are becoming the standard.

Holtzapple highlights significant shifts and their impact across the supply chain.

“What started with factory shutdowns in China in the first quarter of 2020 has resulted in ocean carriers bypassing major shipping ports,” he says. “Blank sailings have led to equipment imbalances and a lack of ocean shipping equipment at key ports in China and throughout Asia. Manufacturers are focused on getting their ocean containers booked and the container movement out of Asia. This is the first shift we’re seeing within the industry.”

He goes on to explain that the same increase in demand that haunted the ocean transportation sector at the onset of COVID-19 continues to be a major issue for handling capacity. This paired with the seemingly endless equipment shortage has forced some customers to seek alternative partnerships for a solution. 

For BDP, Holtzapple affirmed the company is seeing a pattern where customers with long-standing relationships with ocean carriers are now relying on their business, other 3PLs and freight forwarders to overcome challenges with bookings. 

“The second main shift evident is the request for expedited clearance and movement of cargo upon arrival at U.S. ports, as most containers and air freight shipments are arriving later than planned,” Holtzapple explains. “Many companies’ inventories have been depleted. For now, getting products for materials out of Asia is their lifeline.”

Keeping customer needs as a priority goes beyond measures taken when chaos ruled the logistics world in 2020. What the industry is seeing now is a new approach to operations with international partners, new resources, and new compliance checks and balances.

“The third shift that we’re seeing is the need to have logistics and trade solution partners versus providers that are offering the lowest cost for transportation movement,” he explained. “In the COVID environment, it’s not just about moving product from one port or airport to another, it’s about how these partners can move the product safely from new sourcing locations, compliantly. The most significant element of this shift is the focus is no longer on the lowest-cost provider. Now, it’s focused on the company that can bring the mentioned capabilities and partner with the manufacturer.” 

Thankfully, we live in an age where technology seems to always come sweeping in to save the day, albeit expensively and complexly. The key to optimizing the blend of technology and solutions is found in understanding what the customer needs are and thinking outside of the box. BDP’s experts are no strangers to this. Providing an open line of communication while supplying an array of tools and partner connections creates a resilient network the customer can depend on. If you’re not already doing this, your competitor most likely is. Holtzapple explains that having a trusted logistics partner is key for maintaining a competitive advantage while retaining customer loyalty.

“BDP offers customers several technology platforms for support, especially in the COVID world,” he says. “BDP Smart is our web-based visibility tool where customers can gain instant access to sensitive documents, track their shipments, and inventory, and rely on up-to-date information on their global booking requests and vessel schedules. An application within BDP Smart is Smart Vū, and it serves as an all-inclusive technology solution for vendor management and supplier logistics. The third solution introduced in 2020 is our self-service platform, BDP GO. This technology simplifies, streamlines and allows for digital booking of shipments.” 

The common denominator with BDP’s solutions portfolio is customer support via reliable, accurate innovation. This strategy will continue to separate the weak and the resilient throughout 2021. Beyond the platform solutions and options for data integration, refining high-level business strategies are a must. 

“The challenges caused by COVID have been a catalyst for companies to rethink and energize their global supply chains,” he said. “To remain competitive in today’s marketplace, manufacturers are taking a broader approach to the selection of logistics and transportation providers.”

Holtzapple highlights four major strategies companies are currently implementing to maintain a competitive position within the industry while retaining customers long-term. These measures are proving to be effective, despite the myriad of disruptions felt in the last year alone.

“The first strategy is the diversification of suppliers,” he says. “Companies are looking for providers that can bring solutions and innovation to their global supply chain. While costs will always remain important, companies today are looking for partners that can provide technology and innovative solutions to enhance and bring efficiencies to their supply chain.”

He explains the second strategy is simply found in the revisiting of global sourcing strategies. Regional sourcing has become the new trend, providing nimble options while recreating a dependency on sources beyond China and South Asia. 

“Companies have been crippled due to the challenges of COVID in China and Southeast Asia,” Holtzapple says. “Now more than ever, companies are looking for regional sourcing or near sourcing solutions. When a company can’t get materials out of parts of the world, the impact is significant to their overall bottom line.”

The need for supply chain visibility is the third strategy, he says. “The one thing this pandemic brought forward is the need to continue looking at solutions with technology and transparency. The goal is to break through the barriers and silos that exist and bring visibility across all business functions within an organization. Once you do that, you allow for better planning, collaboration, and optimization.”

Holtzapple cites contingency planning and sustainable business practices for the fourth and final strategy on his list. Manufacturers can no longer afford to not know where vulnerabilities are present. Instead, the need for proactivity is amplified to ensure risk mitigation efforts prove effective. This applies to workforce management just as much as it does to operations. 

BDP’s Global Vice President of Sales Supply Chain Solutions also brings to attention the seemingly foreign concept of flex workers in manufacturing. Many companies are faced with this discussion for the first time. This and other parts of the logistics equation require forward-thinking contingency planning measures to ensure the best outcomes.

“It’s safe to say that nobody’s been immune to the challenges and the impact of COVID on the global supply chain,” Holtzapple says. “Whether companies are looking to better align with strategic partners, reduce dependency on risky sourcing areas and/or re-evaluate their just-in-time inventory strategies, building a more resilient supply chain is the key lesson learned. 

“The other important thing to remember is embracing and a continued commitment in technology investment. Technology can bring transparency and foster collaboration across different business units resulting in more efficient and timely decision-making. This is key.”

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As global vice president of Sales Supply Chain Solutions at BDP International, Randy Holtzapple is responsible for creating diversification and a go-to-market strategy and overseeing a team of sales directors who are focused on selling complex supply chain solutions to large multinational companies, including some of the largest retail, consumer products, chemical and industrial manufacturing businesses in the world. Prior to joining BDP, he held a variety of managerial and sales leadership roles at other large logistics firms. He believes strongly in giving back to local communities and serves on the Board of Directors for Junior Achievement of Central Indiana. He can be reached at randal.holtzapple@bdpint.com. 

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Archives, Global Trade Daily, News

Magma Aviation Expands its Managed Fleet to Five Boeing 747-400F Aircraft

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With effect from May 2021, Magma Aviation is expanding its fleet with the addition of one Boeing 747-400F through a partnership with Plus Logistics Solutions Limited. This brings Magma’s managed fleet to five aircraft, strengthening the Magma Aviation flight network and widebody freighter capacity across the Globe.

In response to the serious impact of the pandemic and grounding of passenger fleets this has created a significant lack of global capacity, with market conditions creating a demand on capacity this is the second increase to the Magma Aviation fleet within 12 months. Now operating to and from Asia-Europe, Europe to North America, Europe to Africa, and Africa to Europe.

Magma Aviation’s reaction to the surge in the demand for freighter aircraft maintains the continued support and commitment to their clients, providing regular flying capacity to freight forwarders, logistics providers, and charter brokers. With this addition, Magma Aviation will be able to support their clients and global commerce to ensure network stability and continuity.

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Magma Aviation is a Chapman Freeborn company and a family member of Avia Solutions Group, the largest aerospace business group from Central & Eastern Europe.