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Joint Ventures and Global Trade

Joint Ventures and Global Trade

When people hear the term “joint venture” a series of images and business operations come to mind, but in the trade industry, it’s a game changer. The most important questions to remember in a joint venture is the overall goal: what is being achieved as well as who’s bringing what to achieve the goals? Without these answered, there is almost no foundation to uphold supporting efforts.

Northern Ireland Business Info provides insight as to what it takes to implement a promising joint venture relationship, and you might be surprised at how managing these processes might be when several hands are in the basket. Everyone wants a piece of the pie, but in doing so, there must be a level of balance and mutual understanding.

Forming a joint venture can provide promising initiatives, and when done the right way, can produce fruitful benefits. Keep in mind, these are human beings you’re working with. Each person has their own set of strengths and weaknesses, and it takes a level of careful, balanced transparency to determine how to move forward.

Remember the common denominator within each of the recommendations boils down to one simple act: communication.

NIBusinessInfo states that building trust, planning, flexibility, monitoring and solutions to problems are key factors to maintain and implement for a successful joint venture. Each and every one of these tips requires transparency and communication – an honest assessment each step of the way identifying what is and what isn’t working, how things can improve, and what challenges to expect.

What’s not on the list is proactivity, digital solutions integration, and even more unexpected is the review of case studies. It’s alright to learn and implement new policies, but if a business can spare a costly lesson by learning from another businesses mistakes, why not?

Sage Journals provides an impressive library of case studies proving operational successes, failures, challenges and the solutions and reasoning behind each. Keep a constant finger on the pulse of your own business and the competition that is ever so present within all trade sectors around the world.

In an trade environment with tariff uncertainty, partners increasing, and technology solutions increasing, knowledge is the make or break factor of your business success. Know who you’re doing business with, keep your networks close and your communication clear and consistent.

Source: NIBusiness Info

Five-Point Plan Implemented for UK Port Success

In an effort to continue leveraging the major port’s prior successes, the UK Major Ports Group composed and implemented a five-point plan this week during the Annual Parliamentary reception, according to a release. The plans five points focus primarily on connectivity, the trade environment as well as location and the ability to develop and create a sustainable framework that boosts growth in an uncertain time.

“This is the time for ports. The current focus on Brexit and the UK’s trade with the world has shone a light on ports and their importance to the U.K. And it’s not just the current context. The ports sector is on the cusp of major technological change to radically transform the business models of major ports and many of our customers and supply chain partners. So, it’s never been a more important or exciting time to be in the ports sector. The members of the U.K. Major Ports Group are ambitious to invest more in the U.K. and grow the £7.6bn of value we directly contribute to the U.K. as well as the vital enabling role facilitating trade we provide for the rest of the economy. That’s best achieved by industry and government working together and today’s 5-point plan identifies the key areas where that needs to happen, ”  UKMPG Chair and Chief Executive of Forth Ports Charles Hammond said in the release.

The outline for the plan as follows:

-Ensure the UK has a major ports sector than can continue to thrive in a changing world

-Promote connectivity that boosts trade, productivity and sustainability

-Create a positive planning and development framework to boost investment and jobs

-Deliver a balanced environmental approach that delivers both sustainability and growth

-Makes sure the UK is well placed as a location to develop the ports of the future

Considering the fact that 95% of the UK’s trade is via the sea, the outline is a good indicator of the strength seen within a hugely successful sector in the global trade industry, even in the midst of the Brexit controversy.

Source: UKMPG

The “Deadly Dozen” and Human Behavior

Maritime safety and ensuring minimal risk impact is a topic that isn’t discussed enough. Human error is unpredictable, and until shippers evolve into a fully digitally integrated system, human hands are absolutely essential to keep business moving.

A report released  provides insight and tips to consider and leverage for improving procedures. Surprisingly enough, the majority of the high-risk behaviors analyzed are fairly common and are the determining factor between making or breaking business initiatives and successful processes.

Reducing risks while on the sea can greatly impact workers and business relationships beyond the numbers, creating satisfaction and a positive working environment. One of the most common themes in the trends highlighted boils down to simple communication: alerting, situational awareness and mindfulness of culture differences. Without effective communication, business is a shot in the dark.

Here are a few examples taken from the deadly dozen to consider:

Situational Awareness

This asks the obvious but extremely important question of, “What’s the situation?” If you can’t answer this, it’s a problem. The report advises effective communication and always leveraging your team for feedback. Remember to ask yourself WHIM: “What Have I Missed?

 Alerting

Make sure to speak up at all times. Encourage this within your team and don’t chastise an assertive or proactive approach to a potentially disastrous situation. Again, this is directly linked to effective communication. Alerts can save lives and prevent accidents.

 Communication

Understand that 30% of communication is actually verbal and different cultures have different approaches will not only reduce risks but also eliminate possible strife due to offense. The report advises implementing climate control internally and externally through considering these factors for success.

 Fatigue

Don’t overwork your crew – it doesn’t pay off and creates a toxic and risky environment. The report highlights this is an ever-present condition for workers on the sea and can create ill-health as well as present risky conditions.

Pressure

Cutting corners should never be an option. In doing so, details are overlooked, tension is caused and stress is multiplied. Ensure there’s a system of balance in place and there’s always someone keeping a finger on the pulse to verify the safety and wellness of the team. Healthy pressure can create productivity, but don’t push it.

These common-sense tips and approaches can become more difficult to implement the more demanding the market becomes. Maritime trade is one of the largest sectors the industry utilizes. Within this sector, the human element is the common denominator associated with accidents, incidents and errors.

To view the full report, visit: Human Element Guidance

 

Source: MGN 520

Global Trade Must Go On

Seldom mentioned, but nonetheless addressed, it is clear that the Hong Kong trade market along with markets around the world are not letting the current trade war between China and the U.S. hinder  the opportunities for trade growth and success.  Day 2 of the annual Asian Logistics and Maritime Conference hit the ground running, proving that nothing stands in the way for the continuation of global trade success, with or without the imposed tariffs. It goes without saying the trade war is a concern, but is nowhere close to stopping leading initiatives. 

“This is the thing that keep us awake at night,” Alexander Tarini, Vice President of Logistics for Olymel said in response to the current trade war. The potential impact the imposed tariffs could place on business efforts and trade success continues to saturate news channels and conversations at the mention of the global economy. Leaders encouraged others to focus on riding the waves of change, keep the customer first and utilize the uncertainty as a way to implement flexibility into operations.

“Hong Kong continues to be a key trading and logistics hub linking the mainland, Association of Southeast Asian Nations (ASEAN)
members and global markets through its excellent regional and global sea and air links,” according to a release highlighting the conference themes from HKTDC.

While some industry leaders expressed almost no concern over the current trade war, many provided step-by-step strategies to maintain control over the numbers, supply chain, customer relations as a means to gain peace of mind and ensure business keeps moving.

President of President, Asia Pacific Division, FedEx Express Karen Reddington urged the importance of connectivity as a key to growth success and added that, “Asia is a strong, resilient trading bloc in a globalized world, and connectivity is the key to global growth… we must keep connecting and integrating to maintain the momentum.”

The confidence of the Hong Kong market is what keeps is moving, according to Reddington and as the conversation of its future as a logistics hub, there is no question the strong infrastructure and regulatory systems already in place will determine its success.

 

Source: HKTDC

 

A Letter To The Presidents

In a letter addressed to President Donald Trump and Chinese President Xi Jinping, tariffs remained the priority topic for Freedom Partners, American for Prosperity, and The Libre Initiative. The three joined efforts to speak out regarding the trade war.

The letter consisted of a plea from the trio asking that the two reach a compromise and utilize the G20 session as an opportunity to make a change in the current tariff situations and alleviate global tension.

The group noted that both parties seem “open to negotiations to drop tariffs” that will benefit everyone and the upcoming session provides a source of encouragement. The importance of employment opportunities and affordable goods and services were also key points mentioned to back up the plea.

“There is great urgency for the United States and China to come together and reach an agreement to eliminate tariffs and protectionist trade policies,” they wrote. “The continued escalation of tariffs has come at significant cost to the global economy. It has harmed businesses, farmers, consumers, workers, and families worldwide, inflicting higher costs, lost jobs, and uncertainty.”

As of today, there has not been a response reported from either of the presidents but some wonder if they will address this publicly as their global leadership position was called out and challenged. The letter was  summarized with demands to “End the trade war and come to an agreement on free trade to relieve businesses, consumers, workers, and families worldwide from any further collateral damage.”

Source: freedompartners.org

RECORD BREAKING NUMBERS REPORTED FOR FLORIDA PORT

Port Everglades released information this week boasting an impressive 1,108,465 TEUs for fiscal year 2018 – the highest number recorded to-date for the Port.  The Northern Europe shipping activity and increase in overall consumer population are factors being attributed for the substantial numbers.

Chief Executive and Port Director Steve Cernak stated, “We’ve enjoyed a robust growth period and are moving forward with significant investments to maximize the use of our land, cranes and berth space,” in response to the Port’s growth.

In a proactive attempt to leverage this year’s momentum, the Port plans on investing $1 billion over the next five years towards efforts for infrastructure improvements. This is one of the strategy’s the Port plans on utilizing to continue increasing cargo volumes, according to the release.

Port Everglades will also be undergoing additions to the structure including expansion efforts such as, “adding new cargo berths, installing new Super Post-Panamax container gantry cranes, increasing the lift capacity on existing cranes, and deepening and widening the Port’s navigation channels,” (Port Everglades).

The numbers for the Port are as follows:

-Three percent overall year-over-year increase

-Port Everglades handled 15 percent of all Latin America trade

-The Port handled 37 percent of overall trade in the Florida state region

As the Port continues through the next year, industry competitors and experts alike need to consider such strategies and should learn from the initiatives that prove successful time and time again.  We will continue to monitor Port Everglades and report on additional numbers as they are released.

For additional information on Port Everglades and their cargo initiatives, visit porteverglades.net.

Source: Port Everglades

As sales of U.S. soybeans to China plunge amid trade dispute, exporters need a new strategy to access international markets

Trade tensions between the United States and China are being felt across America’s heartland.

Prices for soybeans have tumbled and stockpiles are growing with the harvest nearly complete because exports to China, the largest foreign destination for U.S. soybeans, have plummeted. The latest federal data, through Oct. 25, shows American soybean sales to China have declined by 97 percent from last year’s harvest.

In response to U.S. tariffs placed on billions of dollars of Chinese goods, China imposed a 25 percent tariff on U.S. soybeans and shifted to buying soybeans from Brazil and other countries. Since tariffs were announced in June, the going rate of U.S. soybeans has fallen from roughly $10.50 a bushel to $8.34, as of Oct. 30, according to Markets Insider.

The timing of the trade dispute couldn’t be worse for American farmers. The USDA has forecasted that U.S. soybean production in 2018 harvest would rise to an all-time high of 4.6 billion bushels, up from 4.4 billion bushels a year earlier. The federal estimate for Illinois, the top-producing state, shows an increase of 12.4 percent to 688 million bushels.

While farmers hope for a new trade deal, there is urgency to find alternative markets for the oilseed. One of the keys to diversifying the U.S. export market lies in a 20-foot-long steel box.

Shipping containers dominate international trade. Yet, they are not widely used in U.S. agricultural exports. The movement of soybeans in 20-foot or 40-foot-long containers has represented 5 to 7 percent of total U.S. soybean exports in recent years. Bulk ocean vessels and rail to markets in Canada and Mexico are the current primary transportation methods.

But to enter new markets, smaller shipments will be needed, and container shipping is the solution. It offers several advantages over bulk vessels, including:

-Soybeans shipped in containers are generally higher in quality because they are handled less, reducing the amount of split and broken soybeans and foreign materials.

-Smaller importers can buy the measured quantities they demand, ordering soybeans only when they need them, as opposed to taking positions for large deliveries on bulk shipping vessels. “Just-in-time” inventory management, popularized by the Japanese and now prevalent throughout manufacturing, cuts costs and reduces waste.

-In the event there are logistical problems, the demurrage for containers is much lower than that of entire vessels, thereby minimizing the overall financial risk.

-Buyers seeking high-value or specialty soybean products can buy direct from smaller exporters. Importers in Japan use containers, for instance, to preserve food-grade soybeans.

-Customers can have their orders fulfilled much quicker. Three to four weeks is the typical turnaround time for the container shipping to Asia, compared with three to four months via the bulk vessel channel.

U.S. soybean exporters have been able to nurture markets in Taiwan and Indonesia by shipping in containers. Indonesia is now one of the largest importers of soybeans. In addition to producing animal feed, Indonesia uses soybeans to make foods such as tofu and tempeh.

Thailand, Vietnam and other countries in Southeast Asia are also using more soybeans as household incomes grow. Income growth leads more meat consumption, which in turn fuels demand for soybean-based animal feed.

Smaller international markets in Asia, Europe and Africa are perfect for container shipping because they haven’t achieved the economies of scale required to use the bulk transportation system.

Shipping by container also will help solve a major problem in the logistics industry. More than 11 million maritime containers arrive at U.S. ports each year. Most of those are coming from Asia, containing televisions, furniture, sneakers and other manufactured goods. But the imbalance of trade between Asia and the U.S. means about half of those are returning empty.

All this empty space on ships is a multi-billion-dollar loss for shipping companies, exporters and importers. Soybeans and other grains can take advantage of backhauling opportunities for ocean carriers repositioning empty containers.

Momentum to ship soybeans by container is growing. Soybeans loaded into containers in Illinois reached a new high of 66 million bushels in the 2017-18 marketing year ended Aug. 30, according to Informa Economics IEG.

But that represents about 10 percent of soybean production in Illinois, so there is a lot of room for growth. Illinois is the nation’s top producer of soybeans, is close to a sizeable supply of available containers and has several major railroads converging in the Chicago area.

The American economy depends on the exporting of soybeans and other crops. Even if China lifts the tariffs on soybeans, the trade standoff has sharply illustrated the need to cultivate new markets. Shipping by container can help lead the way.

Eric Woodie is a trade analyst with the Illinois Soybean Association’s Checkoff Program, and has over a decade of experience in export trade, foreign markets, and inland logistics.

 

Our 2018 Picks for the Top 100 Cities for Global Trade

Each year, Global Trade magazine takes the time to look at U.S. cities to guide our readers to the best places to do business.

We choose these cities based on many factors: what they’ve done, what’s planned, and how global trade has responded to them. As with any list like this, there is always room for interpretation, but we feel that each of these cities, from the country’s largest to some tiny cities, all deserve to a look from anyone interested in doing business in the United States.

THE NATIONAL ECONOMY AND TRENDS

The economy of the U.S. is stronger than it has been in decades. Record low unemployment, rising wages and high consumer and business confidence are all contributing to huge growth in the economy. The fundamentals of the economy are strong and don’t appear to be weakening soon.

Many businesses and industries that had abandoned the U.S. for cheaper shores are returning due to changes in tariffs and economic realities. Notable is the return of the steel industry, which was all but dead in the U.S. but now appears to be making a quiet resurgence.

On the horizon are areas for concern, depending on whom you ask.

The current administration succeeded with renegotiating some trade agreements, as evidenced by the creation of USMCA to replace NAFTA, but trade with China is still a huge question mark. China’s government doesn’t appear to respond to strong-arm tactics, and they have a large enough economy they may be willing to battle with the U.S. administration.

Some economists predict a mild recession in 2109, but most offer different reasons for this. Without a consensus, it’s hard to believe these predictions will come to fruition.

 

THE BEST CITIES FOR GLOBAL TRADE

Each category of this list allows business leaders to look at locations in which to open or relocate a business.

Multi-Category Winners

These cities deserve mention in several categories. Most times, these are America’s largest cities and are obvious candidates for many categories….

 

New York City(Export/Financial Hub)

New York City is an obvious choice for several categories. As the heart of the global financial community, with Wall Street and most of the world’s largest banks, New York is arguably the global financial center. The Port of New York and New Jersey is still the second busiest in the world. The Big Apple is the launching point for millions of global businesses.

 

Seattle(Export/Skilled Workforce/Financial Hub)

Seattle has been a global trade leader for over a generation. With its well-protected port, and as the home of such businesses as Amazon and Microsoft, skilled workers and financial services have flocked to the city. Few cities in the world offer the global trade access that Seattle does without massive populations.

 

Chicago(Export/Intermodal)

The Windy City has been the entry point to and exit point from the heart of the United States. It is still the ideal location to import and export goods. Its intermodal strengths include a massive highway system, river barges and rail that allow the movement of goods within the country with ease. The St. Lawrence Seaway provides access for ships of every size to go into and out of the Great Lakes.

 

Detroit(Export/Financial Hub/NAFTA/USMCA/Business Incentives)

Despite a legendary crash of the auto industry and bleak images of a downtown in shambles, the Motor City is still an economic powerhouse. With easy access to the Great Lakes and Canada, Detroit is an excellent place to do business with America’s second largest trade partner, Canada. The economy in Detroit has led to business incentives that rival or best anything being provided by the Southern states.

 

Miami , Florida(Export/Skilled Workforce)

More than pristine beaches, Miami and its high-tech port are an excellent location for import/export. There is also an abundance of skilled workers who have arrived in the city, many of them immigrants bringing an intimate knowledge of other nation’s economies and markets.

 

Dallas(Export/Intermodal)

The Big D is a place with a Texas-sized economy and the assets to keep it that way. The intermodal assets in the city make it an ideal location to bring goods in via air or the nearby Gulf ports and ship it to the booming South and into the Mountain states.

 

San Francisco(Financial Hub/Cities to Watch)

San Francisco has been a financial hub since the Gold Rush, and it continues to show its prowess by attracting financial business from Silicon Valley and the large, but hidden, economy of Northern California. The Golden Gate City makes our list of cities to watch as it is going through a growth spurt and, if the city leaders adapt well, will solidify San Francisco’s place among such cities as Hong Kong, Singapore and Los Angeles as a Ring of Fire powerhouse.

 

Charlotte, North Carolina(Financial Hub/Start-Relocate a Business)

There are few cities like Charlotte. Maintaining much of its old Southern Charm, this city has modernized overnight and is attracting some of the best businesses and minds in the country. The quality of life, the vibrant economy and the entrepreneurial spirit of the city make it an ideal place to start or relocate a business. The financial sector makes Charlotte a quiet giant, home to billion-dollar deals and a large investment community.

 

Minneapolis/St. Paul(Financial Hub/Skilled Workforce/Business Incentives)

The Twin Cities have been and are home to many of the nation’s largest financial institutions. It maintains its place as one of the best educated cities in the country with great colleges and universities and a quality of life that keeps people there. The region’s economic developers are committed with loans and grants to help businesses grow and thrive in the area.

 

Durham, North Carolina(Financial Hub/Start-Relocate a Business)

At one point of the Research Triangle, Durham, North Carolina, is on our list of places to start or relocate a business. With abundant workers, from unskilled to highly skilled, arriving to the region every day, it’s an ideal place to put most types of business. The financial sector in Durham is growing as the surrounding states are welcoming large global businesses with staffs that need local financial services.

 

Memphis, Tennessee(Intermodal/Business Incentives)

The Mississippi River flows past this city, known for its music life. The river along with a well-established intermodal system make Memphis a perfect spot from which to import and export. Bringing business to the city is made easier by incentives that often lead the nation in their boldness. Memphis sits at the heart of the South, centrally located to move goods and people up and down the entire country.

 

El Paso, Texas(Export/NAFTA/USMCA)

There might not be a better city to trade with Mexico and South and Central America than El Paso. Right on the Mexican border, with one of the best intermodal systems in the region, El Paso makes it easy to do business with America’s southern neighbors.

 

Austin, Texas(Start-Relocate a Business/Skilled Workforce/Quality of Life)

In a state famous for its rugged individualism, Austin is a place built on community growth and shared wisdom. This has attracted tens of thousands of skilled workers and created a capitol city that is friendly to residents and new businesses. Altogether, this makes Austin one of the coolest cities from which to launch one’s global empire.

 

Cheyenne, Wyoming(Start-Relocate a Business/Small Market)

With just 64,000 residents, Cheyenne is a small city that has a lot going for it. Wyoming is leading the nation in business climate, according to the Tax Foundation. This, combined with a commitment to small and medium-sized businesses, makes Cheyenne a great place to start or relocate a business. Still small enough to have that small-town feel, Cheyenne has a full-sized business climate.

 

Bismarck, North Dakota(Start-Relocate a Business/NAFTA/USMCA/Small Market)

Along the Canadian border there is a business boom that is quietly eclipsing the country. North Dakota’s oil rich economy is creating a perfect environment for starting or relocating a business, particularly if you’re looking to do business with Canada. North Dakota’s capitol city is small (72,500 souls) but is moving up the ranks of business-friendly cities.

 

Sioux Falls, South Dakota(Start-Relocate a Business/Business Incentives)

Sioux Falls, like Bismarck, is enjoying a statewide boom in energy. One of this small city’s biggest assets is the incentive efforts that are made to welcome and grow businesses. The leadership is very creative with assistance to bring jobs to town. Starting or relocating a business in the city is a powerful way to take advantage a great small city in a state that offers outstanding tax rates.

 

Texarkana, Texas(Business Incentives/City to Watch)

By far the smallest city on our multi-category list, Texarkana has a unique history that makes it a city to watch. In the Panhandle, it is on the Arkansas border and very near the Louisiana and Oklahoma borders. Once home to the U.S. military’s largest weapons depot, this city has rail lines to spare and buildings that were literally built to withstand a bomb (or decades of business). The leadership offers amazing incentives and works with businesses to get them what they need. A tiny Texas giant, this is a city poised to lead the nation in growth.

 

Des Moines, Iowa(Quality of Life/City to Watch)

There are many nice cities, but Des Moines stands out. The moderate climate and Midwestern charm make it a great city to live in. The business climate continues to improve, making this gateway to the Plains a perfect place for any concern looking to bridge the distance between Chicago and the East and the energy of the Upper Plains states.

 

San Diego, California(NAFTA/USMCA/Skilled Workforce)

The largest city on the Mexico border, San Diego is the perfect place to do business with its southern neighbor and the nations farther south. Its climate and abundant activities attract more and more skilled workers every year. Easy access to the whole state of California, with 13 percent of the total U.S. population, makes San Diego a great place for business.

 

Bellevue, Washington(Quality of Life/Cities to Watch)

Green and lush like it’s big sister, Seattle, Bellevue is an ideal place to live. Sitting between two lakes, Lake Washington and Lake Sammamish, it’s a wonderful place for outdoor activities, still in the warm zone created by the Puget Sound. Microsoft, Amazon, Starbucks and all the other amazing businesses of Washington state are just a stone’s throw away. This is a city that is making room for the next wave of Washington innovation.

 

Buffalo, New York(NAFTA/USMCA/Skilled Workforce)

Buffalo sits on the very western edge of New York and at the leading edge of New England’s boom. Right on the Great Lakes and the heart of an East Coast Silicon Valley, Buffalo has more skilled workers per capita than most of the rest of the country. Many of these workers hail from New York state colleges and universities. The state’s incentive commitments are forging powerful partnerships with business.

 

LISTS BY CATEGORY

Rather than clog up the lists below with the repeat winners, we’ve pulled those cities out so we can highlight the great cities that win in their respective categories.

While each category has up to 10 winners, they are presented in no particular order as each offers its own assets, such as location, that make it unique for a business’ needs.

 

Top Export Cities

These are cities that make it easy to bring goods in and send goods out. Many have deep-water ports, or like El Paso have import/export assets that are outstanding.

-Houston, TX
-Los Angeles, CA
-New Orleans, LA

 

Top Financial Hubs

Banks, investment firms and stock brokers flock together to allow them to share information and often, because the city’s data capabilities are high enough to prevent a slowdown of information from around the world. Another significant reason to choose a city is its proximity to a growing industry that needs financial services.

-Richmond, Virginia
-Lincoln, Nebraska

 

Most Advanced Ports

The level of automation and quality of the dockside equipment in a port can hugely influence how quickly products are offloaded or put onto a ship. The ports on this list lead the nation in innovation, reliability and speed.

-Port of Long Beach, Port of Los Angeles
-Port of Savannah, Georgia
-Port of Virginia (Norfolk), VA
-Port Houston
-Port of Oakland Oakland, California
-Port of Charleston (South Carolina)

 

Intermodal Access

The ability to move from ship to train to truck to plane or any combination can mean the difference between shipments in days or weeks. The cities on this list provide the fastest and most intermodal access for shipments into or out of the United States. Some are located inland and allow for transport to the central part of the country. Others are coastal and act as the jump-off points to waters surrounding the country.

-Kansas City, Missouri
-Indianapolis, Indiana
-Columbus, Ohio
-Atlanta, GA
-Portsmouth, Virginia
-Elizabeth, New Jersey
-Little Rock, Arkansas

 

Start or Relocate a Business

This is the list of cities that are the best in the country for starting or relocating a business. Low start-up costs, an excellent business environment and plenty of qualified staff make these cities the ideal places to create a new global trade empire.

-Oklahoma City
-Missoula, Montana
-Billings, Montana
-Raleigh, North Carolina
-Grand Rapids, Michigan

 

NAFTA/USMCA Access

The latest update to NAFTA, the USMCA appears to be a modernization of the now 25-year-old agreement. The cities on this list provide a home base for any business seeking to work with the most important U.S. trading partners, Canada and Mexico. Most are near the borders, providing the ease of access to the U.S., while being ideally placed for shipments into and out of the northern and southern neighbors.

-Albuquerque, New Mexico
-Corpus Christi, Texas
-Fort Lauderdale, Florida
-Laredo, Texas
-Peoria, Illinois

 

Quality of Life

Business is important, but everyone needs to live some place that they love. This list represents the nicest places to live in the country. Where living is good, business is also excellent. Although not a strictly business category, the list compiles cities to consider if you need a great staff. Being someplace that people want to live makes it easier to attract great workers.

-Colorado Springs, Colorado
-Madison, Wisconsin
-Denver
-Huntsville, Alabama
-Portland, Oregon
-Las Cruces, New Mexico

 

Best Business Incentives

Incentives for businesses are thought of as being cash or tax credits, but many cities here offer many more diverse choices. Among them: free land or buildings, free education for staff, and many other attractive incentives.

-Omaha, Nebraska
-Salt Lake City
-Boca Raton, Florida
-Cleveland, IN

 

Skilled Workforce

Every business needs a great staff. In this era of near full employment, finding the right qualified staff can be a challenge. The cities on this list have a disproportionate number of educated laborers. For companies seeking a place to be that will give them the world’s greatest employees, these are places to be.

-Boston
-Washington, D.C.
-Milwaukee

 

Leading Southern Ports

The South is in the midst of a decade or more long boom. The area from Florida to Louisiana has some of the world’s greatest ports, providing a gateway to a powerful economic engine. These ports vary in size and volume, but all of them represent some of the best places in the world to move products into and out of the United States.

-Port Miami
-Port Everglades (Florida)
-Port Tampa (Florida)
-Port New Orleans
-Port Canaveral (Florida)
-Port South Louisiana
-Jacksonville Port Authority (Florida)

 

Small Markets (<100,000 population)

These small cities make a big imprint. Large cities are expensive and crowded, while these are small enough to be inexpensive, easy to move around in, and easy to be “a big fish in a small pond.” Look to these cities to be offered the respect you deserve.

-St. George, Utah
-Wilson, North Dakota
-Denton, Texas
-Bozeman, Montana
-Burlington, Vermont
-Ft. Myers, Florida
-Enid, Oklahoma
-Holland, Michigan

 

Cities to Watch

These are cities that deserve attention for their economic climate and the efforts that the leadership and the great citizens are putting in to make their cities great places in which to live and do business.

-Kenosha, Wisconsin
-Dumas, Texas
-Madison, Wisconsin
-Baltimore, Maryland
-Jersey City, New Jersey
-Fremont, California
-Odessa, Texas
-Birmingham, Alabama
-Reno, Nevada
-Irvine, California
-Marietta, Georgia
-Decatur, Illinois
-Little Rock, Arkansas
-Tulsa, Oklahoma
-Peoria, Arizona

ROLLING WITH TARIFFS

In 2008, my best friend Terry and I were at lunch talking about what we wanted to do with the rest of our lives. We were both fifty-something serial entrepreneurs who were in between ventures. Friends since college, we both loved cycling but hated hills. We loved the concept of electric bicycles but hadn’t found a really great electric bike.  So, we decided to create our own. Over lunch, we designed our first bike on a napkin. And Pedego Electric Bikes was born.

Flash forward 10 years. Pedego is now the No. 1 electric bike company in the United States. Our bikes are sold in more than 100 Pedego-branded stores in 20 countries. Our revenues have grown 76 percent in the past two years. We were at the top of our game.

Then there was a game changer. In August, the U.S. government enacted a 25-percent tariff on nearly 300 Chinese-made products, including electric bikes. The tariffs affect every Chinese-made bicycle, electric or not, as well as nearly 5,000 other Chinese-made goods in a wide variety of industries, from aluminum and steel to farm equipment and baby cribs. Our story is just one example.

As early as June, there were rumblings coming from Washington D.C. about possible tariffs on Chinese-made electric bikes. On July 23, I testified in front of a U.S. Trade Representative’s panel to protest bicycles being on the tariff list because they did not fit the goals of preventing China from stealing intellectual property (there is no intellectual property on bikes) or bringing bike manufacturing back to the United States. There is no way to manufacture affordable bicycles in America. In fact, it would double the price of an electric bike to build it here.

I wasn’t alone in testifying. An attorney for the Trek Bicycle Co. of Wisconsin, one of the world’s largest bicycle companies, was also there as well as a representative from People for Bikes, a nonprofit devoted to increasing cycling in the United States. We weren’t just there for our companies; we were there to help the entire bicycling industry. We argued that tariffing bikes would accomplish none of the tariff’s goals and would greatly hurt the bicycle industry by increasing costs for every type of bicycle: from inexpensive kids bikes to high-end road bikes as well as the growing category of electric bikes.

We were each given five minutes to speak, but unfortunately, our testimonies fell on deaf ears. The first tariff went through on Aug. 23, a week earlier than expected. We had two containers from China come into port the next day, costing us more than $100,000 in tariffs that we hadn’t expected. Luckily, our volume of summer sales allowed us to withstand this blow, but it had to be a one-time thing.

We had already planned our expansion to Vietnam in response to the European Union’s 83 percent tariff on Chinese-made electric bikes, which was announced in the spring. With the August confirmation of U.S. tariffs on Chinese-made bikes, we decided to move our manufacturing entirely out of China. In addition to moving production to two factories in Vietnam, we also are manufacturing at a second factory in Taiwan. Both Vietnam and Taiwan are no-tariff countries.

Moving our manufacturing out of China doesn’t mean we won’t pay tariffs. We will still pay tariffs on Chinese-made bike parts. For example, one part that is almost entirely made in China is the throttle, a part that is on every single Pedego electric bike.

The number of Chinese-made parts on our bikes vary by the model. For example, our Pedego Interceptor Cruiser is made of about 80 percent Chinese parts while our newest bike, the Pedego Conveyor commuter bike, is made of only about 20 percent Chinese parts. To further reduce the impact of the tariffs, where possible, we will source more of our parts from tariff-free countries outside of China.

We have always sourced bicycle parts from about a dozen countries worldwide in an effort to utilize the most high-quality components available. For example, our new Conveyor is made from parts from 10 countries including Japan, Germany, France, Indonesia, Italy, Czech Republic, Taiwan and the UK, all of which are currently free from bike tariffs.

While I’m a big believer that our government should be run like a business and that leveling tariffs is, in theory, a good idea, the U.S. cost of Chinese-made goods is likely to increase dramatically in the United States. For example, our average electric bike costs $3,000. Adding 25 percent to cover the cost of the tariff would bring the cost to $3,750, a huge increase for the customer. However, our foresight in planning our move to Vietnam and luck in being able to make it happen quickly has enabled us to keep our prices fairly stable. Our entry-level electric bike remains priced at $2,299, the same price as it has been for four years. We did not increase prices on our newest bikes, which includes the Pedego Elevate electric mountain bike. Our mid-range bikes had a modest increase of just 8-10 percent.

However, just as we thought we were out of the woods, the U.S. announced a new tariff on bicycle accessories of 10 percent that went into effect in September. These tariffs aren’t just on bikes or even recreational products. In fact, the U.S. is now tariffing $250 billion worth of Chinese-made products in a variety of industries, accounting for more than half of the Chinese goods coming into America.

All companies that manufacture products on the tariff list must figure out a solution. If they stay in China and incur the tariffs, do they increase prices? Do they cut quality? Do they simply eat it? Or, like us, do they simply move away?

 

 

Don DiCostanzo is the CEO and co-founder of Pedego Electric Bikes, the No. 1 electric bike company in the U.S. according to Navigant Research. Email him at Don@Pedego.com.

And see 

Global Trade’s 2015 cover story on Pedego at www.pedegoelectricbikes.com/global-trade-magazine-peddling-to-a-global-market.

 

 

DHL GLOBAL TRADE BAROMETER CONTINUES TO FORECAST TRADE GROWTH, ALBEIT SLOWER

Global trade continues to grow, according to October’s three-months forecast from the DHL Global Trade Barometer (GTB). The index for global trade now stands at 63 points, which is a decline of four points on the previous quarter’s forecast, indicating an overall slightly slower pace of growth. In the GTB methodology, an index value above 50 indicates positive growth, while values below 50 indicate contraction.

The overall slight reduction is largely driven by lower growth rates of air trade. The respective index value declined by eight points to 62. In contrast, the growth rate for global ocean trade merely decreased by one point to 63 points. Regarding the GTB’s seven constituent countries, this quarter sees a mixed picture with a threefold differentiation: India as the only country with simultaneously increasing and very high prospects for trade growth, the UK with an unchanged outlook, and all other countries with slightly diminishing prospects.

Despite intensifying global trade disputes, mainly between China and the U.S., these countries remain in growth mode, however, at a slower pace. American growth prospects slowed down by five points to 63, while the Chinese trade outlook decreased by four points to 59. Most other constituent countries witnessed decelerating trade dynamics, too: South Korea–still one of the previous forecast’s strongest growth drivers–saw its outlook reduced by five points to 69. Likewise, Germany’s trade growth forecast was reduced by six points to 58. The outlook for Japan went down by three points to 64.

UN REPORT: TRADE WAR THREATENS OUTLOOK FOR GLOBAL SHIPPING

The outbreak of trade wars and increased inward-looking policies threaten the prospects for seaborne trade, projected Mukhisa Kituyi, secretary general of the United Nations Conference on Trade and Development at October’s Global Maritime Forum’s Annual Summit in Hong Kong.

Kituyi’s warning while launching the 2018 edition of the UNCTAD Review of Maritime Transport came against a background of an improved balance between demand and supply that has lifted shipping rates to boost earnings and profits. Freight-rate levels improved significantly in 2017 except in the tanker market, supported by stronger global demand, more manageable fleet capacity growth and overall healthier market conditions.

Seaborne trade expanded by a healthy four percent in 2017, the fastest growth in five years, and UNCTAD forecasts similar growth this year, subject to Kituyi’s warning over trade and tariff wars: “Escalating protectionism and tit-for-tat tariff battles will potentially disrupt the global trading system which underpins demand for maritime transport.”

MYANMAR AT BOTTOM OF GLOBAL INDEX ON ILLICIT TRADE

The Transnational Alliance to Combat Illicit Trade (TRACIT) in October called for Myanmar to urgently step up efforts to fight illicit trade. Myanmar’s structural difficulties to effectively address illicit trade is evidenced in its very low score in the 2018 Global Illicit Trade Environment Index.

The index was produced by the Economist Intelligence Unit (EIU) and evaluates 84 countries on the extent they enable or prevent illicit trade. Myanmar ranks 82nd out of 84 countries evaluated, with an overall score of 23.0 (out of 100).

“This means that—apart from Iraq and Libya—Myanmar shows the poorest structural defense against illicit trade,” said TRACIT Director-General Jeffrey Hardy. “It also means we have a lot of work to do here, especially in the areas of illegal logging and mining, wildlife and human trafficking, spirits, beer and cigarette smuggling, and counterfeiting of all types of consumer goods.”

“We’re trying to solve illicit trade in all possible ways,” reported U Ko Lay, director of the Myanmar Ministry of Commerce. “But we need law and order first and that will pave the way for legal trade.”

COMMERCE UNDER SECRETARY SIGNS INDUSTRY COLLABORATION AGREEMENTS

Under Secretary of Commerce for International Trade Gilbert Kaplan met in Singapore with officials from the U.S. Chamber of Commerce, Singapore Business Federation (SBF) and Singapore Manufacturing Federation (SMF) in September to update and expand the Department of Commerce’s framework for U.S.-Singapore commercial collaboration.

The discussions were part of a broader trip that Kaplan led to India, Vietnam and Singapore to advance the U.S. government’s new Indo-Pacific Initiative by helping American companies navigate market challenges and by enhancing trade promotion efforts.

In his remarks, Kaplan emphasized that “our partnership with Singapore has been a great representation of the mutually beneficial outcomes we hope to accomplish throughout the broader Indo-Pacific region, especially with all of the gains we have seen since the United States and Singapore signed our bilateral free trade agreement 15 years ago. This includes the Commerce Department’s work with Singapore’s business organizations, who have been great friends and partners of the U.S. government and U.S. business community over the years.”

GPA APPROVES $92 MILLION RAIL EXPANSION

During a September meeting of the Georgia Ports Authority (GPA) board of directors in Atlanta, $92 million was approved for the Mason Mega Rail Terminal, a project that will double the Port of Savannah’s annual rail capacity to 1 million containers and deliver the largest on-terminal rail facility in North America by 2020.

“It is no accident the GPA is constructing rail capacity as the demand for rail is growing,” said GPA Board Chairman Jimmy Allgood. “As part of our strategic planning two years ago, our team identified the growing role intermodal cargo would play in GPA’s long-term success and put into place this plan for expansion.”

The GPA also announced it had moved 375,833 TEUs in August, an eight-percent increase over August 2017, while handling 86,200 intermodal TEUs represented a 33 percent jump.

PORT MANATEE, CARVER MARITIME INK LONG-TERM TERMINAL PACT

Port Manatee and Carver Maritime LLC in August entered a long-term marine terminal operating agreement for a 10-acre aggregate offloading facility at the Florida Gulf Coast port.

The Manatee County Port Authority-approved agreement lasts for as many as 20 years (including options) and ensures property lease payments totaling $1.8 million for the initial five-year term, in addition to wharfage payments for annual cargo throughputs.

“We, along with our customers, are excited about this opportunity, and very much look forward to a long and fruitful relationship with Port Manatee, as well as its tenants,” said Carver Laraway, president of Altamont, New York-based parent firm Carver Companies. “The projected growth of Central Florida and the business-friendly environment of Manatee County make us eager to call it home.”