Digital Edition

January 6 2020

Issue link: https://jocdigital.uberflip.com/i/1195341

Contents of this Issue

Navigation

Page 15 of 147

14 The Journal of Commerce | Januar y 6 2020 www.joc.com Shippers | Executive Commentary 2020 ANNUAL REVIEW & OUTLOOK "For the best part of the year, the carriers have been providing information that is, quite frankly, as clear as mud!" ▶ Linda Baxter "Our exporters, chafing under the world's lowest truck weight limits, must send four trucks to the port, whereas our competitors in Canada, Mexico, Europe, ship the same volume with only three trucks." ▶ Peter Friedmann ◀ "Pricing is also key, as railroads offer similar rates to truck, which is clearly a superior service." Richard J. Higgins 1A Auto, Inc. Richard J. Higgins Head of Logistics www.1A Auto.com We tacitly accept changes like ocean consolida - tions, capacity elimination, and the prac - tice of "carrier-determined" blank sailings. We also accept the inconsistencies by carriers in attempting to explain IMO 2020 regulations, fuel formulas, and the benefits (or lack thereof ) of scrub - bers versus alcohol, biomethane, ammonia, etc. Also, despite major variances in transit times, slow steaming, and erratic ship schedules altered regularly, we continue to receive steep accessorials like chassis, per diem, and other punitive charges. The Agriculture Transportation Coalition (AgTC) claim with the FMC states ocean carriers and terminal operators are mostly responsible for port congestion, then profit off it by charging demurrage, detention, and other fees. This issue accentuates the divide between cargo owners, lines, and terminals about whether these costs encourage cargo flow or just harm users. The practices at terminals in the application of rules, the five-day clock, and terminal operating hours need to be thoroughly reviewed. The FMC will endeavor to judge if the fees are rea - sonable, even though many of us have already endured excessive fines. Domestic intermodal traffic is down 6.3 percent year-to-date, according to IANA. One reason is tariffs; another is favorable truck rates and ample capacity. Pricing is also key, as railroads offer similar rates to truck, which is clearly a superior service. Our decision to convert from rail to truck is easy when we are offered inflated rates, then add in the rail-related "per diem," storage, transit time, and other seasonal surcharges. Tariffs devastated US retailers this year. The NRF, RILA, and others cautioned the administration without success. Tariffs contributed directly or indirectly to the closing and/or bankruptcy of 9,000 retail stores this year. Charlotte Russe (520), Family Dollar (390), Gymboree (800), Dress Barn (650), and Payless (2,100) are some of the many businesses hurt, and 2020 will be worse than 2019. The above dynamics continue to impact our businesses. The administration and providers noted need to be held accountable for their decisions, high costs, service levels, fees, and discre - tionary surcharges. Ace Hardware Linda Baxter Manager, International Logistics www.acehardware.com This year has been unprece- dented in terms of the challenges presented to international trade profes- sionals. And for those of us who handle both compliance and logistics for our companies, it has been a double whammy. First, compliance. For those of us that wear this hat, it hasn't been just an issue of keeping up with the mul - tiple rounds of tariffs being imposed, increased, and/or postponed, some- times with only a few days of warning. It also has been looking for every avenue to minimize the impact: filing exclusion requests, setting up first sale arrangements, looking for duty draw- back opportunities, and considering tariff engineering to move products from one HTS code into another, while, in the meantime, our merchandising group looks for ways to re-source to other countries — a time-consuming, and not always possible or practical, choice. On top of that, import profes - sionals must now educate the buyers to understand the regulations allowing for a product to be considered made in another country, since, under certain circumstances, if part of the product is still made in China, we may be potentially exposing ourselves to a transshipment penalty. And as we deal with these issues, those of us who also wear a trans - portation hat must cope with the uncertainty that has been attached all year to the looming IMO 2020 regulations. For the better part of the year, the carriers have been providing information that is, quite frankly, as clear as mud! Also, now that the car - riers have learned how to manipulate the market to drive up rates — blank sailings, anyone? — how can we be sure the figure that they finally announce will not include some extra compensa - tion to help them offset what has been an unusually weak peak season? Someone once said, "May you live in interesting times." That certainly applies to international trade these days. Unfortunately, I think it was also considered to be a curse! Agriculture Transportation Coalition (AgTC) Peter Friedmann Executive Director www.agtrans.org Obviously, our members, the US agriculture and forest products exporters, will be best served by resolution of China, Canada, Mexico, and Europe trade negotiations. While China's targeted exemptions from its tariffs temporarily benefit certain US agri - culture exports, our exporters are developing entirely new transporta- tion supply chains to access alternative markets — a challenge that will expand throughout 2020. What can the US government do to help exporters, without negotiat- ing with another country? Increase trucking efficiency. Our exporters, chafing under the world's lowest truck weight limits, must send four trucks to the port, whereas our competitors in Canada, Mexico, Europe, ship the same volume with only three trucks. This causes not only significant extra cost, but unnecessary congestion on roads and at marine terminals. 2020 may be the year that Cus - toms and Border Protection and our AgTC Export Compliance leaders eliminate unnecessary export doc- umentation penalties — costing $5,000 to $10,000 per shipment — a significant cost to US exporters

Articles in this issue

Links on this page

Archives of this issue

view archives of Digital Edition - January 6 2020