Logistics Management

A coalition of prominent shipper associations has urged Congress to ask Customs and Border Protection (CBP to conduct a prototype program on its proposed "10 + 2 Rule" before making a final decision on its full implementation. This seems reasonable and practical.
The proposed rule requires 10 new categores of data to be collected on U.S.-bound shipments 24 hours before loading in foreign ports, and raises serious concerns for both large and small shippers sourcing goods from overseas manufacturing sites.
As the recent breakdown of the World Trade Organization negotiations in Geneva indicates, U.S. shippers are no longer ruling the global roost. Implementing this proposed rule now would only raise the cost of doing business for them when they can least afford it.

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In a plea for reason, the International Air Transport Association (IATA) is calling upon world governments to abandon punitive environmental taxes in favor of a more balanced -- and effective -- approach to cutting carbon emissions. IATA's four-pillar strategy focuses on technology investment, efficient operations and infrastructure, and positive economic measures. According to IATA, this is a comprehensive solution based on business realities, and designed to circumvent "green grandstanding" currently in vogue with our politicians. 

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As U.S. shippers try to meet the surging demand for raw materials and high-end manufactured goods, the main challenge has been to locate containers, chassis, and outbound carriers. A much more serious impediment has surfaced now that the International Warehouse and Longshore Union has stalled its contract talks with the Pacific Maritime Association. Last week the bosses instructed their gangs to "go slow" with loading cargo. The result: one vessel departing from the Port of Tacoma sailed minus 83 boxes. While we understand the collective bargaining process of the union, this kind of behavior reflects poorly on the ILWU, and brings into question its sincerity and good faith during negotiations.

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Michael Berzon, chairman of the National Industrial Transportation League's ocean transportation committee, recently told LM that a dockside work disruption on the Pacific Rim can be mitigated by sound planning.
"The alternative ports on the U.S. east coast have been explored," he said, "as have those in Mexico and Canada. Shippers are not going to be caught off guard again if the west coast shuts down."
Berzon, who also works as a consultant for Fortune 500 companies, advises his clients to have continegency plans in place for other emergencies as well.
"I tell them that a 'plan B' is simply not enough," he said. "They have to have a plan C and D as well. Natural disasters and other unforseen catastrophes can cripple a supply chain, too. Shippers must stay flexible and keep their options open."

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The numbers are in, confirming what we in the trade community long suspected. U.S. exports are still strong, and it seems to signal a significant trend. According to the Department of Commerce, real exports of goods and services increased by 6.5. percent in the fourth quarter followed by an increase of 5.4 percent in the first quarter of 2008. This six-month surge kept our otherwise troubled economy from sinking further and gives trade analysts reason to hope for a rebound sooner than later. Indeed, the overall economy grew by 1 percent in the first quarter, and analysts suggest that demand for our cargo was an important element in that equation. Trade policy makers had better take notice, especially when it comes to renewing existing treaties and agreements.

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When the House Transportation and and Infrastructure's Coast Guard and Maritime Transportation Subcommittee met late last week, shippers were given a forum to fume about an archaic and exploitive price-fixing system that should be scrapped. Among those championing a Congressional review of the U.S. Shipping act were leaders from the National Industrial Transportation League, The Agriculture Transportaiton Coalition, and National Customs Brokers and Freight Forwarders Assocation of America. All expresed optimism that the sun may finally be setting on so-called ocean carrier "talking agreements" that are anti-competitive in the extreme. But now that law-makers are listening, will they act?

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Old-fashioned piracy is still a major threat to ocean cargo vessel operators in many parts of the world, trade analysts tell us, but it does not represent the extension of politically-driven terrorism. According to the Rand Corporation, the objectives of the two crimes are quite different, and merit distinct responses. Indeed, the study's findings suggest U.S. policy makers pay  too much attention to "worse-case terrorist scenarios"  rather than focusing on pirate attacks against commercial fleets. Meanwhile, Rand is advising carriers to make greater use of enabling communication and defensive technologies, while accepting more transparency in their corporate structures.

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While many shippers are concerned that a deal between the Pacific Maritime Association and the International Longshore and Warehouse Union may not be be signed by the July 1 deadline, industry analysts tell us that a new contract is a foregone conclusion.

"A reprise of the deadlock six years ago is not going to happen," says one insider, "Labor has management over a barrel. Shippers can't send all of their cargo through the Suez, as the U.S. East Coast ports are already maxed out."

The current waterfront contract covers 26,000 ILWU-represented longshore workers at 29 West Coast ports in California , Oregon, and Washington. The union is likely to wait until the 11th hour to sign an agreement, but you can bet they will prevail when all is said and done.

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Late last month U.S. Customs inspectors at the Port of Oakland intercepted $22 million in fake "designer" goods in a shipping container from China. An x-ray machine used to detect radioactive material from terrorists discovered the mis-declared cargo, comprising luxury brands like Gucci, Rolex, and Prada.

While one might not ordinarily associate "bling" with terrorism, the link between these black market commodities and the global criminal network is well established.

Consumers should be made aware that buying these knock-offs fuels human trafficking, drug smuggling, and yes...weapons for the bad guys.

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Maritime Day came and went this past week without much industry fanfare, but shipping analysts are telling us that there is good reason more attention should be paid to this annual celebration. According to Drewry Consultants in London, ocean cargo carriers will have trouble attracting enough qualified crewmen and officers to meet the demand of oncoming oceanbourne capacity. The only solution, they say, is to increase wages and salaries, thereby putting more price pressure on vessel operators...and ultimately the shipper.

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