Jan/Feb 13
Volume 10 | Issue 1

World Trader

From the President: MGTA… Let’s Keep it GROWing!

Upcoming Events

MGTA Presents First-Ever Import/Exporter of the Year Award to The Scoular Company/TSC Container Freight
by Jason Lloyd, TSC Container Freight

Networking and Awards Took the Night at this Year’s MGTA Annual Meeting & Dinner
by Jason Lloyd, TSC Container Freight

U.S. $2,500 Limit for Informal Entries Takes Effect
by Eric Kulisch, American Shipper

Oil and Agriculture Change ND Fortunes
from the Associated Press

Phillips 66 Moving Bakken Oil by Rail in $1B Deal
by Zain Shauk, Houston Chronicle

Country of the Month: Australia
from BBC News and State Department

Who Said it?


From the President: MGTA… Let’s Keep it GROWing!

by John Wilson, MGTA President

John WilsonI’m honored to serve as MGTA’s 2013 President and would like to reiterate this year’s theme of growth… in business, professional development, and our global trade community. I’d like to share three key objectives that we as an MGTA Board of Directors will be focusing on this year to deliver growth.

 

  • Business network growth – With surveying and focus group discussions, we have identified four groups within our membership base that we plan to offer enhanced communication and customized networking events in 2013. Whether you’re a student or young professional just getting started in global trade or a global trade veteran or expert looking for the latest trends and ideas, our Membership committee wants to engage you in a more meaningful way. Look for our first customized event for our young (or young at heart!) professionals on February 19.
  • Professional growth – If you are looking to get the most out of your MGTA membership, consider joining one of our four committees: Communications, Membership, Professional Development Programs, or Special Events. Participation in these committees is rewarding work, but also helps you make new connections and gain industry insights. Committee charters, which outline the responsibilities and special benefits of committee members, can be found on our website by clicking on the Reports, Policies, and Bylaws link under the Members Only section.
  • Global trade community growth – We have a unique opportunity to increase the visibility and reach of MGTA given our collaboration with Cargo Business News to bring the Heartland Shippers Conference to Minneapolis, April 17-18. This annual conference rotates through the Midwest to give cargo owners and service providers the opportunity to hear and discuss industry opportunities and challenges specific to moving goods in and out of America’s heartland. We are working closely with Cargo Business News and other like-minded organizations in the Midwest to make this a successful event. I encourage you to visit our website frequently for details including a special discount for MGTA members and valuable sponsorship opportunities.

I look forward to seeing you at our upcoming events and programs. Please let me know what you think about our plans to deliver on our theme of growth this year!

Best wishes in 2013,

John Wilson, MGTA President

return to top

Upcoming Events

Import Basics

February 13, 2013
Ewald Conference Center , 1000 Westgate Drive, St. Paul, MN

This seminar will focus on the basic regulations and requirements that apply to importing product into the United States. This introductory seminar will provide instruction on general import basics, the process of importing, primary requirements applicable to all imports, including items returned, a brief overview of the usual documents, the import broker and recordkeeping requirements.

Register now

Young Professionals Meet Global Trade Leaders

February 19, 2013
Famous Dave’s, 3001 Hennepin Avenue, Minneapolis, MN

/resource/resmgr/imported/trade-young_professionals.jpgCome meet Global Trade Leaders in the Twin Cities area at the MGTA’s first Young Professionals Networking Event! The event will be ran as a Speed Networking Event allowing tables of Young Professionals time to speak with each Global Trade Leaders. Come with questions about your career, career path, or topics related to global trade. Appetizers will be provided.

Register now

Indexation in Container Freight

February 27, 2013
C.H. Robinson International, Inc., 14800 Charlson Road, Minneapolis/St. Paul Room, Eden Prairie, MN

Who should attend? Purchasing managers, ocean freight providers, 3PL, and logistics professionals

Register now

SAVE THE DATE!

2013 Heartland Shippers Conference
April 17-18, 2013
Minneapolis Marriott City Center

Learn more

return to top

MGTA Presents First-Ever Import/Exporter of the Year Award to The Scoular Company/TSC Container Freight

by Jason Lloyd, TSC Container Freight

http://www.scoular.com/wp-content/uploads/2011/05/TSC_RGB_1395C.jpgMGTA presented the inaugural Importer/ Exporter of the Year Award to TSC Container Freight and The Scoular Company at the 2013 Annual Meeting & Dinner on January 17 at the Metropolitan Ballroom. The award was presented to TSC/Scoular for its use of hedging tools in the marketplace. Jeff Mailhiot, Director of TSC Container Freight and Mike Smith, Director of Scoular BCO were present at the event to receive the award on the behalf of the company.

The Scoular Company celebrated 120 years of offering risk management services and supply chain solutions to the agricultural industry. Based in North America and serving points around the globe, Scoular serves growing segments of food, feed, and renewable fuel markets. TSC Container Freight and the Scoular Company ranked in the top 20 containerized exporters overall and in the top three exporters of containerized agricultural product.

Sharing in that success is Scoular’s NVO business, TSC Container Freight. Equipped to work with both new-to-export and experienced companies alike, TSC is supported by an extensive network of partners around the world and a substantial and committed client base in the US.

While TSC serves the marketplace by providing a full menu of logistics solutions, it is in the area of imports where they are leading the industry by introducing market tools that are changing the way markets conduct business.

After decades of enduring the ups and downs of freight rates, participants in the container freight industry can now manage some of their freight risk by using container freight swap agreements, or CFSAs, to hedge against price movements in the Asian containerized export markets.

CFSAs are "cash settled” against the Shanghai Container Freight Index, or SCFI, which is published weekly and measures composite container "freight” rates across 15 Shanghai export routes. This neutral barometer offers participants an unbiased, public instrument against which to help manage their budgets and guarantee revenue streams.

While using hedging mechanisms is common in other markets, TSC has pioneered the introduction of these tools within the container freight industry, utilizing the same brand of marketing expertise employed daily in other areas of the company. Because linking contracts to an index allows clients to forecast more accurately, it is changing how companies plan, forecast, and budget their freight.

However, the real benefit to managing freight rate volatility is pairing indexation with the essential next step, hedging. This allows parties to transfer risk between the physical and paper markets, offering the ability to truly fix prices and incentivize the physical market to execute.

More than just theory for The Scoular Company, TSC is one of the first container freight entities to put this tool to work for its customers, using it to provide fixed import rates for clients who are looking to manage their import contracts from Asia to the U.S.

The company continues to actively promote understanding of how these pricing mechanisms affect counterparties and engages in dialogue throughout the industry aimed at supporting innovative and insightful container freight advances and expanded service offerings.

MGTA established the Importer/Exporter of the Year Award to recognize achievements in the field of global trade throughout the Midwest region. The award will be presented each year at the MGTA Annual Meeting in January. Congratulations to The Scoular Company/TSC Container Freight for being recognized with the first MGTA Importer/Exporter of the Year Award!

return to top

Networking and Awards took the night at this year’s MGTA Annual Meeting & Dinner

by Jason Lloyd, TSC Container Freight

The room was abuzz again this year as MGTA held its annual dinner at the Metropolitan Ballroom. The event took place on January 17 and was host to nearly two hundred of the top global import and export trade professionals in the Midwest. 2012 President Jim Moore concluded his term at the top post for the organization. Moore reflected on key import/export accomplishments in 2012 and laid out the direction of the industry for 2013. A highlight of the evening came when Kevin Johnson of Best Buy presented The Scoular Company/TSC Container Freight with the first inaugural Importer/Exporter of the Year award. Berthelina Garcia-Marrufo was recognized as the winner of the 2012 global student scholarship, an initiative funded largely by the silent auction held at the MGTA annual dinner. The event was a great success overall and we look forward to seeing you next year.

John Wilson is the new MGTA President and Jason Lloyd is Vice President. The Association has professional development programs scheduled for 2013, including an Indexation Seminar, Import/Export basics, monthly networking lunches, Padelford Riverboat Cruise on the Mississippi, and the annual golf tournament and the Heartland Shippers conference. Please feel free to reach out to us with any questions or additional information on upcoming events.

U.S. $2,500 Limit for Informal Entries Takes Effect

by Eric Kulisch, American Shipper

A new U.S. rule raising the threshold value to $2,500 for shipments eligible for informal customs entry went into effect January 7.

As previously reported, U.S. Customs and Border Protection last month published notice of its intent to increase by $500 the limit for which merchandise may qualify for an informal entry, thereby eliminating the need for a surety bond, expediting customs clearance and reducing the amount of the Merchandise Processing Fee from $25 to $2 for electronic filings.

CBP has said a major reason for the new informal entry limit is to counter inflation, which has reduced the real dollar value eligible for expedited treatment.

The U.S. action also equalizes the informal entry threshold with that of Canada in an effort to simplify cross-border trade between the two neighbors. Both governments had committed to the change as part of the 2011 Beyond the Border Action Plan to coordinate border management in ways that spur trade and economic growth. Canada raised its threshold to (CND)$2,500 from $1,600.

"The harmonization of the value thresholds for customs clearance for both Canada and the United States will not only facilitate and expedite trade between our countries, but will also facilitate trade from other countries into either Canada or the United States,” Vic Toews, Canada's Minister of Public Safety, said in a news release. "Reducing the administrative and paperwork burden on Canadian businesses improves Canada’s competitiveness, especially for our small businesses, which are the backbone of our economy.”

Primary beneficiaries of the new procedures are express delivery companies and their customers, which are expected to see a reduction in document filing and record-keeping activity, as well as lower shipping costs.

A large proportion of the goods covered under an increased informal entry level of $2,500 are likely to involve new importing firms, which generally will be small to midsized enterprises, the Express Association of America said in a statement praising the new rule. "Raising the informal entry level will be a stimulus to the growing e-commerce industry, and numerous small and medium sized firms will share in this benefit," it said.

return to top

Oil and Agriculture Change ND Fortunes

from the Associated Press

The oil boom and high agricultural prices have changed North Dakota’s fortunes in the past decade.

In the 1990s, North Dakota was losing many of its young people and the population was stagnating, the Forum newspaper reports. During that decade, the state lost more than 24,000 people aged 20 to 34 as they left for jobs in other places.

The turnaround since then has been dramatic, thanks in large part to a soaring farm commodity prices and oil and gas production, the newspaper reported.

The state’s population increased 6.6 percent between the 2000 census and the estimate for 2011 as people moved to North Dakota for jobs. The state’s per-capita income also jumped from $25,592 in 2000 to $47,236 in 2011, an 86.4 percent increase.

Jill Wilkey, who directs the North Dakota State University Career Center, said she no longer has to endure the tedious wisecracks that were once routine at conferences for college placement centers.

"They’re not laughing at us anymore,” Wilkey said. "They’re not asking us if we ride horses to work. They’re asking about the oil fields.”

Richard Rathge, a demographer at North Dakota State University, said the big changes became noticeable in 2006. The so-called brain drain the state once suffered from losing its educated young people has been reversed, he said.
The number of nonfarm jobs in North Dakota grew 27.6 percent from 2002 to 2012. The 428,100 jobs last year represented a gain of 92,600 for the decade.

North Dakota’s net migration was a gain of 32,216 in 2010 and 30,100 in 2011.

Although wages have risen statewide, the most dramatic increases tend to be concentrated. Much of the new wealth flows from 17 oil and gas producing counties in western North Dakota, particularly in nine counties in the booming Bakken Formation.

Rathge notes that many North Dakota counties continue to lose population because most gains have come in the oifield counties.

return to top

Phillips 66 Moving Bakken Oil by Rail in $1B Deal

by Zain Shauk, Houston Chronicle

Phillips 66 has begun shipping crude by rail from North Dakota to a refinery in New Jersey in an effort estimated at more than $1 billion.

The company said this week it has signed a five-year deal with Global Partners to move oil produced in the Bakken shale play to its Bayway refinery.

The Bayway refinery, the largest on the East Coast, is already receiving crude through the deal, which will move 91 million barrels of oil over the contract term, or about 50,000 barrels a day, Phillips 66 spokesman Dennis Nuss said.

The refinery is expected to receive crude on a daily basis, except during maintenance or other interruptions in activity, Nuss said.

The oil will be moved by rail from North Dakota to a terminal in Albany, NY, where it will be loaded onto barges and shipped down the Hudson River to the Bayway refinery.

Phillips 66 did not reveal the price of the contract.

Based on the cost of shipping oil by rail at that distance and then moving it by barge, estimated at between $13 and $15 a barrel, the contract is likely worth between $1.1 billion and $1.5 billion, said Greg Haas, manager of research at Hart Energy in Houston.

The deal will leave Bayway in a strong position, with a steady stream of crude that is priced well below oil imported to east coast refineries from overseas, Haas said.

"Bayway is going to have strong crude purchasing fundamentals because of this rail deal, in addition to the strong energy price fundamentals,” Haas said.

Haas said Bakken crude was trading Tuesday at around $87 a barrel, which compares to close to $112 for Brent crude, which is used as a benchmark for world oil prices.

If Bakken oil continues to sell at a discount to Brent, the price difference will result in a savings for Phillips 66, even with a shipping fee of as much as $15 a barrel, Haas said.

"This refinery has a pretty positive outlook in my opinion,” he said.

The contract will use Global Partners’ network of loading facilities and offloading terminals, according to a Phillips 66 announcement.

"Global has established a ‘virtual pipeline’ for the reliable transportation of Bakken crude,” said Tim Taylor, Phillips 66’s executive vice president of commercial, marketing, transportation and business development. "Our five-year agreement with Global assures us long-term access to advantaged crude for our Bayway refinery through what we believe is a cost competitive origin-to-destination supply system to the East Coast.”

return to top

Country of the Month: Australia

from BBC News and State Department

  • AustraliaFull name: Commonwealth of Australia
  • Population: 22.6 million (UN, 2011)
  • Capital: Canberra
  • Largest city: Sydney
  • Area: 7.7 million sq km (2.9 million sq miles)
  • Major language: English
  • Major religion: Christianity
  • Life expectancy: 80 years (men), 84 years (women) (UN)
  • Monetary unit: 1 Australian dollar = 100 cents
  • Main exports: Ores and metals; wool, food and live animals; fuels, transport machinery and equipment
  • GNI per capita: US $46,200 (World Bank, 2010)

U.S.-AUSTRALIA RELATIONS
The United States established diplomatic relations with Australia in 1940, following the United Kingdom's recognition of Australia's domestic and external autonomy within the British Empire and the Government of Australia's formal adoption of the codification. U.S. relations with Australia are strong and close. The two share a traditional friendship, similarities in culture and historical background, democratic values, common interests, and similar views on most major international questions. Ties range from commercial, cultural, and environmental contacts to political and defense cooperation. Australian forces have fought beside the United States and other Allies in every significant conflict since World War I.

The United States and Australia attach high priority to controlling and eventually eliminating chemical weapons, other weapons of mass destruction, and anti-personnel landmines; and they work closely on global environmental issues such as slowing climate change and preserving coral reefs. The ANZUS Treaty with the United States enjoys broad bipartisan support in Australia as its pre-eminent formal security treaty alliance. Australia participates in bilateral AUSMIN consultations with the United States and in a trilateral security dialogue with the United States and Japan.

A number of U.S. institutions conduct cooperative scientific activities in Australia because of its geographical position, large land mass, and advanced technology. The two countries have signed a tax treaty and agreements on science and technology, emergency management cooperation, and social security. They also have concluded a mutual legal assistance treaty, enhancing bilateral cooperation on legal and counternarcotics issues.

U.S. Assistance to Australia
The United States provides no development assistance to Australia.

Bilateral Economic Relations
U.S. exports to Australia include machinery, vehicles, optic and medical instruments, aircraft, and agricultural products. U.S. imports from Australia include precious stones/metals, agricultural products, and optic and medical instruments. The United States is one of the largest foreign investors in Australia.

The bilateral Australia-U.S. Free Trade Agreement (AUSFTA) liberalized an already vibrant trade and investment relationship. The AUSFTA created ongoing working groups and committees to explore further bilateral trade reform. The two countries share a commitment to liberalizing global trade. They work together closely in the World Trade Organization, and both are active members of the Asia-Pacific Economic Cooperation forum. They also participate in the Trans-Pacific Partnership negotiations that seek to develop a regional trade agreement.

Australia's Membership in International Organizations
Australia and the United States belong to a number of the same international organizations, including the United Nations, ASEAN Regional Forum, Asia-Pacific Economic Cooperation forum, G-20, International Monetary Fund, World Bank, Organization for Economic Cooperation and Development, and World Trade Organization. Australia also is a Partner for Cooperation with the Organization for Security and Cooperation in Europe.

return to top

Do you know an MGTA member who was recently promoted or hired to an import/export company? Know of a member who recently got married or had a new addition to the family? Share the good news with your industry colleagues by emailing JLloyd@scoular.com.

Who Said it?

"Most of the change we think we see in life is due to truths being in and out of favor.”
– Robert Frost

"Love is the only force capable of transforming an enemy into friend.”
– Martin Luther King

"The better part of one's life consists of his friendships."
– Abraham Lincoln

return to top


Thank you, Newsletter Sponsor:

Port of Seattle

2013 Annual Sponsors:

 

Gold

Bremer

Silver

CH RobinsonDrinkerKing Solution

HMMKing SolutionsNeville Peterson LLPZepol


Bronze

Williams Mullen

© 2013 Midwest Global Trade Association. All Rights Reserved.
World Trader is distributed bi-monthly to MGTA members.
Articles submitted by our membership do not express the views of MGTA or the Board of Directors. If you would like to submit an article for publication in the World Trader, please contact the MGTA office at office@mgta.org.

Midwest Global Trade Association
1000 Westgate Drive, Ste. 252 | St. Paul, MN 55114
p 651.290.7482 | f 651.290.2266 | office@mgta.org |
www.mgta.org