Midwest Global Trade Association

World Trader

From the President: WHAT You Know or WHO You Know?

By John Wilson, MGTA President

John WilsonMGTAers,
As students everywhere are heading back to school, I’m reminded of the importance of lifelong learning to remain competitive and connected in a rapidly changing world. Most of us reading this are working adults who (unlike most students) have come to rely on what or who we know over the years.

MGTA offers solutions to the "what you know/who you know" dilemma for global trade professionals, but it takes a back-to-school mentality. Here are a few MGTA "courses” open for enrollment.

What you know…

  • Do you know the effects of GSP expiration on your supply chain? Register and come discuss it with others at MGTA’s September 10 networking lunch.
  • Are you familiar with the Toxic Substance Control Act and your responsibilities as an importer and exporter, and potential penalties and fines of non-compliance? Register and come hear about it from knowledgeable presenters at MGTA’s September 11 morning seminar.

Who you know…

  • Interested in meeting peers in MGTA’s young professionals, leaders, experts, and student ranks? Be on the lookout and register for continuing quarterly events aimed to meet the unique interests of these MGTA groups.
  • Curious about the talented global trade professionals are who develop MGTA’s monthly seminars, networking events, and communications? Attend a Professional Development Program, Membership, or Communications committee meeting this month (see calendar).
  • Is volunteerism to shape the future direction of the MGTA of interest to you? Look for an announcement to nominate/be nominated to MGTA’s 2014 Board of Directors.

Take advantage of MGTA’s learning and networking opportunities because the answer to the title question in my mind is…yes!

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"The difference between a successful person and others is not a lack of strength, not a lack of knowledge, but rather a lack of will.”
- Vince Lombardi

Upcoming Events

MGTA Seminar: Toxic Substance Control Act

Importers & Exporters: Toxic Substance Control Act (TSCA): Are you sure you are compliant?

September 11, 2013
8:30 a.m. – 11:45 a.m.
Medtronic – Rice Creek, Griffin Auditorium
Fridley, MN
Complete Details and Online Registration

The Toxic Substance Control Act can easily reach into the routine activities of international commerce, ranging from import and export of substances from raw materials, manufactured articles and yes, the miscellaneous articles include as parts kits for larger assemblies, even your field-services engineer’s kit. Non-compliance may result in costly fines! Are you compliant?

MGTA SEMINAR: Managing Your Exports

October 17, 2013
8:00 a.m. – 4:30 p.m.
MTS Systems Corporation
Eden Prairie, MN
Details and online registration

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Canadian Consulate Event

By Kylle Jordan, Consulate General of Canada in Minneapolis

On July 17, the Consulate General of Canada and MGTA hosted an event for senior-level trade representatives from MGTA member companies at the Canadian Consulate. The event was designed for these professionals to have direct access to the Consul General and his trade staff so that they might have their questions answered regarding trade with Canada.

The Consul General, Jamshed Merchant, began the evening by discussing recent trade initiatives such as progress on the Beyond the Border and Regulatory Cooperation Council (RCC) initiatives, Buy America legislation, and information on investing in Canada. The floor was then open for MGTA members to ask specific questions about their businesses. Popular questions included how to find partners and distributors in Canada, where to set up a distribution facility, and how to get service professionals across the border.

The attendees, as well as the hosts, found the event to be a great success with very useful information. Several meetings between MGTA members and Consulate staff have been scheduled to follow up on each company’s specific export situation. Moving forward, the MGTA hopes to host more events of this type – targeting different sectors of the membership, as was done earlier this year with the young professionals networking event.

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"Great minds discuss ideas; average minds discuss events; small minds discuss people.”
- Eleanor Roosevelt

Drewry: Cash-Strapped Carriers Returning to Core Services

By Bruce Barnard, Journal of Commerce

Cash-strapped container carriers are retreating to port-to-port operations from door-to-door services, allowing freight forwarders to increase their ocean market share, according to industry consultant Drewry.

Maersk’s sale of its U.S. trucking unit Bridge Terminal Transport is the latest evidence that "a mixture of financial necessity and commercial reality is further forcing ocean carriers to return to providing core services only,” the London-based consultancy said.

The move by carriers to focus on their port-to-port business has gained momentum in recent months, according to Drewry. Maersk announced the sale of its European rail business, ERS Railways, to U.K.-based Freightliner in June, and Israeli carrier Zim Integrated Shipping Services sold its holdings in two companies that own container manufacturing plants in China in May.

A month earlier, Mediterranean Shipping Co. announced the sale of 35 percent of its Terminal Investments port unit to Global Infrastructure Partners. In addition, CMA CGM in January sold 49 percent of its container terminal subsidiary Terminal Link to China Merchants.

"The implication is that the provision of home-grown logistics services by ocean carriers is becoming a distant dream that is unlikely to be resurrected in the near future,” Drewry said.

The one exception where ocean carriers can successfully extend their range of services beyond the port is the provision of rail- and barge-based intermodal services by leveraging their volumes and buying power in markets where they are competitive with trucking.

The more than doubling in carrier debt in the past five years to $100 billion from $47 billion, extremely weak profitability during the period and surplus of capacity "have further pushed ocean carriers into a port-to-port mentality suitable to commodity pricing,” Drewry said.

This has made it easier for independent forwarding agents to provide more customer-focused supply chain management solutions.

"Whereas ocean carriers have been encouraged to automate many customer-facing functions to cut costs (such as cargo bookings), forwarders’ greater profitability has enabled them to move up the value chain,” Drewry said.

Drewry estimates that forwarders’ share of the ocean freight market has risen to 51 percent from 35 percent in 2009 and from just 15 percent 20 years ago when ocean carriers were still contesting the less-than-containerload market.

Forwarders’ market share varies between trades, remaining fairly static at around 38 percent on the eastbound trans-Pacific route in recent years, while growing to 66 percent on the westbound leg of the Asia-Europe trade from just over 50 percent in 2009.

Ocean carriers will continue to be increasingly restricted to the provision of port-to-port services, but more involvement in door-to-door services is possible wherever more competitive intermodal services are offered, Drerwy concludes. "The issue of who should offer them is a completely different ball game.”

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"If you don’t design your own life plan, chances are you’ll fall into someone else’s plan. And guess what they have planned for you? Not much.”
- Jim Rohn

Quest for Quality Awards Announced

By Hillary Drake, Sr. Transportation Analyst, Andersen Windows

This month Logistics Management published their 30th Annual Quest for Quality Awards. While the winners were mostly the large providers you’d expect to see on national awards, the weighting respondents used for different performance attributes was particularly interesting to me.

Quest for Quality Awards

On-time performance is far and away the most important category, with around 95% of respondents rating it very important. The lowest category, IT, was rated very important by 40% of respondents for LTL, ranging to 65% for ocean carriers.

When I filled out the survey as a shipper, it was hard to distinguish which categories were most important. Management measures us on on-time performance, but ultimately every factor on the list contributes. Value? If my contract is too low, a driver may get put on a higher revenue load when push comes to shove. IT? If they can’t send me accurate information and receive my data, it makes more work for Operations. Same story for Customer Service and Equipment & Operations. Problems with either one ultimately delivers poor on time performance.

Of course, as a shipper I want 100% on time delivery at a low cost, and possibly a pony to go with it. I doubt I’ll get any of those things, but we’ll keep trying to find the right balance of cost and quality. All the award winners are on the right track.

Country of the Month: Sri Lanka

Sri Lanka

Lying off the southern tip of India, the tropical island of Sri Lanka has attracted visitors for centuries with its natural beauty.

But it has been scarred by a long and bitter civil war arising out of ethnic tensions between the majority Sinhalese and the Tamil minority in the northeast.

After more than 25 years of violence the conflict ended in May 2009, when government forces seized the last area controlled by Tamil Tiger rebels. But recriminations over abuses by both sides continue.

The island fell under Portuguese and Dutch influence after the 16th century, and Britain began its conquest in the 1790s.

Historic Kandy is home to the Temple of the Tooth Relic, one of Sri Lankan Buddhism's most revered sites.

There was a long-established Tamil minority in the north and east, and Britain also brought in Tamil laborers to work the coffee and tea plantations in the central highlands. This made the island, then called Ceylon, a major tea producer.

The majority Buddhist Sinhalese resented what they saw as British favoritism towards the mainly-Hindu Tamils.

The growth of assertive Sinhala nationalism after independence fanned the flames of ethnic division, and civil war erupted in the 1980s against Tamils pressing for self-rule.

Most of the fighting took place in the north. But the conflict also penetrated the heart of Sri Lankan society, with Tamil Tiger rebels carrying out devastating suicide bombings in the capital Colombo in the 1990s.

The violence killed more than 70,000 people, damaged the economy and harmed tourism in one of South Asia's potentially most prosperous societies.

International concern was raised about the fate of civilians caught up in the conflict zone during the final stages of the war, the confinement of some 250,000 Tamil refugees to camps for months afterward, and allegations that the government had ordered the execution of captured or surrendering rebels.

A UN report published in 2011 said both sides in the conflict committed war crimes against civilians. The Sri Lankan government rejected this and later reports as biased.

There have been talks between the Sri Lankan government and the biggest Tamil party which may lead to constitutional reforms including substantial regional devolution, which the Tamil party wants given that the north and east are largely Tamil-inhabited.

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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.

September 2013
Volume 10, Issue 4

From the President: WHAT You Know or WHO You Know?

Upcoming Events

Canadian Consulate Event
By Kylle Jordan, Consulate General of Canada in Minneapolis

Drewry: Cash-Strapped Carriers Returning to Core Services
By Bruce Barnard, Journal of Commerce

Quest for Quality Awards Announced
By Hillary Drake, Andersen Windows

Country of the Month: Sri Lanka
from BBC News and State Department

Annual Sponsors

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Bennett Jones

 


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