An update from MGTA

Midwest Global Trade Association

World Trader

From the President

By Jason Lloyd, MGTA President

Jason LloydThank you for the opportunity to serve as your 2014 MGTA President. It has been an honor to be a part of a legacy that has been around for nearly a century. As I look back on the past year, the MGTA had many highlights: membership grew, we partnered with organizations such as AAEI for their annual conference, and our education seminars continued to shape professionals. The annual dinner is February 5; this is a great time to meet your board and committee volunteers, as well as network with those who make the MGTA what it is today. We hope you will join us for this annual event.

As we enter 2015, we see greatness ahead in the coming year, and look forward to achieving something extraordinary. I challenge you to push yourself; take on a new role in your life that will put you out of your comfort zone. Make the coming year the best year of your life!

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Upcoming Events

MGTA Annual Meeting & Networking Event

February 5, 2015
Pinstripes
Edina, MN
View details and register online

The MGTA Special Events committee is excited to announce the new location of the 2015 MGTA Annual Meeting and Dinner! Join us at Pinstripes in Edina for good food, great networking, and a chance to win a number of fabulous door prizes.

Pinstripes

Don’t delay – register TODAY!


MGTA SEMINAR: An Export Transaction: From the Order to Out the Door

February 12, 2015
8:00 a.m. to 4:30 p.m.
Ewald Conference Center
Saint Paul, MN
View Details and Register Online


WEBINAR: The Ins and Outs of Direct Filing with U.S. Customs & Border Protection

February 19, 2015
Noon to 1:00 p.m.
View Details and Register Online

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Canada Signs Free Trade Agreement with the EU

By Kylle Jordan, Consulate General of Canada

Prime Minister Stephen Harper recently hosted his European counterparts to celebrate the dawning of a new era in the Canada-EU partnership. After the launch of negotiations on 6 May 2009, Canada and the EU agreed to the terms of the Comprehensive Economic and Trade Agreement (CETA) in September 2014. The agreement will begin to come into effect in 2016, at which time about 98% of the tarriffs between the two parties will be eliminated. CETA is expected to surpass the North American Free Trade Agreement between Canada, the United States, and Mexico as Canada's largest cross-border agreement.

The EU-Canada Trade Sustainability Impact Assessment (SIA), a three-part study commissioned by the European Commission to independent experts and completed in September 2011, provides a comprehensive prediction on the impacts of CETA. It predicts a number of macro-economic and sector-specific impacts, suggesting the EU may see increases in real GDP of 0.02-0.03% in the long-term from CETA, whereas Canada may see increases of 0.18-0.36%; the Investment section of the report suggests these numbers could be higher when factoring in investment increases. At the sectoral level, the study predicts the greatest gains in output and trade to be stimulated by services liberalization and by the removal of tariffs applied on sensitive agricultural products; it also suggests CETA could have a positive social impact if it includes provisions on the ILO's Core Labour Standards and Decent Work Agenda. The study details a variety of impacts in various “cross-cutting” components of CETA: it advocates against controversial NAFTA-style ISDS provisions; predicts potentially imbalanced benefits from a government procurement (GP) chapter; assumes CETA will lead to an upward harmonization in IPR regulations, particularly changing Canadian IPR laws; and predicts impacts in terms of competition policy and several other areas.

For more information about CETA, please visit www.international.gc.ca/ceta.

Key Transportation Themes Over the Past 30 Days

By Jim Braun, Cleveland Research Company

U.S. Trucking Trends

  • The American Trucking Association’s seasonally adjusted Truck Tonnage Index was 3.7% higher Y/Y in September, compared to a 4.5% Y/Y gain in August. 2014TD tonnage is up 3.2% Y/Y, while 2013 tonnage was up 6.3% Y/Y. The tonnage index was flat M/M in September following a 1.6% increase M/M in August.
  • Dry-Van rates in the spot market through early November were $2.02 per mile, as tight capacity has continued to cause higher pricing Y/Y. On a 4 week rolling average, spot rates are 8.0% higher Y/Y. Our work indicates higher spot market rates have supported contract pricing discussions, with average contract rates up 3-4% Y/Y versus 0-1% Y/Y in 2013. Early forecasts indicate pricing could be up 4-6% in 2015.
  • Through early November, flatbed rates in the spot market were $2.24 per mile on a trailing 4 week basis, up 8.5% Y/Y. Most flatbed carriers are focused on contract rate increases in the mid to high single digits for 2014, after low single digit rate increases in 2013. 2015 pricing discussions indicate a repeat year of mid to high single digit rate increases is likely.

Global Containerized Ocean Traffic

  • During September, inbound containerized ocean volumes at all U.S. ports increased 8.9% year over year, ahead of lower Y/Y growth during August. 2014 YTD volumes are up 5.7%. The 2014 outlook through September was stable with volume growth expectations in mid-single digits Y/Y, with near-term deceleration due to concerns of a possible ILWU work stoppage.
  • Eastbound trans-Pacific ocean container spot rates between Hong Kong and the U.S. West Coast rose in October before falling in early November, with rates now 8% higher than at this time in 2013. This is below the ~14% higher Y/Y rates that we saw in October. YTD rates have averaged 7.0% lower than the same period last year. Carriers continue to implement monthly General Rate Increases to support rates, but overcapacity has prevented sustainable increases in rates until recently.
  • As of October 1, shipyards around the world held orders for 488 new container ships with an aggregate capacity of 3.572 million TEUs which represents approximately 19.7% of the existing world fleet. Despite the fact that capacity growth has outpaced demand, container capacity is projected to rise 5.8% in 2014, and 8.0% in 2015, and 4.6% in 2016.

Rail Trends

  • Through the end of October, CSX reported 4Q14 overall volumes up 5.7% Y/Y, while NSC reported overall carloads up 2.5% Y/Y, due to strong stone and intermodal volumes. Interestingly, CSX coal volumes have been up Y/Y due to replenishment of utility stockpiles.
  • Through the end of October, UNP reported 4Q14TD volumes up 9.5% Y/Y, while BNSF reported 4Q14TD volumes up 3.0% Y/Y. BNSF has seen service issues and limited capacity limit volume growth for them in 4Q, while UNP has benefitted from BNSF overflow freight.

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Country of the Month: Republic of Liberia

Liberia Map

Capital: Monrovia
Population: 4,092,310

Settlement of freed slaves from the United States in what is today Liberia began in 1822; by 1847, the Americo-Liberians were able to establish a republic. William Tubman, president from 1944-71, did much to promote foreign investment and to bridge the economic, social, and political gaps between the descendants of the original settlers and the inhabitants of the interior. In 1980, a military coup led by Samuel Doe ushered in a decade of authoritarian rule. In December 1989, Charles Taylor launched a rebellion against Doe's regime that led to a prolonged civil war in which Doe was killed. A period of relative peace in 1997 allowed for elections that brought Taylor to power, but major fighting resumed in 2000. An August 2003 peace agreement ended the war and prompted the resignation of former president Taylor, who faces war crimes charges in The Hague related to his involvement in Sierra Leone's civil war. After two years of rule by a transitional government, democratic elections in late 2005 brought President Ellen Johnson Sirleaf to power. She subsequently won reelection in 2011 in a second-round vote that was boycotted by the opposition and remains challenged to build Liberia's economy and reconcile a nation still recovering from 14 years of fighting.

Liberia is a low income country that relies heavily on foreign assistance. Civil war and government mismanagement destroyed much of Liberia's economy, especially the infrastructure in and around the capital, Monrovia. Many businesses fled the country, taking capital and expertise with them, but with the conclusion of fighting and the installation of a democratically elected government in 2006, several have returned. Liberia is richly endowed with water, mineral resources (diamonds), forests, and a climate favorable to agriculture, and iron ore and rubber have driven growth in recent years. Liberia is also reviving its raw timber sector and is encouraging oil exploration. President Johnson Sirleaf, a Harvard-educated banker and administrator, has taken steps to reduce corruption, build support from international donors, and encourage private investment. Rebuilding infrastructure and raising incomes will depend on financial and technical assistance from donor countries and foreign investment in key sectors, such as infrastructure and power generation. The country achieved high growth during 2010-13 due to favorable world prices for its commodities. In the future, growth will depend on global commodity prices, on sustained foreign aid, trade, investment, and remittances, on the development of infrastructure and institutions, but mostly on maintaining political stability and security.

Exports: rubber, timber, iron, diamonds, cocoa, coffee
Export partners: China 24%, US 15.3%, Spain 11%, Algeria 6.5%, Thailand 4.5%, Malaysia 4.1%, France 4% (2012)
Imports: fuels, chemicals, machinery, transportation equipment, manufactured goods; foodstuffs
Import partners: South Korea 26.7%, China 24.4%, Singapore 23.2%, Japan 16.1% (2012)

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Members' Corner

By Thierry Ajas, Randstad Professionals

The Communications Committee Needs You!

The Communications Committee of the MGTA is looking for one or two more members to produce original content for our newsletters. If you would like to know what being a member of the Communications Committee entails, please feel free to contact our Communications Committee Chair, Thierry Ajas, directly. Thierry’s email address is: thierry.ajas@randstadusa.com.

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 thierry.ajas@randstadusa.com

January–
February 2015

From the President

Upcoming Events

Canada Signs Free Trade Agreement with the EU
By Kylle Jordan, Consulate General of Canada

Key Transportation Themes Over the Past 30 Days
By Jim Braun, Cleveland Research Company

Country of the Month: Republic of Liberia

Members' Corner
By Thierry Ajas, Randstad Professionals

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