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Global Logistics: Freight forwarders maintaining their speed

By Patrick Burnson, Executive Editor
October 01, 2012

Forwarders and food
Shippers of manufactured, high-tech goods are not the only ones looking for forwarders to help better penetrate foreign markets. Walter Kemmsies, chief economist at Moffatt & Nichol, says there will be added demand placed on intermediaries as U.S. agricultural shippers ramp up their production in the coming years.

“The United States is the world’s largest producer of agricultural products,” says Kemmsies. “Corn, wheat, soybeans, and grains grown largely in the Midwest and Great Plains states are exported worldwide.”

Agricultural shippers currently work with a variety of the global forwarding leaders to meet the surging demand for food in India, China, and Indonesia. According to Peter Friedmann, executive director of the Agriculture Transportation Coalition, his constituents are looking for forwarders who know and understand recent new trade agreements and federal policies to increase U.S. exports.

“The Korea-U.S. trade agreement that has the greatest potential for increasing cargo volumes for us in the short-term,” says Friedmann. “American meat exports, particularly pork and beef, have increased dramatically. Prior to the agreement, the average Korean tariff was approximately 18 percent, and removal of that tariff opens a huge market for U.S. agriculture exports.”

At the same time, shippers and forwarders should not overlook the trade expansion that the U.S.-Colombia Free Trade Agreement is generating, says Friedmann.
“The Trans-Pacific Partnership is a current trade negotiation involving the U.S., Canada, Mexico, Vietnam, Malaysia, Australia, and New Zealand. It has the potential to significantly increase transpacific trade volumes, but is still a year or so away from reaching any conclusion. But the promise is extremely interesting to U.S. exporters and freight forwarders,” Friedmann says.

Risk mitigation
Shippers seeking export guidance are increasingly mindful of the downside, as well. Protecting shippers from fraud and misinformation is one of the guiding principles of organizations like the American Association of Exporters and Importers, which concentrates on cross-border trade.

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The National Customs Brokers & Forwarders Association of America, Inc. (NCBFAA) also routinely conducts meetings, roundtables, and seminars coordinated through various affiliated associations to keep shippers informed about risk mitigation. “It’s all part of our outreach and educational initiatives that goes beyond our charter,” says association NCBFAA Board Chairman, Jeffrey Coppersmith.
“But it’s necessary for freight forwarders to help shippers avoid the pitfalls.”

According to Linda Conrad, director of strategic business risk management for Zurich Services, shippers can learn a great deal by working with trade associations, but they should be demanding that forwarders provide them with enough protection to advance their agendas.

“Many shippers believe that having a ‘marine policy’ is enough to cover them on the waterborne move,” she says. “But the chain of custody has many more complications. The best forwarders know and understand these details, and should be certain all of the bases are covered.”

Conrad adds that most leading global freight forwarders demonstrate a significant contribution to U.S. export expansion that is “measurable, innovative, sustainable, and has a broad impact.”
“With the right forwarding partner, U.S. shippers are in a sweet spot,” she says.

 

About the Author

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Patrick Burnson
Executive Editor

Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).


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