Global Logistics: TIA and CIFA enter into a Cooperation Agreement
March 06, 2012
Earlier this month, the Transportation Intermediaries Association (TIA), an organization representing the third-party logistics industry (3PL), and the China International Freight Forwarders Association (CIFA) entered into a Cooperation Agreement.
TIA and CIFA officials said that promoting communication and cooperation between the largest transport intermediary associations of China and the United States which are also the world’s top two largest trading powers is very necessary and important. They added that it can not only improve regional development of freight forwarding, but also help stabilize and prosper world trade and transportation.
The major components of the agreement include:
-both TIA and CIFA exchanging information and visits to share the “fruits of development” and successful experiences in the industry;
-exchanging general information about market conditions in their respective countries; and
-both associations protecting the “the legitimate rights and interests of the other party’s members in its country.”
In an interview with LM, TIA President and CEO Bob Voltmann said that with TIA as a member of the International Federation of Freight Forwarder Associations (FIATA), an international organization of associations representing 3PLs, TIA had conversations with CIFA at the 2011 FIATA World Congress in China.
“We met with CIFA and had a little summit, talking about issues that China is facing and issues we are facing and issues of commonality,” said Voltmann. “We then signed this letter of understanding to promote better coordination between our members. What everyone wants in business is to get a problem solved and to get paid. So what were talking about was building that trusted trade relation.”
This was a culmination of building on the fact that CIFA is the largest organization representing 3PLs in the second largest economy in the world, and TIA, the largest organization representing 3PLs in the largest economy in the world, said Voltmann.
And he added that with the integrated logistics companies in the U.S. and China working with their manufacturing customers to control shipments from door-to-door wherever those doors are is a major driver of this agreement.
“That is what we saw as an opportunity here to promote better coordination and relations between TIA and CIFA,” said Voltmann. “As a side note, a number of our members’ business is domestic transport, which represents 80 percent of our logistics spend. When we talked about this with CIFA, they said they are kind of where we were in the 1970s. Their domestic logistics system is terrible. Logistics as a percentage of GDP is approaching 20 percent, which is what ours used to be. China has very cumbersome provincial regulations as we used to with very cumbersome state regulations. And even though they have modernized it, they were very intrigued with how we go to where we are now, as logistics costs in the U.S. now represent less than ten percent of GDP.”
This sets the table for lots of future discussions, explained Voltmann.
And during the 2011 FIATA World Congress Voltmann said that TIA met with the U.S. Embassy staff in Beijing and the U.S. Consulate staff in Shanghai and the Shanghai Forwarders Association, the latter of which is part of CIFA although it has a different focus and TIA will work with in the future.
TIA and CIFA will work together at the 2012 FIATA World Congress in October in Los Angeles to encourage active participation of member companies as part of the Cooperation Agreement.
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