Executive Commentary |
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“ Policymakers are now looking to require importers to track the owners of inputs into manufacturing goods to satisfy importing trade remedies , preferences and controls . This change could have an enormous impact on how companies source , leverage free trade agreements and comply with US trade laws .”
Eugene Laney
“ We need a better solution than dynamic pricing .”
Lori Fellmer
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American Association of Exporters and Importers ( AAEI )
Eugene Laney
President and CEO www . aaei . org
For over 50 years , the practice of determining an item ’ s country of origin and utilizing the principal of “ substantial transformation ” to help make this determination has been standard practice for many US importers in the context of trade compliance . Currently , an item that was made or grown in one country then substantially transformed into a new product in a second country is considered as having originated from that second country . New trade policies being considered in Washington , DC , would add a layer on top of substantial transformation in determining the country of origin .
Policymakers are now looking to require importers to track the owners of inputs into manufacturing goods to satisfy importing trade remedies , preferences and controls . This change could have an enormous impact on how companies source , leverage free trade agreements and comply with US trade laws .
These changes could have the following impacts :
pre-pandemic levels , with issues around physical movement , data integrity and infrastructure responsiveness remaining obstacles to optimal operations .
For ACSA members , the top disruptors in the supply chain are centered on operational and visibility gaps . The ongoing fluctuation in cargo receiving windows ( CRW ), driven by vessel schedule instability , is a persistent challenge . These windows — including early return dates and cutoffs — are frequently shifted without sufficient notice , creating downstream impacts on rail , truck and terminal operations .
Additionally , gaining real-time visibility of changing conditions between
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Complex sourcing : Adding rules of ownership will make it more difficult for companies to make crucial sourcing decisions , essentially making it difficult in deciding whether friend-sourcing or near-sourcing completely inoculates companies from trade compliance risks .
Impotent free trade agreements : Rules of ownership could make current and future free trade agreements impotent , essentially making it impossible to determine whether a product qualifies for preferential treatment .
Increasing compliance costs : Companies will need to purchase new technology that provides supporting documents and data to prove that their products meet ownership requirements .
In the midst of these policy proposals , companies are looking to adopt three practices to remain compliant : leveraging technology , using artificial intelligence to stay informed and to know their supply chain ; taking a strategic approach to data for the management of physical things , leveraging the internet of things and other tools to learn more about where an input is sourced and by whom ; and nearshoring and re-shoring supply chains to meet customers where they are , avoiding compliance risks areas .
marine terminals , ocean carriers , truckers and shippers remains elusive . Without accurate , synchronized data across these touchpoints , operational efficiency suffers .
Intermodal operations present their own set of challenges . Meeting vessel cutoffs and avoiding missed bookings are ongoing concerns , as is the increasing number of containers arriving at ports such as Los Angeles and Long Beach without bolt seals intact . Ensuring secure cargo and maintaining control over these complex movements is critical to minimizing risk .
Looking forward , we must focus on improving collaboration between all
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parties — shippers , carriers , terminal operators and regulators . Successful partnerships will drive efficiencies and reduce delays across the cotton export supply chain .
Our expectations for improvement are pragmatic but firm . We must see enhancements in schedule reliability , reduced shipment splits and rolls , and better data alignment between key players . Timely issuance of clean ocean bills of lading and consistent CRW notifications will be essential to guarantee smoother operations across the supply chain , ensuring US containerized exports , such as cotton , remain competitive against foreign competitors .
BassTech International
Lori Fellmer
Vice President , Logistics and Carrier Management www . basstechintl . com
Historically , a shipper could request a quotation from an ocean carrier and , if accepted , the rate would be memorialized in a public tariff or filed in a confidential individual service contract .
Slowly but surely , ocean carriers have abandoned the publication of usable freight rates in a tariff . At the same time , they have also avoided service contracts with shippers who are only able to offer relatively small volume commitments .
Today , shippers are directed to ocean carriers ’ online ( registration and login required ) quotation tools . These inquiries typically yield rate offers that are dynamically derived , considering not only the usual parameters — origin , destination , commodity — but also timing and size of a shipment and , certainly , the identity of the inquirer . The rate offers are typically made on a take-it-or-leave-it basis and subject to immediate booking . If accepted , the rate is memorialized in a “ micro ” service contract , valid for that shipment only and subject to terms and conditions that are likely to include penalties for cancellations or changes .
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