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Archives for March 2018

It’s great when the federal government nails it.

By Steve Geary | 03/25/2018 | 4:28 PM

Since it was established 25 years ago, the U.S. Trade and Development Agency (USTDA) has generated a total of $61 billion in U.S. exports and supported over 500,000 American jobs.

The USTDA is a small independent federal agency whose mission is to help American “companies create U.S. jobs through the export of U.S. goods and services in emerging economies.”

If you are reading this blog, you know that transportation and transportation infrastructure – a focus area for the USTDA – is a catalyst for business.  The USTDA’s published statistics cite $95 in trade generated for every dollar spent by the agency.

According to the USTDA website, “Transportation is a critical sector, as it links people and, even more importantly, drives trade, investment and economic growth.  USTDA activities in the transportation sector support the development of higher capacity aviation, rail, port and highway systems, improved safety management, and the adoption of international safety and security standards.”

Describing what they do, the USTDA says, “From providing technical assistance that supports trade facilitation, to piloting U.S. technologies for customs systems at borders, to modernizing ‘hard’ infrastructure at ports, railways and airports, the Agency introduces high-performing U.S. solutions that can increase capacity, enhance efficiency and improve safety.”

In 2016, USTDA launched the Global Procurement Initiative, to provide partner nations with the knowledge needed to make “best value” decisions and understand life cycle cost analysis to level the playing field for US companies seeking international opportunities. 

The natural follow-on to any infrastructure development funded by the United States is trade with the United States.  Businessmen understand taxes when they yield an asset.  Logisticians understand taxes when that asset is transportation infrastructure.

That’s what USTDA does:  build transportation capability to drive business for the United States.  Notably, transportation is just one of their sectors.  They also focus on energy and telecommunications.  The Agency has actually gotten ink from Forbes, so they must be doing something right.

Now, if Congress would only apply the same logic to transportation within the United States that USTDA uses to drive international trade . . . for more, please see my February blog, “Memo to Washington:  Do the math, then do your job.”

There is a storm rolling in

By Steve Geary | 03/14/2018 | 3:44 PM

If you work in logistics, you understand compliance.  The government sets the rules, and we figure out how to follow them.  OSHA rules.  Labor standards.  Tariffs.  Gas taxes.  The list goes on.

We know how to project these costs, know how to plan for these costs, and know how to run a business incorporating these costs.

President Trump has now introduced uncertainty, announcing tariffs on aluminum and steel.  And while he began with steel and aluminum, he quickly escalated the rhetoric to include a threat of tariffs on European autos.  Our trading partners have not been silent.  Europe is talking about Tennessee whiskey and Harley Davidson.

To make it messier, the President has added unpredictability to the uncertainty.  Canada and Mexico are exempted, but what about Australia.  There is confusion over Australia.  Who knows who else is knocking on the door of the White House.

These ten countries account for about two-thirds of our steel imports:

  1. Canada 16.7%
  2. Brazil 13.2%
  3. South Korea  9.7%
  4. Mexico 9.4%
  5. Russia 8.1%
  6. Turkey 5.6%
  7. Japan 4.9%
  8. Germany 3.7%
  9. Taiwan 3.2%
  10. China 2.9%

Source:  Reuters

What is the President up to?  Why steel?  Why aluminum?  What next?  Just about a year ago I wrote, “Uncertainty Stinks.”  Then last fall, I followed up with “Interesting times.”  The time for conjecture is over; there is a storm rolling in.

Tariffs and retaliatory tariffs are in play, and they will ripple across the supply chain.  Depending on your exposure, you may have a blip to deal with, or you may have to do a complete logistics and sourcing reset. 

Even worse, any hope for precision is out the window because we do not know broad the impact will be.  Is it just steel and aluminum, or did we just see the start of a global trade war?  Are we reacting to a ripple, or will it be a tsunami? 

My advice for logisticians: plan for the worst, hope for the best, and start running for the high ground.

The opinions expressed herein are those solely of the participants, and do not necessarily represent the views of Agile Business Media, LLC., its properties or its employees.

About Steve Geary

Steve Geary

Steve Geary is an adjunct faculty member at the University of Tennessee's College of Business Administration, and is on the faculty at The Gordon Institute at Tufts University, where he teaches supply chain management. He is the President of the Supply Chain Visions family of companies, and Chief Operating Officer at ROSE Solutions, consultancies that work across the government sector. Steve is a contributing editor at DC Velocity, and editor-at-large for CSCMP's Supply Chain Quarterly. He is listed in Who's Who in America, Who's Who in the World, Who's Who in Science and Engineering, and Who's Who in Executives and Professionals. In November of 2007, Steve was recognized for "Selfless Service to Our Nation and the People of Iraq" by the Deputy Secretary of Defense.



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