U.S. Logistics Providers Said "Ready and Willing" to Compete on World Stage

Removing barriers to worldwide competition in logistics industry will improve supply chain efficiency, IWLA tells ITC

Removing barriers to worldwide competition in logistics industry will improve supply chain efficiency, IWLA tells ITC

Chicago  November 29, 2004  U.S. logistics providers are ready and willing to compete on the world stage, and removing barriers to worldwide competition in the logistics industry will improve supply chain efficiency around the globe, benefiting consumers and companies alike, the International Warehouse Logistics Association (IWLA) told a recent hearing of the U.S. International Trade Commission.

"U.S. logistics companies are among the most efficient in the world, and allowing them to compete freely in the global marketplace will bring this efficiency to the world stage," the IWLA said in a statement entered during testimony last week before a hearing of the ITC in Washington, D.C. IWLA President Joel Hoiland was scheduled to deliver the association's remarks to the November 19 hearing.

The U.S. International Trade Commission is an independent, quasi-judicial federal agency that provides trade expertise to both the legislative and executive branches of government, determines the impact of imports on U.S. industries and directs actions against unfair trade practices, such as patent, trademark, and copyright infringement.

The hearing, titled "Logistic Services: An Overview of the Global Market and Potential Effects of Removing Trade Impediments," was called as part of an investigation into the global logistics industry requested by the U.S. Trade Representative's office. Information derived from the hearing will be used to shape the U.S.'s bargaining position at upcoming World Trade Organization (WTO) negotiations aimed at liberalizing trade.

As an example of a barrier that hindered growth of international logistics, IWLA cited a Chinese law that limits foreign ownership of a warehouse facility in China to a maximum of 49 percent. "Various IWLA members have made investments in building warehousing facilities in China; however, this ownership rule has limited their ability to grow as rapidly as they would like," IWLA's statement said.

"By removing barriers such as this, logistics efficiency is improved around the world and products are brought to market in a more timely and reliable manner, driving down costs," the statement continued. "This benefits consumers in the [United States], as well as U.S. and global companies involved in processing raw materials, manufacturing, wholesaling and retailing. For U.S. companies, efficiency and cost-reduction are key to remaining competitive in the global marketplace."

IWLA noted that the WTO has been integral in opening trade with other countries and voiced its strong support of the organization's negotiations for liberalization of rules, regulations and tariffs in the logistics and related services industry.

Also scheduled to speak before the hearing were Matthew A. Vega, senior attorney with FedEx; Brad Fitzgerald, global strategy manager for United Parcel Service; and John Goyer, vice president for international trade negotiations and investment with the Coalition of Service Industries (CSI).

In its statement to the hearing, CSI noted: "Although U.S. companies are strongly competitive in global logistics markets, foreign regulatory regimes often do not secure acceptable market access and national treatment for U.S. providers. This inevitably leads to increased costs and lower quality of service, especially if providers are obliged to partner with domestic suppliers."

CSI also pointed out that U.S. international trade currently accounts for 25 percent of the country's gross domestic product (versus 40 percent for France, 65 percent for Germany and 85 percent for Singapore). "In 2003, U.S. cross-border services exports were $307 billion," CSI said, adding, "An increase in cross-border trade of freight, port and other private transportation services contributed to the $51 billion surplus in services trade that the United States enjoyed last year."

For a look at how Tyco Fire & Security is tackling trade compliance issues in its global supply chain, see "Turning Global Trade Compliance Into a Competitive Advantage," in the August/September 2004 issue of Supply & Demand Chain Executive.

For more information on the challenges and opportunities presented by increasingly global supply chains, see the special in-depth report in the August/September 2004 issue of Supply & Demand Chain Executive, which includes the following articles:

For more information on the global supply chain, with a focus on security issues, see "Building the Secure Supply Chain," the Net Best Thing article in the June/July 2003 issue of iSource Business (now Supply & Demand Chain Executive) magazine.