A Look at Global Trade During 2020 and Moving Forward

Cargo ships entering one of the busiest ports in the world, Singapore.The year 2020 has been a bit of a wild ride. Well, that’s certainly an understatement. For many people in this country, the year has been filled with nightmarish rollercoaster-like ups and downs, twists and turns, and probably some machine malfunctions, ungreased gears, and loose screws. And yet, America—being the resilient and robust economy that it is— continues forward and marches on. So while every industry, every person, every sports team, business, and school is being, in some way, affected by changing regulations and people’s sudden hypersensitivity to personal space and hygiene, the global market is also seeing its effects. According to some reports, the global economy is seeing the sharpest reversal since the Great Depression. The drop was quite dramatic in the early months of the shutdown and has seen some steady recovery since. 

The Ever-Changing Markets 

If you are in the business of exporting or importing goods, you know that the market, regulations, and tides of trade are always shifting and ebbing and flowing. This year was specifically turbulent because of unprecedented circumstances. As of April 2020, 6.6 million Americans were seeking unemployment benefits. This has, of course, great implications for the domestic economy and will see the ripple effects moving through the whole of society pretty soon. The pandemic has certainly upended many international trade flows, though the U.S import and export movement must continue. It has certainly made countries think much more carefully about who they are trading with and how they conduct business abroad. 

China is, of course, coming under fire from many countries including the U.S and India. As of June of 2020, many Indian businesses were all boycotting Chinese products. India has already banned certain products, apps, and other items from China. In April, Japanese officials injected $2 billion to boost domestic manufacturing. Other countries, as reported by US News, like France have expressed their need to refocus their trading partners and reassess their relationship with people from China. White House economic advisor Peter Navarro told reporters that he thought, “We are dangerously over-dependent on a global supply chain.” 

These movements have led many to report that nationalism and more nationalistic trade policies will emerge the victors after the smoke clears. As Forbes reports, there have already been several reports to block exports of certain items. And this, according to them, might lead governments to be a lot more selective about what they deem essential exports and imports. 

Impact on Imports and Exports 

The pandemic has also had significant effects on imports and exports; it has disrupted supply chains, reduced trade volumes, and limited product availability. While this causes concern for traders, it doesn’t mean all of it is dismal news. Because all markets are interconnected — from Europe to India to the U.S — a disruption to one part of the chain will often have some effects on the other. 

Some analysts are predicting that returning to normal will be a difficult fight. Many believe that the outbreak has permanently altered the global flow of goods and services. The pre-coronavirus norms seemed to have open free-flowing trade across global markets, as globalization seemed to be the 21st century way of trading. The political popularity of globalization has suffered quite a bit and many countries are looking for ways to remain a little more conservative on their trade, or, at the very least, have much more discretion on who they trade with. 

And so while pre-corona trade patterns may not return, international trade, imports, and exports will continue to be a large part of the U.S economy as we continue trading with our allies and close trading partners. There is no question that the pandemic has brought about a change in the international markets, but exactly what kind of change is yet to be seen. Other industries like pharmaceuticals might see their changes as well, as countries begin to kickstart the production of some of these goods in their own borders. In the U.S, according to Market Watch, imports fell 6.2% but U.S exports fell even deeper with 9.6%. 

The U.S trade deficit also widened by almost 12% in March as international flights were not allowed to fly, which froze the global tourism. At the same time, the exchange of goods was also affected. The U.S exported fewer cars, aircraft parts, and barrels of petroleum. 

As far as the big picture is visible right now, some segments of international commerce are faring better than others. For example, trade in medical supplies and food, but the global petroleum market has been hard hit. The movement of electronic goods like iPhones has also decreased dramatically. And while the recovery of the global economy might take some time, there will not be a shortage of need for international trade, especially in certain industries. There has been some decline in freight and cargo shipments for a variety of reasons including the fact that many companies have had to shut their doors and many ports and transportation workers were either sick or unable to return to work. 

In these uncertain times, you need to have a brokerage you can trust. Here at Cordova Brokerage, we are entrenched in the movements of the markets and global trade in order to provide our clients with the latest information and pertinent changes. If you are importing or exporting goods, things might seem a little chaotic. Find a brokerage you can trust to walk you through the ever-changing markets, regulations, and compliance restrictions. 

 

An Overview of America’s Imports and Exports

two businessmen shaking hands with a shipping yard in the backgroundSince the beginning of the country, the trajectory and nature of imports and exports have changed dramatically in the United States. The U.S went from being quite protective and isolationist in its approach to favoring a more open and free-flowing market that led the way to modern foreign relations many today would term globalization. Each has accompanied the very different cultures and customs of the time. The change was, in large part, brought about by global conflicts that changed the way nations exchanged goods with one another. Post-war America began to see open trade as a way to open up countless possibilities to advance the country’s economic interests, as well as establishing strong ties with foreign nations. 

Some of the country’s founders had differing ideas about the ideal trade policy. Alexander Hamilton, for example, was far less of a protectionist that he is often made out to be. He knew the importance of the import market and how that could help fund the public debt. He had much milder tariff policies that found the support of traders and merchants of the time. Others, like Thomas Jefferson and James Madison,  considered much more draconian trade policies and seemed to purport a more domestically focused economy. Interestingly enough, when he became president, Jefferson imposed an unusual trade policy, which had a nearly complete embargo on international commerce from December 1807 to March 1809. This was a short-lived experiment that showed what it would look like to have an almost complete stop to international trade. This embargo, along with effects on trade from the War of 1812, is often said to have further sparked the rapid industrialization of the country and encouraged domestic manufacturing. 

The Early American Isolationism 

In the early days of American history, Americans seemed to have a ‘leave me alone,’ attitude. In large part, Americans still hold this attitude, as it is greatly inculcated in our nature and our country’s culture. Even after World War I, America slowly returned to a more isolationist foreign policy. The war, after all, had brought with it a very large unpaid debt, as well as a generation of men scarred by the war. And by the mid to late 20s, foreign policy was not something on most people’s minds.   The Hoover Administration set forth the Hawley-Smoot Tariff. Because trade was a large arbiter of foreign relations, the tariff was a way to cut off the discussion altogether. This caused a lot of foreign retaliation that contributed, at least in some part, to the economic downturn that gripped the U.S and the world in the late 1920s. 

At the London conference of 1933, Rosevelt refused to tie the American dollar to a gold standard. This upset many European leaders. At the same time, Roosevelt realized that the Hawley Smoot Tariff was crippling American economic growth and the U.S made the policy more flexible. 

Trade Policy After World War II

The breakout of World War II was of course another cataclysmic change to the world and the global markets. The United States, unlike Britain and other Ally countries, did not have their industrial centers and cities bombed and therefore did not suffer the kinds of losses to their manufacturing that other nations did. This opened the way for the United States to manufacture a lot of necessary parts and materials for the war effort and otherwise. The U.S dominated many export markets after the war because the manufacturing centers were intact, this allowed for innovation and technological advancements, and due to inherent strengths in numbers of workers and the growth of several industries. All of this set the United States up for success in a global market by the time the war was over and countries were trying to rebuild their cities and lives. U.S aid was important to this recovery and these nations also needed export markets in order to return to economic independence. The U.S helped create the General Agreement on Tariffs and Trade, which consisted of an international code of tariff and trade rules that was signed by 23 countries in 1947. 

In the 70s, the U.S trade balance was hurt due to some externalities like the oil price shocks, global recession, and increases in the foreign exchange value of the dollar. The American demand for foreign goods meant that America demanded a lot of imports. 

Still in the 1990s the nation remained committed to free trade and pursued to establish new multilateral trade negotiations, worked on new trade negotiations that involved Europe and Latin America and worked to solve other trade disputes. For a large number of people in the U.S, the idea of free trade means the liberal movement of goods across nations and the world. This opens up opportunities and markets and allows for better relations among nations. 

The nature of the current trade agreements and trade policies might be called into question after the world fully recovers from the 2020 coronavirus pandemic. This might return some manufacturing and production to the United States, or perhaps curb China imports some.  

The history of the United States trade policy shows how the country began and how it grew slowly as the world grew with it. Because of some of the global conflicts that gripped the 20th century, the U.S benefited and was able to build a great production machine with a lot of trade potential. 

Get With A Brokerage You Trust

Here at Cordova Brokerage, we are on top of all the changes and nuances of the U.S import and export business. It can get complicated following the many restrictions and compliance requirements. If you are looking to get into exporting goods or need brokerage services, we are here to help. Call us today. 

 

The Origins of Trade & How to Get Started in the International Markets

a handshake superimposed over a cityscape at sunsetAs old as silk; as common as tea; as valuable as spices. The history of trade can be traced back for thousands of years. It’s almost something human beings are naturally inclined to do and a mutual agreement that is found in all civilizations. And, in fact, it was silk, tea, and spices that were the major trade items that sparked what would later be known as ‘international’ trade. Today, the biggest trading markets include the European Union, the United States, and China. Cordova Brokerage helps businesses dive into the world of international trade by helping companies establish secure and legal pathways for exporting and importing their goods. The trade industry, while lucrative, is composed of plenty of regulations and rules that can be difficult to navigate without the right level of experience.

The Early Days of Trading — A Human Impulse to Share Goods and Services

The early days of trading, however, involved domesticated animals like camels, carrying goods across lands. Fast forward to the Middle Ages, and you have the famous Silk Road. The Silk Road, of course, refers to the ancient network of trade routes that were established during the Han Dynasty of China. The famous Marco Polo traveled on these routes. And some of the most common goods that traveled from East to West and West to East included silk, tea, dyes, horses, saddles, honey, fruit, and more. 

Trade was then continued and advanced thanks to the forming of new countries and the establishment of routes, as well as the invention of ships, trains, buses,  and airplanes. In 1946, the Bretton Woods system goes into effect; it had been planned since 1944. It was designed to prevent further world conflicts and depressions. In 1947, 23 countries to the General Agreement on Tariffs and Trade. This rationalizes and improves trade among nations.  In the ’90s the European Union formed and centralized their trading power. Only a few years later, in 1994, the North American Free Trade Agreement (NAFTA) goes into effect as well. This trade deal changes the nature of trade between the North American countries and really impacts the border region when it comes to jobs, trade across the border, and more. 

The Importance of NAFTA — How It Reshaped North America’s Economic Ties

You will often hear arguments about the impacts of NAFTA. Depending on who you ask and when you ask it, but one thing that is undeniable is the fact that NAFTA did have a big impact on how the three neighbors do business. It also facilitated trade, so it made it easier for goods and services to flow back and forth. It fundamentally reshaped the economic relations between the three countries and drove regional trade to triple as well as cross-border investment. 

As a brokerage company located on the border, we know the impact of the deal. We also know that the implementation of the renegotiated NAFTA—called the USMCA— will have its own impact as well. We wrote a little bit about that in a recent blog

Trading in the Modern Day 

Today, trade works very differently than it did on the Silk Road, although the idea is the same. A powerful country will want a strong trade agreement that allows them to bargain and bring terms to the table. 

How To Prepare Your Product for Import and Export 

Here at Cordova Brokerage, we specialize in taking products to market in international markets. Whether it’s your first time, or you have been doing it for many years, the prospect of putting your products onto the world stage can be pretty exciting. Here’s a couple of things to consider right off the bat:

  • The name of your product. 
  • Packaging and labeling design. 
  • The size and quantity of your product

There is about $1. 2 trillion dollars worth of goods in the importing industry and about $772 billion in merchandise every year in exports that go to over 150 countries.  Every product you can think of is fair game to the global market. It’s why, if you have a successful business and a thriving product, trying your hand at the global market might be a good opportunity for you. 

The Possibilities that Lay at Trade’s Door 

Imports are important to all countries because no matter where you are there is something that cannot be produced or grown in your area. So importing comes down to three main things: 

Availability: There are some things that simply won’t be available naturally in certain areas.

Cachet: Some products develop value by the fact that they are imported from somewhere else.

Price: Some products are simply cheaper when they are brought in from another country, as opposed to producing locally. 

Every business needs its customers and finding your target audience and customer base is the next big step when embarking in international trade. Any manufacturer, supplier, crafter, or retailer is a good place to start or explore. You also want to consider the start-up costs and marketing costs in order to hone in on a specific audience more successfully. 

We Take Care of the Shipment, Forwarding, and Warehousing

Taking your business onto the modern Silk Road can bring lucrative opportunities for you and your company. For many, it opens up doors and increases investment and customer base. At the same time, the rules and regulations surrounding the transfer and shipment of goods and services across borders can get a little complicated and that’s why we are here. Here at Cordova Brokerage, we specialize in the movement of those goods, the paperwork, the storage, and freight forwarding, in order to protect your investment. 

How to Get Your Start in U.S Customs Brokerage

An aspiring customs broker finds out that he passed the customs exam

For most of the U.S population, customs brokerage is not a major talking point. In fact, customs brokerage is an industry that drives a nation but works in the background, like how the electrical wiring in your home is hidden but essential. For the few that think about brokerage, it can be a complex, exciting, and fulfilling job that opens up new ideas and perspectives. If you’re one of those people that find brokerage fascinating, we’ll take you through what you need to break into the customs brokerage industry.

Basic Requirements

According to U.S Customs and Border Protection, you’ll need to meet three eligibility requirements before you can become a customs broker. The three requirements include:

  • Be a U.S citizen 21 years of age or over
  • Not be a current federal employee
  • Possess good moral character

So if you’re old enough for a Bud Light, don’t work for the government, and aren’t a member of the mafia, you’re probably eligible to be a broker. Some companies prefer a bachelor’s degree, but it’s not required. This just covers eligibility; actually becoming a customs broker involves a few more steps.

Becoming A Certified Customs Broker

If you’re eligible, then the next step is to pass the Customs Broker License Exam. Before you freak out about the test, it’s an open book exam, so you needn’t stress about memorizing everything you’ll need to know. As far as what the test will go over, you can expect to see these topics:

  • The Harmonized Tariff Schedule of the United States (HTSUS)
  • Title 19, Code of Federal Regulations
  • Specified Customs Directives
  • Customs and Trade Automated Interface Requirements document (CATAIR)

These are the basics for a customs broker, so make sure to internalize all of this information. The test is four and a half hours long, and there is a $390 fee that needs to be paid a month in advance. If you receive a 75 percent or higher on the exam, congrats! You can move on to the next step, which is getting your customs broker license. Get ready to shell out another $200 for that, and to wait a while for background checks. Credit reports, arrest records, character references will all need to be reviewed before you are cleared. In the meantime, learn as much as you can about being a customs broker.

If you have any questions about customs brokerage or want to join our team, Cordova Brokerage can help. Contact us today for more information!

The Quick and Dirty of ISF in 2019: What You Need to Know

 

Container ship carrying container for import and export, business logistic and transportation by container ship in Atlantic ocean headed for America

If you’re reading this, you probably know that the world of import and export can be full of confusing information, especially in the current trade climate. ISF is no exception, and has gone through a number of changes since its inception in 2009. At Cordova Brokerage, we have an intimate understanding of ISF rules and guidelines, and wanted to give you a quick overview of how ISF has changed over the decade. 

ISF Overview

First, ISF stands for Importer Security Filing, which is simply a filing that details when, where, and how you plan to import goods into the United States. The ISF is usually referenced as a “10+2”, which refers to the information that the importer and carrier have to provide to Customs and Border Protection (CBP). Below are the 10 pieces of data required from the importer, and the 2 required by the carrier: 

  1. Manufacturer (or supplier) name and address
  2. Seller (or owner) name and address
  3. Buyer (or owner) name and address
  4. Ship-to name and address
  5. Container stuffing location
  6. Consolidator (stuffer) name and address
  7. Importer of record number/foreign trade zone applicant identification number
  8. Consignee number(s)
  9. Country of origin
  10. Commodity Harmonized Tariff Schedule number to six (6) digits

From the carrier:

  1. Vessel stow plan
  2. Container status messages

This information is largely non-negotiable, and has to be received by CBP no later than 24hrs before the goods are set to leave for the United States, and you can be subject to significant fines if the information is not filed on time or appropriately. That is why we at Cordova Brokerage specialize in ISF, because it can be a complicated and costly process if not done correctly. 

Quick History of the ISF

The ISF was first conceived of in late 2008, as a way to more accurately track the flow of goods into the U.S. It was part of the SAFE Port Act, a bill that was signed into law under the Bush administration to bolster maritime trade security and record keeping. The ISF was a pursuant of this bill, but full finings didn’t begin until 2016. Now non-compliance can cost several thousand dollars, which will certainly eat away at any potential profits that exporting/importing can reap. Recently, as of May of 2018, the definition of an ISF Importer was broadened to include non-vessel operating common carriers (NVOCCs), and also to be the goods’ owner, purchaser, consignee or agent. It is important to keep up to date on all the changes to ISF, and we at Cordova Brokerage are bonafide experts when it comes to ISF and shipping. Call us today if you would like more information on filing, or would like to use our services for your goods and cargo. 

CTPAT & CBP: What Security Guidelines Do I Need to Follow?

importing and exporting across the globeWhen it comes to importing and exporting goods, there are certain guidelines you should follow that ensure the safety of you, other importers, and the countries to which you are importing and exporting. By following these guidelines, you can rest assured knowing you are taking the safest route and making the safest decisions when it comes to importing goods. While these guidelines put a focus on both importing and exporting, they are especially important when importing to the United States. In fact, most are required by the governing institution that has put them in place.

At Cordova Brokerage International, we are dedicated to upholding and enforcing strict security and safety guidelines, and we try to ensure that all of our trade partners and the importer clients we work with do so as well. We don’t do this because we are picky or selective but because we want to ensure that safety is kept at all times.

Who Sets These Guidelines?

These safety and security guidelines are set by two governing organizations: the United States Customs and Border Protection agency and the Customs Trade Partnership Against Terrorism. These two organizations work to keep our borders and the rest of the United States safe, something that should be on the minds of any importer importing from other countries.

At Cordova Brokerage International, we are CTPAT certified, so you can rest assured knowing we take the necessary steps to help protect our country from acts of terror.

Security Guidelines for Trailers and Containers

Part of ensuring safety when importing is knowing how to properly load trailers and containers while adhering to the guidelines set by the CBP. These guidelines include:

  • Following the seven-point inspection process for empty trailers and containers coming through the borders
  • Following the 17-point inspection process for loaded tractors and trailers

While this may seem like a lot, it is absolutely necessary (and also required) in order to maintain our safety. The last thing we want is for what should be a successful import from another country to turn into something that neither country wants. By following these guidelines, you are doing your part in ensuring that every import and export is safely given and received.

Contact Cordova Brokerage International Today!

If you’re in the business of importing and exporting, working with a customs broker can help make going through customs easier by ensuring you are meeting all the guidelines set forth by the CBP and CTPAT. By working with Cordova Brokerage International, you can make the customs process much simpler for your business. Call us today to learn more!

Why Might I Need Warehouse Services?

warehousingIn a perfect world, we wouldn’t need warehouse services. But this is far from a perfect world, and the unexpected seems to always happen. And what kind of world would this be if we didn’t have any delays? We live in a delay-ridden world where the unexpected happens and we have to prepare for whatever that unexpected thing is, and usually, that means needing to get warehousing for the goods we are importing and exporting internationally. The last thing you want is to have nowhere to store them while going through customs, especially if this process takes longer than usual (and it already takes a while). Having a warehouse to store your goods where you know they’ll be safe from damage, theft, and spoiling is a good way to obtain peace of mind.

Here are a few reasons why obtaining warehouse services from us here at Cordova Brokerage International, in addition to our many other imports and exports brokerage services, is a good idea.

#1: Unexpected Customs Delays

Relations and going through customs these days are always changing and quite unexpected. You never know when or why there might be a delay with trying to get through customs. The last thing you want is for your imports to be stolen, damaged, or go rotten while waiting for you to get through customs. Our warehouse services provide you with a reliable place to store your items just in case of unexpected customs delays.

#2: Poor Weather

You never know when the weather might strike and leave you stranded while trying to make it through customs. Whether it’s a bad winter storm, dust storm, or thunderstorm, you want a place that’ll keep your valuables safe from the harmful effects of the weather. That’s exactly what you get with our comprehensive warehouse services.

Always Stay Protected

Life, especially if you work in the business of importing and exporting goods internationally, is unexpected. You always want to stay protected and prepared for whatever life hands you, especially in this kind of business. One way to do so is to work with a brokerage firm like us to help you get through customs more smoothly and to give you a safe place to store your goods.

Call Cordova Brokerage International Today!

If you’re in need of reliable and dependable international brokering services, Cordova Brokerage International is the place to call. Contact us today so we can help you!