Global Logistics and Supply Chain Strategies - April 2008 - (Page 14)

You Can Stop Wondering When the Recession Will Hit—It’s Already Here, Euler Hermes Says Economists, politicians and business executives have been vigorously debating about when the U.S. economy will slide into recession. But Dan North, chief economist of Euler Hermes ACI, says the argument is moot. “I believe that the economy will not go into a recession; I believe that the economy is almost certainly in a recession already,” he said in a late February report. High oil prices, the delayed impact of monetary policy tightening and the burst housing-market bubble have all been conspiring to slow the economy for some time, North said. Fourthquarter 2007 gross domestic product grew at the “anemic” rate of 0.6 percent, as housing prices continued to plummet, consumer holiday spending tanked, foreclosures surged, and unemployment in the housing and finance sectors rose. The jobs report for January 2008 showed “negative growth”—that’s a decline in common English— which is a “virtually certain” sign of recession, according to North. Government action, in the form of a $168bn stimulus package and a big cut in the federal funds rate at the beginning of the new year, confirmed expectations of the slump. What’s more, the January minutes of the Federal Reserve Board twice used the word “downturn,” a euphemism for recession. But all is not gloom and doom, in North’s opinion. He sees the possibility of some economic recovery as early as the fourth quarter of this year. That’s when the impact of the Fed’s interest rate cutting will fully kick in. Meanwhile, the housing market should finally be starting to emerge from its slump. The U.S. is currently on the downside of a regular business cycle, North said, “but the upside is coming too. We just have to wait a few quarters for it.” Visit www.eulerhermes.com/usa. plex and tax-based approach” to the funding of surface transportation infrastructure. Visit http://financecommission.dot.gov. Don’t Get Too Comfortable About Global Trade: JPMorgan Punctures Import Compliance Myths Many companies aren’t fully aware of the risks that come with trading in the global market, according to JPMorgan Global Trade Services. In a recent white paper, the firm highlights five myths of import compliance: 1. A company’s exposure is limited to the amount of Customs duties. No, says JPMorgan—it’s equal to the value of the imported goods, plus duty. 2. You’re “out of the woods” when Customs releases your shipment. No, the statute of limitations on filing misstatements or omissions is five years. 3. Mistakes in the invoice are the fault of the seller. No, it’s the importer who’s responsible for what’s reported on the Customs entry. 4. It’s the customs broker’s problem when mistakes are made. No, the importer remains fully accountable for submissions made on its behalf. 5. The keeping of entry records is the exclusive job of the customs broker. Tough luck: importers are required to keep copies of all correspondence related to import transactions for five years. Bearing those facts in mind, JPMorgan said, allows companies to realize the full benefits of global sourcing. Visit www.jpmorgan.com/ts. Intermodal Transportation Institute Sees Hope on the Horizon for U.S. Infrastructure Improvements A handful of policymakers might finally be starting to recognize the critical need for improvements to the nation’s intermodal transportation infrastructure. That, at least, is the view of the University of Denver’s Intermodal Transportation Institute. ITI pointed to the release of an interim report by the National Transportation Infrastructure Financing Commission, which has two years in which to issue a final report to the U.S. Department of Transportation on highway and transit issues. “I am very pleased that the Commission recognized that our national infrastructure is in a physical and financial crisis, and delighted that its interim report clearly identified intermodal connectors as an important element in solving the nation’s surface transportation problems,” said Craig Lentzsch, a member of ITI’s board of directors and the Financing Commission. The report, he noted, called for a “significant infusion” of capital to upgrade and maintain the nation’s highways, transit systems and intermodal facilities. Lentzsch also called for a complete reassessment of the nation’s “current, com- 14 APRIL 2008 http://financecommission.dot.gov http://www.jpmorgan.com/ts http://www.eulerhermes.com/usa

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Global Logistics and Supply Chain Strategies - April 2008 Contents Editorial GL & SCS Exclusive Fast Forward Up Front Cover Story: Continuing to Add Ever More to Their Offerings, 3PLs Are - At Your Service Over the Long Haul Opinion: Freight Audit Bill Can't Show All Mistakes that Hurt the Bottom Line Opinion: The ‘Good-Freight’ and ‘Bad-Freight’ Trucking Customers Industry Voices

Global Logistics and Supply Chain Strategies - April 2008

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