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Issue 4 2021 - FBJNA From the Editor


CONTACTS 2021 SALES


By Karen E. Thuermer


Two presidents before Biden have talked about overhauling the infrastructure of the United States. President Obama’s plans were blocked by Republicans. Trump promised a $1-trillion proposal and only declared an “infrastructure week” – no legislation. Now President Biden promises to take on the challenge and is holding meetings


with intentions to put forward a massive $2 trillion legislative package, one -- pundits say -- would be akin to FDR’s federal works projects of the 1930. His Secretary of Transportation, Pete Buttigieg, is well received by industry groups and is said to superior at presenting persuasive arguments. Trade groups, including the conservative American Trucking Associations, support


the Biden Administration’s ideas to increase spending on infrastructure. “As the Biden Administration rolls up its sleeves and begins the heavy liſt of rebuilding


America’s ailing infrastructure, it will find a constructive partner in ATA,” the association wrote. “We stand ready, willing and able to get the job done.” The US Chamber of Commerce, also a conservative group, is pushing a campaign to


get the US Congress to approve a plan by July 4. A coalition of more than 300 businesses urged Congress in a letter sent in March to make infrastructure a top priority and stands ready to pressure both parties to unite around this landmark legislation. If passed, the bill would release funds to address America’s long crumbling


infrastructure, which includes – among other items – highways, roads and bridges, airports, rail lines, waters systems, broadband networks, and electricity grids. It’s worth noting that on March 3, the American Society of Civil Engineers (ASCE)


released its Report Card for America’s Infrastructure. It gave the United States a C- grade. While a slightly better than the D+ given the last time in 2017, the ASCE comments that a major federal investment is long overdue. Whether President Biden wins the needed support of Congress is yet to be seen. His


plan comes on the heels of the $1.9 trillion COVID-19 relief bill that passed thanks to Democrats only on March 10. Some lawmakers, primarily Republicans, have called for Washington to put the brakes on spending despite the long-term benefits, fearing the federal government is digging itself into a hole with debt. Besides addressing America’s failing infrastructure, President Biden is also focusing


on US supply chains. An article written by Venable LLP points to the Executive Order President Biden issued in late February to create resilient and secure supply chains for critical and other essential goods and materials. Concerns, Venable LLP writes, center around the security and resiliency of US supply chains, citing the strain caused by shortages of essential products ranging from semiconductor chips to personal protective equipment (PPE). “The administration has specifically called out the shortage of PPE in 2020 at the


beginning of the COVID-19 pandemic as unacceptable,” Venable LLP writes. “More broadly, pandemics, cyber-attacks, climate shocks, terrorist attacks, and geopolitical and economic competition are all listed in the Executive Order as examples of conditions with the potential to reduce critical manufacturing capacity for much-needed goods.” To address these issues, the Executive Order calls for an immediate 100-day review


of the supply chains of four sensitive high-tech sectors: semiconductor manufacturing and advanced packaging; large-capacity batteries; strategic and critical minerals; and pharmaceuticals and active pharmaceutical ingredients. As part of a longer-term review, the Executive Order also directs the federal


government to conduct a more in-depth analysis, over a year-long term, of a broader set of US supply chains. The Order also stresses the importance of the United States coordinating with trading partners and allies to ensure supply chain resiliency beyond the United States. The intent of the 100-day review is to identify potential near-term actions to address


vulnerabilities in the supply chain of these critical goods and to close gaps, as needed. The Order also requires an in-depth one-year sectoral assessment of a broader set


of US supply chains. These assessments are designed to focus on six key industrial sectors in particular: defense industrial base; public health and biological preparedness industrial base;


information and communications technology (ICT) industrial


base; energy sector industrial base; transportation industrial base; and agricultural commodities and food production supply chains. Venable LLP notes that it’s particularly important that providers of transportation and


logistics services pay particularly close attention to this year-long assessment process, given the intense scrutiny of supply chain resilience, security, diversity, and strength. “As the Executive Order calls for a regular and ongoing process to review supply chain


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resilience, including a quadrennial review and reporting process, this issue appears poised to remain front and center for the foreseeable future,” it writes. Vernable also emphasizes that businesses will need to monitor the supply chain


review process as it unfolds to stay abreast of any changes that could impact their supply chains. “Proactive outreach to key government stakeholders may be critical during the review period,” it says. Meanwhile, shippers continue to face numerous stress points. At the forefront


is port congestion, a shortage of containers and a shortage of chassis for hauling containers away from seaports. Critics point to the ongoing imbalance in US logistics networks are partly due to


the shortage of chassis. The US International Trade Commission is investigating this issue with an eye on the possibility that US manufacturers may have been afflicted by alleged dumping of supplies from China. According to Panjiva Research, US imports of chassis dropped by 22.5% YoY


in 2020 in part due to factory closures linked to the pandemic. Imports from China accounted for 23.6% of the total while those from Canada and Mexico represented 66.2%. The leading Chinese supplier has been CIMC, with shipments linked to the firm to the US already having dropped by 50.6% year over year in 2020. Relations between the US and China are without a doubt frosty. President Biden


maintains that trade relations between the two nations “only touch a smidgen of what the relationship with China really is about.” However, trade data emphasizes the importance of that relationship, particularly


to US exports. For February, for instance, US international trade rose by 3.7% YoY, the fourth straight expansion. That was largely down to a 10.1% rise in imports and particularly an 18.4% jump in consumer goods imports as demand remained robust and congestion at ports was worked through. Exports, however, fell by 5.4% YoY, the 14th straight decline and the 22nd in the


past 24 months. The automotive industry and its semiconductor woes are partly to blame with exports linked to the sector down by 10.4%, Panijiva Research reports. The February winter storms in the southern US contributed to a 1.2% dip in industrial supplies. Total US exports of food increased by 16.9%, though that was supported by food


exports to China under the phase 1 trade deal which jumped 137% higher. Excluding those, food exports grew by just 7.4%. Exports of energy products to China surged 14- fold and manufactured goods rose by 14.1% year over year. Total US exports excluding all phase 1 product shipments to China fell by 7.3% versus the 5.4% headline figure.


///NEWS


Freight Business Journal North America - FBJNA reaches out to the decision makers and influencers involved in international freight transport and logistics. FBJNA boasts the most informative and authoritative source of information with unrivalled in depth knowledge of the rapidly changing freight business environment. Our complimentary website www.fbjna. com provides the most up to date news and analysis from within the international shipping industry.


If you have any stories or letters which should be of interest or any feedback on FBJNA, please contact our editor Karen Thuermer - karen.thuermer@fbjna.com


next issue >>


Our next issue includes features on US/Mexico/Canada Trade, Refrigerated Container Market Growth and Gulf Coast Ports.


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