Obama Administration: Promotion is Key to Doubling U.S. Exports

The key to exporting goods to overseas markets is establishing an international presence, and shippers should make use of the power of promotion, according to Michael Masserman, executive director for export policy, promotion, and strategy at the U.S. Department of Commerce. Speaking at the Containerization and Intermodal Institute conference in Chicago on June 25th, he urged American exporters to use the expertise, resources and facilities offered by the U. S. Commercial Service to promote their goods abroad. He noted that every dollar spent on the commercial service results in $235 in U.S. Exports.

"More than 96 percent of the world's consumers live outside of the United States," he said. "The goal of doubling exports is daunting, but some sectors—such as automobiles—are showing terrific growth."

Masserman is in charge of facilitating President Obama’s National Export Initiative (NEI), an initiative the president laid out in his 2010 State of the Union address to double exports by the end of 2014. He also oversees the Trade Promotion Coordinating Committee, which is made up of the relevant trade agencies within the U.S. Government, and he coordinates with private-sector companies, trade associations, chambers of commerce, and institutions such as Brookings, on global trade/export policies.

Jeff Graber, senior international trade specialist with U.S. Commercial Service, explained what kinds of services were available to shippers.
"We can help with far-reaching information-such as market potential and challenges, guidance on cultural issues and protocol, find sales channels and business partners, identify and assist with legal and regulatory hurdles and settle disputes," he said. He also noted that market potential and challenges as well as trade shows and missions are on the service's expertise list.

The half-day conference, "Doubling U.S. Exports—a Reality Check," drew more than 100 attendees and heard remarks from ten experts including representatives of government, rail and ocean carriers, ports, third-party logistics executives and shippers.

"Shippers and potential exporters do not make enough use of what we offer,” Masserman concluded. “But our export assistance centers in 100 U.S. locations work with overseas colleagues to get whatever information is needed and embassies and consulates in 74 countries abroad make contact with local government representatives and business."

Christopher Lytle, executive director of the Port of Long Beach, noted that while his port is the second busiest in the United States, half of what is exported to Asia is empty boxes.

"Exports have grown, just not as fast as imports,” he said. “In fact, they have doubled since the mid-1990s—but that has taken nearly 17 years. In that same time, imports have increased four-fold."

Lytle said he believes the U.S. could double exports, and that China represents a major opportunity.

“They already have so much of our money selling their products to us,” he said. “Free Trade Agreements will boost exports. Lowering trade barriers is going to make a big difference."

He noted the top-growing U.S. exports are likely to be grains, fruit and meat.

"These exports are already well regarded and in demand in Asia, and they will be in even more demand as Asian economies grow,” he said. “So can we double exports? I say definitely."

James Newsome, president and CEO of the South Carolina State Ports Authority, noted that there are limitations for export growth. These include container supply, transload capacity, carrier pricing on low-value commodities, harbor depth and dredging needs, inland weight issues, rail and truck capacity and alternative sourcing.

"Emerging markets will continue as a growth engine," said Newsome. "The U.S. focus on exports is appropriate but this focus must be on products that provide differentiation. Logistical challenges will be more significant," he said, "which is why creative solutions are required."

Gregory Tuthill, senior vice president of sales and marketing for NYK Line, noted that export market conditions continue to be characterized as brisk with high potential for future growth but at more modest increases in some countries and categories.

“Food products will be more resilient to some of the global economic challenges, but there are signs of demand easing with slower growth forecasted for China, Brazil and Europe,” he said. “The European crisis is linked to all markets and will have some impact on U.S. exports based on slower or negative GDP growth.”

Also from the ocean carrier side, Edward Zaninelli, vice president of the Transpacific Westbound Trade for OOCL, noted that infrastructure improvements need to continue, including East Coast ports being upgraded for 8,000-TEU containerships and placing a major transloader in the Los Angeles/ Long Beach basin on the West Coast. Also, a near dock rail terminal is needed for the BNSF rail and in LA/ Long Beach. "Rates have to cover costs, construction at the ports needs to be faster and everything should be on the table as transparency is required," he added.

Terry L. Bunch, director, logistics and customer service for Rayonier, Inc., a global supplier of performance fibers, timber, real estate and wood products, also urged less ocean freight rate volatility. As an active exporter, Bunch echoed the call for an adequate, efficient infrastructure and an adequate supply of high quality equipment.

"We also need to succeed in a globally competitive economic regulatory environment," he added.

Norfolk Southern's Ed Elkins, director international marketing for the railway, spoke from an intermodal perspective and said that rail has new capacity, new corridors that are either operational or nearly complete, new terminals opening in 2012, new service lanes available across the network and an expanded service portfolio. Prepared for a growing export market, Elkins said that his company has expanded, reliable service coverage from all major East Coast ports as well as efficient and flexible intermodal operations across the network.

Consultant Paul Bingham of CDM Smith said he feels the goal to double exports is a "stretch."

"To increase U.S. exports in five years from $1.6 trillion in 2009 to $3.2 trillion by the end of 2014 is ambitious now as we are coming out of recession,” he said. “A strong export rebound was up 16.7% in 2010 and up almost 15% in 2011 to $2.1 trillion, ahead of schedule to meet the goal. However 2012 U.S. export growth could slow to 5%, recovering perhaps to near 8% growth in 2013-2014, leaving the goal unmet. The U.S. would have to see exports grow at an average rate of 14.4% for each of these last three years to meet the goal."

Related Editorial:

Top Performers Master Demand and Supply Chains

2011 Logistics Spend was 8.5% of U.S. GDP

Import/Export Records Set in First Quarter 2012

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