Global Logistics—February 2006

Tough Talk on China Trade Policies

On the heels of news that America’s trade deficit with China rose to $201.6 billion, the Bush administration announced its plan to step up enforcement of U.S. trade laws governing China. The move was widely lauded by businesses and lawmakers. Following a six-month, top-to-bottom review of America’s trading relationship with the Asian economic giant, the office of U.S. Trade Representative Rob Portman disclosed plans to adjust its trade policy with China. One milestone is the creation of a task force to monitor China trade violations—the first time a country-specific enforcement group has been formed. A chief counsel for China trade enforcement will lead the task force. "China should be held accountable for its actions and required to live up to its responsibilities, including opening markets and enforcing intellectual property rights," Portman said at a recent press conference. he ever-increasing U.S./China trade deficit—the largest deficit the United States has ever incurred with a single country—has increased pressure on the Bush administration from lawmakers who want to see a crackdown on what they believe are unfair trading practices. Manipulating its currency, and committing copyright piracy, are common complaints leveled at China. Portman argued that China—which joined the World Trade Organization in 2001—was no longer an apprentice, but rather a "mature trading partner" that should be accountable for these and other trade violations. The United States’ trade deficit with China was not the only one to hit an historic high in 2005—the United States posted record imbalances with Japan, Europe, the OPEC countries, Canada, Mexico, and South and Central America as well. The overall U.S. trade deficit rose to an all-time high of $725.8 billion in 2005, up 17.5 percent from the previous record of $617.6 billion, set in 2004. Record imports of oil, food, cars, and other consumer goods drove the increase, according to the Commerce Department.

RFID Goes Global

The prevalence of RFID in international manufacturing, retail, and consumer packaged goods companies, as well as military forces, is increasing rapidly. No longer confined to major companies and leading nations, organizations around the globe are tapping into RFID to enhance order tracking, inventory management, and supply chain security. As a result, global manufacturers of RFID products and technology have seen an uptick in business. The wide-ranging use of RFID in the global supply chain is making news throughout the world. Here is a roundup of recent global RFID developments:

• RFID on the rise in China. China’s RFID market grew by 8.6 percent in Q4 2005, according to international research firm Analysis International’s China RFID Market Quarterly Tracker Q4 2005. Sales in China’s RFID market increased from 568 million yuan ($US 70.5 million) in Q3 2005 to 617 million yuan ($US 76.6 million) in Q4 2005, according to the report. The growth came mostly from companies replacing 2G ID cards, and public transportation and expressway systems applications. Future growth in China’s RFID market will be driven largely by the manufacturing industry, while cost and standards are the major factors currently challenging China’s RFID development, finds the report.

  
  

• Global armies get RFID-Savi. The Spanish Armed Forces is the latest military organization to adopt Savi Technology’s interoperable global RFID network to track consignments for its defense forces. Spain’s military follows Australia, Denmark, and the United Kingdom in doing so. The RFID network will help Spain’s military branches collaborate closely on joint-force logistics operations while improving enterprise-wide supply chain efficiency and visibility.

• A $50-billion RFID market? Malaysia’s RFID market is projected to record 20.6-percent compound annual growth from 2004 to 2009, with revenue potentially reaching $50 million in 2009, according to research from global consulting firm Frost & Sullivan. By contrast, Malaysia’s RFID market reported revenues of $19.6 million in 2004. The Malaysian government is currently undertaking diverse RFID pilot projects in the field of evidence management systems and authentication, which it expects will boost future demand for RFID components.

• Tag printing around the globe. Underscoring the increasing global need for RFID tag printers, Zebra Technologies recently announced it received regulatory approval from Taiwan and South Korea, bringing to 39 the number of countries using its tag printers for RFID applications. Seven other countries have pending approvals to use Zebra’s technology, which will bring RFID printing/encoding technology to companies in most major global markets. Because requirements differ by country, growing demand exists in global markets for UHF RFID printer/encoders that support EPC Gen2, EPC Class 1, and other prominent RFID protocols, in addition to unique frequency bands, output power, and other localized requirements.

Schneider Acquisition Targets Global Market

Aiming to beef up its international-to-inland-delivery capabilities and keep up with shipper demand for global logistics solutions, Green Bay, Wisc.-based Schneider Logistics Inc. recently announced plans to acquire American Overseas Air Freight, an international freight forwarder and licensed customs broker. American Overseas, which specializes in import/export shipping and handling via air, ocean, and truck, serves a wide range of multinational clients from its locations in El Segundo, Carson, San Diego, and San Francisco, Calif. "The freight forwarding and customs brokerage expertise of American Overseas will complement Schneider’s existing transportation and logistics services offerings as we continue to expand globally," reports Tom Escott, president, Schneider Logistics. American Overseas will keep its name, functioning as a wholly owned Schneider subsidiary. Ron Barker, American Overseas’ president, will continue to lead the organization once the acquisition is finalized.