ITC Reports on Logistics Services Trade, Etc.
The International Trade Commission has issued a report, "Recent Trends in U.S. Services Trade, 2008 Annual Report," which finds, among other things, that infrastructure services, including logistics, grew faster in 2006 in cross-border exports than the average annual basis in the preceding five-year period.
Sign up for a free preview to unlock the rest of this article
If your job depends on informed compliance, you need International Trade Today. Delivered every business day and available any time online, only International Trade Today helps you stay current on the increasingly complex international trade regulatory environment.
Logistics Firms' Revenue Growth, M&A Activity, Technological Advancements
The ITC reports that both U.S. and foreign logistics firms1 experienced significant revenue growth during the period 2001-2006, as demand for logistic services increased. Growth in the demand for logistic services was the result of increasing globalization of manufacturing and manufacturers' growing interest in outsourcing supply chain functions.
Overall, international merger and acquisition (M&A) activity has altered the competitive landscape for the logistics industry by creating larger, more diversified firms with extensive geographic networks. In addition, although cross-border transactions remain the predominant form of U.S. trade in logistic services, rising by nearly 30% in 2006, recent mergers between U.S. and non-U.S. firms have made affiliate transactions an increasing part of logistic services trade. Nonetheless, regulatory barriers with respect to logistic services still exist, with the most prevalent being those related to customs procedures, establishment abroad, and the ownership and operation of transportation equipment.
Significant cross-border M&A activity in logistics and other infrastructure service illustrates the importance of suppliers' proximity to consumers abroad. Technological advancements, such as mobile services in telecommunications, tracking in logistics, and supply chain management and customer databases in retailing, demonstrate the progress made by multinational firms in enhancing speed, efficiency, and reliability while managing operational costs throughout widened affiliate networks.
Expansion of Services Trade Also Due to FTAs, Defined Regulations, Etc.
The ITC also reports that the expansion of the services trade is due to, among other things, efforts to liberalize impediments to services trade and less direct government intervention in regulating infrastructure services continue to have a favorable impact on the expansion of infrastructure services trade. During the period covered by the report, the U.S. continued to negotiate free trade agreements with certain trading partners to reduce market access and national treatment impediments for U.S. companies seeking to expand services exports and/or increase their commercial presence abroad.
Additionally, international agencies and national statistical offices are working to develop more detailed and internationally comparable data on services trade, largely in response to demand from trade negotiators and trade policy makers. Revisions to classifications and definitions and new regulations in the European Union should help many countries provide more detailed reporting of particular services industries and of services trade with particular trading partners.
1The ITA states that its report on logistics pertains largely to third-party logistics (3PL) firms, including asset and non-asset based firms. Asset-based firms use their own equipment to provide freight transportation by air, land, or sea; non-asset based firms arrange freight transportation for their clients by contracting with asset-based 3PLs or with other commercial transportation firms.
ITC press release (dated 06/30/08) available at http://www.usitc.gov/ext_relations/news_release/2008/er0630ff2.htm
ITC report, "Recent Trends in U.S. Services Trade, 2008 Annual Report" (Inv. No. 332-345, dated June 2008) available at http://hotdocs.usitc.gov/docs/pubs/332/pub4015.pdf