Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.
It is one of the incongruities of the international trade system: A U.S. citizen returning from
a vacation overseas can exempt the first $800 of imported merchandise from customs duties and fees.
However that same citizen, if engaging a carrier to ship a laptop, would be responsible for duties
and fees above the first $200 of shipment value, and the carrier would have to comply with lengthy
and burdensome filing requirements before the shipment could enter U.S. commerce.
Past legislative efforts to raise the so-called de minimis threshold on low-value import shipments
have met with no success. But advocates for the change continue trying. In March, Sens. John Thune (R-S.D.)
and Ron Wyden (D-Ore.) introduced legislation that would hike the minimum levels to $800.
The legislation, the "Low Value Shipment Regulatory Modernization
Act of 2013," includes a "sense of the Senate" provision calling on the U.S. Trade Representative to push U.S.
trading partners towards adopting similar thresholds. (A "sense of" resolution merely expresses the opinion of the majority of
congress and is not enforceable as a law.) Today, de minimis thresholds vary from country to country,
ranging from Canada at $20 per shipment to Australia at $1,000. Besides the lack of harmony in the thresholds,
another obstacle is that many countries rely on import taxes to fund part of their well-established value-added
tax regimes, according to Eugene Laney, vice president of international trade affairs with DHL Express, one of
the companies pushing hardest for the change. DHL Express serves the United States only through international service.
In the House, similar language has been incorporated in an omnibus bill designed to modernize the
operations of the U.S. Bureau of Customs and Border Protection (CBP).
The current de minimis thresholds for merchandise, which date back to 1993, are intended to balance
the cost to CBP of assessing and collecting duties with the revenue derived from those collections. However,
supporters of the change in the cargo threshold—notably a group known as the Express Association of America
which includes the four major air express carriers—have said the administrative savings for CBP and the
industry would more than offset the loss of revenue.
In addition, hiking the threshold on low-value shipments could free up agency officials to focus on more serious
issues such as counterterrorism, counterfeiting, and product safety, they argue.
According to a 2011 report
issued by Washington-based think tank Peterson Institute for International Economics, the Congressional Budget
Office (CBO) estimated that raising the entry threshold to $1,000 from $200 would cost CBP about $44 million in
foregone revenue in 2016 and $49 million in 2020. However, the report says that the CBO failed to estimate
the benefits in expediting customs procedures, reducing paperwork, and improving the agency's overall productivity.
Raising the de minimis threshold would benefit the private express carriers and the U.S.
Postal Service (USPS) by reducing their compliance costs, according to the Peterson report. Shipments valued
between $200 and $800—when listed as one entry—are classified as "informal entries" instead of de minimis
shipments. Compliance for informal entries requires the completion of a CBP form that has 32 pages of instructions and demands numerous details
about the merchandise. Increasing the de minimis levels would save the express carriers and USPS about $56 million a
year in reduced paperwork and processing burdens, the report said.
All told, the net gain from raising the threshold would be about $17 million, the report estimated. Moreover, a
change in the levels "would open the gates to a substantial increase" in the volume of commerce, especially e-commerce,
the report's authors, Gary C. Hufbauer and Yee Wong, said. International e-commerce, which is a growing but still-small
part of the overall e-commerce pie, could expand even faster if "border frictions were reduced," they wrote.
Today, many companies that may want to expand into overseas markets are deterred by compliance costs that can
exceed the value of the shipment itself, DHL Express has long argued.
Based on data in the 2011 report, the number of entries for shipments between $200 and $800 that are processed
by the private express firms is roughly 3.8 million per year, with a declared value of about $1.7 billion per year.
USPS alone handles about the same number of entries with a roughly equivalent declared value, the report said.
Other groups supporting the proposed change include the U.S. Chamber of Commerce, the American Association of Exporters
and Importers, National Association of Manufacturers, and the U.S. Council of International Business.
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
Serious inland flooding and widespread power outages are likely to sweep across Florida and other Southeast states in coming days with the arrival of Hurricane Helene, which is now predicted to make landfall Thursday evening along Florida’s northwest coast as a major hurricane, according to the National Oceanic and Atmospheric Administration (NOAA).
While the most catastrophic landfall impact is expected in the sparsely-population Big Bend area of Florida, it’s not only sea-front cities that are at risk. Since Helene is an “unusually large storm,” its flooding, rainfall, and high winds won’t be limited only to the Gulf Coast, but are expected to travel hundreds of miles inland, the weather service said. Heavy rainfall is expected to begin in the region even before the storm comes ashore, and the wet conditions will continue to move northward into the southern Appalachians region through Friday, dumping storm total rainfall amounts of up to 18 inches. Specifically, the major flood risk includes the urban areas around Tallahassee, metro Atlanta, and western North Carolina.
In addition to its human toll, the storm could exert serious business impacts, according to the supply chain mapping and monitoring firm Resilinc. Those will be largely triggered by significant flooding, which could halt oil operations, force mandatory evacuations, restrict ports, and disrupt air traffic.
While the storm’s track is currently forecast to miss the critical ports of Miami and New Orleans, it could still hurt operations throughout the Southeast agricultural belt, which produces products like soybeans, cotton, peanuts, corn, and tobacco, according to Everstream Analytics.
That widespread footprint could also hinder supply chain and logistics flows along stretches of interstate highways I-10 and I-75 and on regional rail lines operated by Norfolk Southern and CSX. And Hurricane Helene could also likely impact business operations by unleashing power outages, deep flooding, and wind damage in northern Florida portions of Georgia, Everstream Analytics said.
Before the storm had even touched Florida soil, recovery efforts were already being launched by humanitarian aid group the American Logistics Aid Network (ALAN). In a statement on Wednesday, the group said it is urging residents in the storm's path across the Southeast to heed evacuation notices and safety advisories, and reminding members of the logistics community that their post-storm help could be needed soon. The group will continue to update its Disaster Micro-Site with Hurricane Helene resources and with requests for donated logistics assistance, most of which will start arriving within 24 to 72 hours after the storm’s initial landfall, ALAN said.