Looking ahead to 2023: thoughts and opinions from Cole International's team
If the last three years have taught us anything, it’s that flexibility, resilience, and learning to navigate change and make swift decisions have become the norm in the logistics industry. Our core department leads share their take on the state of things as we enter a new year.
If you’re an importer or otherwise in the logistics space, it’s likely no surprise to you that the industry overall has felt like a constantly shifting landscape beneath us over the past few years. We might still be reeling from the effects the pandemic of 2020 left on the supply chain, but we are optimistic in our ability to move with change and leverage it for our success. Let’s see what the team has to say.
The big word for 2023 when it comes to freight is this: CHANGE.
There is simply too much unpredictability in all links of the supply chain to even suggest possible anticipated trends in the freight space. That said, anticipating the need to stay flexible, to be ready for change, and to prepare yourself as best you can for an ever-shifting environment is a good bet to keep you afloat in these times.
This constant change is a point of contention in the industry between carriers and companies, hence, the best way to look at freight in 2023 is as a truly dynamic set of processes that will fluctuate. Keeping an open mind and upping your resilience to shifting dynamics will be your best approach when moving goods in 2023.
U.S. customs brokerage
As 2022 comes to a close, it is natural to look ahead and see what 2023 is going to bring to us for opportunities and threats. One of the most watched items is the U.S. and China’s partner-foe dynamic. Groups such as the National Retail Federation are asking the U.S. Congress to eliminate entirely Section 301 duties on Chinese manufactured goods. China itself has filed a dispute with the World Trade Organization (WTO) over U.S. export controls on computer chip manufacturing. These two events alone demonstrate how the relationship between the U.S. and China continues to be strained. But how will this affect trade?
China is still a huge trading partner for the U.S. and the low manufacturing costs attract American companies who want a higher profit margin. We have companies that source raw materials, ship them to China for manufacturing and return them to the U.S. cheaper than had they been manufactured directly in the US.
But companies are increasingly becoming tired of the extra duties, the rolling COVID shutdowns, the high shipping costs that they have paid over the past two years, and the inconsistency of sailings in China. In fact, movement of manufacturing out of China has been increasing to places like Vietnam, India, and South Korea.
As long as the increasing cost of manufacturing in China, the associated shipping costs and the migration of American businesses moving production remain, the U.S. will have no incentive to reduce or eliminate the Section 301 duties. Therefore, we're not expecting them to go anywhere for a while.
Canadian customs brokerage
The biggest buzz from Canada customs is the roll-out of the CBSA Assessment and Revenue Management project, aka CARM. With Release 1 well underway and Release 2 now scheduled for October, 2023, we are guaranteed to see a shake-up in how-we-do-things in the customs brokerage space. Even if you are skeptical it will happen, registration in the CARM Client Portal (CCP) and lining up all your ducks is essential—and being prepared will save you greatly once R2 rolls out. If you are eager to avoid being presented with surprise paperwork and requests for payment (not to mention potentially longer wait times to get set up as R2 draws nearer) we highly recommend you set your CARM account up and get registered in the CCP as soon as you can. It could be the best new year's resolution you make!
Recently, the World Trade Organization (WTO) forecasted an anticipated drop in global trade in 2023. We at Cole International don’t quite see it that way, though. While it is extremely likely that geopolitical differences, persisting inflation and lower global demand are expected to negatively affect global trade in 2023, we remain optimistic. Things may shift, a recession may deepen in 2023, but our overall hunch is that global trade will pivot—not decline.
On the upside, we’re seeing ports and shipping companies adjusting to the supply chain issues brought on by the pandemic, with port congestion largely resolved. Looking globally, the lifting of Covid measures in China will be an important driving force of the global economy. Closer to home, the Early Progress Trade Agreement between India and Canada that is likely to be implemented in the second half of 2023 could bring new trade relations and opportunities between our nations.
The other, possibly more relevant, issue that may impact trade more significantly is sanctions imposed between nations—particularly those related to forced labour. Canada is currently imposing sanctions on 22 nations, and the need for importers to understand thoroughly where their goods are being made—and how—could not be more crucial. Only time will tell, but in our opinion, both sanctions and forced labour issues could stand to greatly impact the supply chain in 2023.
We're in this together
At Cole International, our departments work together to keep your goods moving seamlessly around the globe. Whatever 2023 may bring, we're prepared. Our long history of moving goods successfully has allowed us to build the relationships and resilience that fortifies our optimism for the future. From freight forwarding to customs brokerage, plus all the support you need from a full-service logistics company, we've got you covered. Contact us today and we'll get you on your way.
Proactively serving our customers. It's what we do.
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- Freight updates December 14, 2022: latest news and updates on the worldwide supply chain