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 | EU Chemicals Regulation: ECHA Flags January 2011 Classification, Labelling and Packaging Deadline | |
May 19, 2010 - The European Chemicals Agency (ECHA; Helsinki) has warned the chemical industry that it must start preparing now to submit data relating to the Classification, Labelling and Packaging (CLP) of chemicals on January 3, 2011. ECHA says it is expecting about two million notifications from the industry relating to CLP. Companies will be required to submit notifications on how they classify and label their chemicals, irrespective of volume of production or sale.
To date, ECHA has received just 1,000 CLP notifications. There are 224 days to go until the deadline. "We don't want the same situation [as with Reach pre-registration] where we receive everything in the last two weeks. This would be very challenging for everybody," says Christel Musset, director/ registration for ECHA. ECHA says it has IT tools "in place" to facilitate CLP notifications. Policing of CLP notifications will be applied at the national level, ECHA tells CW.
"Our advice is to do [the application] as early as possible," says Geert Dancet, director/ECHA. Dancet made his comments in an opening address at ECHA's 4th Stakeholders' Day, an event to address the concerns for all chemicals stakeholders held today in Helsinki.
The CLP application deadline follows the Reach's first major deadline of substances pre-registration on November 30, 2008. A recent survey undertaken jointly by ECHA and chemical industry associations has identified that companies plan to register 4,500 substances by the November 30, 2010 deadline. ECHA says it is not changing its estimates of the overall number of expected registration dossiers of between 28,000 and 35,000.
ECHA is once again calling on lead registrants of Reach dossiers for the November 30, 2010 deadline to identify themselves to ECHA "as soon as possible, to reduce remaining uncertainties." ECHA has published a list of substances due for registration on November 30 on its website to allow downstream users to indicate whether they plan to register a substance they have already shown interest in.
Meanwhile, ECHA is in line to receive more money from the European Union, Dancet says. The specific increase for the potential increase in money for the agency has not been disclosed. The promised increase in funding follows a visit in recent days by several members of the European Parliament's Environment Committee. The group "expressed their support for Reach and Classification Labelling and Packaging [CLP legislation] and their desire to help us make it all a success," Dancert says. "In their view, ECHA should get more resources to undertake the many tasks under Reach, CLP and biocides legislation."
Chemical Week
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| Canada signed a free trade deal with the small Central American economy of Panama |
May 15, 2010 - OTTAWA - Canada signed a free trade deal with the small Central American economy of Panama on Friday, continuing the country's trade liberalizing efforts in the hemisphere.
Trade Minister Peter Van Loan said the deal will give Canadian businesses opportunities in construction, education, manufacturing, logistics, human resources, distribution, energy and tourism.
"This agreement will eliminate tariffs on a range of Canadian products and provide better access for Canadian services providers to Panama's market," he said.
"It will also secure market access in the area of government procurement, opening more doors for Canadian businesses looking to participate in the Panama Canal expansion and other infrastructure projects."
Van Loan noted that as part of the agreement, the two countries are also signing to side deals on labour rights and environmental protection.
According to the government, Canadian merchandise exports to Panama totalled $88 million in 2009, a 52 per cent increase since 2005.
Under the Conservative government, Canada has stepped up trade negotiations with Latin American, including deals with Colombia and Peru, and on-going talks with El Salvador, Guatemala, Honduras and Nicaragua.
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| HK air cargo up 38pc, seventh straight month of growth |
May 18, 2010 - AIR CARGO tonnage at Hong Kong International Airport (HKIA) posted continued growth for a seventh consecutive month, surging 38 per cent year on year to 354,000 tonnes in April, said the airport authority.
Air traffic movements also increased by 2.7 per cent over last April to 24,725 but passenger volume declined 1.5 per cent slightly to 4.2 million.
Strong cargo growth was attributed to the continuing recovery of export markets in North America and Europe. Exports rose 57 per cent while imports were up 30 per cent and transshipments increased 10 per cent. From January to April 2010, HKIA handled 1.3 million tonnes of cargo and 94,825 aircraft movements, representing year-on-year growth of 35.1 per cent. On a rolling 12-month basis, cargo throughput was up by 9.3 per cent to 3.7 million tonnes year on year.
Shipping Gazette - Daily Shipping News
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| Japan exporters fret as EU steps up Asia FTA talks |
Japanese officials seek to persuade EU to look into bilateral free trade pact
May 18, 2010 - A GROUND-BREAKING free trade agreement that South Korea is expected to sign with the European Union later this year has Japanese exporters worried that they are in danger of losing out in Europe as the EU steps up the pace of FTA talks with others in Asia including Singapore, Vietnam and India.
Meanwhile, competition between Europe and North America to stake out a claim in Asia's booming economies through regional trade agreements is hotting up as both blocks see the prospects for gaining greater access via the Doha Round of the World Trade Organisation (WTO) to be diminishing.
'The EU's focus has been on the WTO but now this is shifting to FTA's' as a means to gain access to markets in Asia and elsewhere, according to Andra Koke, a senior official in the directorate general for trade at the Brussels-based European Commission.
At the same time, Washington is pushing to expand the Trans Pacific Partnership (TPP) agreement - which also includes Singapore among its members - and which is seen as a kind of 'super FTA' embodying all forms of trade, investment and services liberalisation.
FTAs are 'here to stay', whatever happens to the long-stalled Doha Round of multilateral trade negotiation, Ganesh Wignaraja, principal economist at the Asian Development Bank's office of Regional Economic Integration told The Business Times.
The drive by both the EU and the US to pursue aggressive FTA policies threatens Japan with being left out in the cold, and also poses a challenge to China's policy of trying to limit trade and investment cooperation in Asia to the Asean+3 group of countries, analysts say.
EU members have an eye especially on tapping into the Asean Single Market, which is due to come into operation in 2015, the EU Commission's Ms Koke told a seminar organised by the Asian Development Bank and the ADB Institute in Tokyo.
An EU free trade agreement with Asean as a whole would be 'too big a step' at this stage and so the EU is focussing instead on bilateral FTAs with Singapore and possibly Vietnam, as well as India, she said.
'The EU has been slow in coming to Asia and its presence is still limited,' Masahiro Kawai, dean of the Asian Development Bank Institute told the meeting. But this is changing now the EU has completed negotiations with South Korea and is negotiating with Singapore, he noted.
Japan can see the dangers of being left out. 'The EU-South Korea free trade agreement will come into effect some time this year and this could have disadvantages for Japan, said Kenko Sone, director of the international economy division at Japan's Ministry of Foreign Affairs.
He cited as an example the fact that South Korea will enjoy preferential access to Europe's market for motor vehicles and electronic consumer goods such as television sets as a result of its FTA with the EU. EU external tariffs on such goods range between 10-15 per cent.
'We are working hard to persuade the European side to launch joint studies into a possible Japan-EU free trade agreement,' Mr Sone told the ADB/ADBI seminar. 'But the European side has reservations,' he acknowledged.
The EU is worried about various 'non-tariff barriers' that it perceives to be blocking entry to the Japanese market. But Tokyo is ready to tackle such barriers, according to Mr Sone. 'We would like to show the European side how anxious we are to open our economy.'
'The EU is very much interested in coming into Asia and Japan can provide a good gateway to the rest of the region provided it tackles problems that cause it to be seen as a closed market,' Mr Sone said. 'Everything is on the table' for discussion in FTA talks with Europe, he added.
Similarly, Ms Koke insisted that sensitive areas for the EU and Japan such as agricultural market access would 'not be off the agenda' in discussions with Japan and others over agricultural access. Every FTA must provide a 'balance between winners and losers', she added.
While the EU pursues bilateral FTAs in Asean, which Mr Sone suggested could be integrated into a single agreement eventually. The US has seen its bilateral FTA with South Korea bogged down by opposition in Congress and the Obama administration is pursuing a bolder multilateral initiative.
The TPP was launched in 2005 among Brunei, Chile, New Zealand and Singapore but is envisaged to include also the US, Australia, Peru and Vietnam. Canada and Malaysia are also seen as possible members with a view to making the TPP an Asia-Pacific free trade area, and there is pressure on Japan to join.
Some sources say that the US could announce its accession to join the TPP during the Apec summit meeting due to be held in Japan at the end of this year, which would trump European initiatives and provide an alternative to the China-supported idea of an Asean+ 3 free trade agreement.
By ANTHONY ROWLEY
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| Maersk kicks off Viet-US service | |
Direct LA service to take only 18 days compared to 21-30 days earlier
May 14, 2010 - (SINGAPORE) Vietnam's big plans for export shipping have met their match in Maersk Line's Mathilde Maersk, the largest vessel to ever call at a Vietnamese port.
The 367-metre vessel called on Tuesday at the SP-PSA International Port that sits near the mouth of the Cai Mep-Thi Vai river, kicking off Maersk's direct weekly service to Los Angeles.
'This has been driven by very clear customer demand. Our customers want a direct service to the West Coast of the United States in order to have a reliable and fast transit time,' said Peter Smidt-Nielsen, Maersk Line's country manager for Vietnam and Cambodia, at a media briefing in Ho Chi Minh City on Tuesday.
While its Vietnamese customers like Hung Vuong Corporation (HVC), an exporter of catfish, used to expect an indirect shipping route to the United States to take anything from 21 to 30 days, this new direct service will have a transit time of 18 days.
'With the direct service, cargo can be delivered faster, payment will also come faster, and this will improve cashflow. We will also be able to expect stable delivery times,' said Duong Ngoc Minh, the president of HVC.
Already, firms like HVC are expecting shipping volumes to pick up after a dismal 2009. HVC is projecting shipments worth US$250 million for the seafood industry this year, compared to US$210 million last year.
At 9,038 twenty-foot equivalent units (TEUs), the Mathilde Maersk, along with 13 of its sister ships, will ply the direct route to Los Angeles, stopping at Yantian, China, and Hong Kong along the way.
While Maersk's direct Trans-Pacific 6 service is the port's third such call service to the United States across the various liners, direct shipping routes to the United States have only recently been gathering momentum in Vietnam, spurred by the deepening of the harbour last May to accommodate deep-sea vessels.
Work is already underway at the SP-PSA Terminal to enable it to handle more ambitious container shipping volumes.
While the first phase of 600 metres of berths with a 14.5-metre water depth are now operational, the second phase will bring it to 1,200 metres of berths. Once fully completed, SP-PSA will have a projected annual capacity of over two million TEUs of containers.
By JOYCE HOOI
The Business Times
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| BA wins court bid to block strike, talks go on | |
May 18, 2010 - British Airways (BA) won a legal bid on to block a threatened five-day strike by cabin crew members, though unions said they would immediately appeal the decision, Reuters reported.
The first of four five-day walkouts had been due to begin at midnight, but will now not go ahead as planned.
BA's lawyers had argued that the Unite union had broken the law on a technicality over the way it had conducted the strike ballot.
In the end, Justice McCombe granted the order against the union. He said the "balance of convenience" in his view required the granting of an injunction.
BA said it would aim to restore a full flight slate at London's Heathrow airport by the weekend, pending any further disruption from the volcanic ash cloud.
It had originally anticipated operating only 60 percent of long-haul flights out of Heathrow over the strike period and 50 percent of short-haul flights.
Cargonews Asia
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| China air cargo industry urged to use e-freight | |
May 17, 2010 - Government and industry go-between, China Air Transport Association (CATA) appealed to industry players at a recent summit in Beijing to adopt e-documents if they wanted to get a bigger share of the air cargo market.
"We just can't afford to keep using paper any more, " said Wei Zhengzhong, secretary general of the association.
"Paper-based cargo documents in China cannot be used effectively or extensively when dealing with international trade or shipping as they do not adequately meet their needs,'' he said.
One of the main roles of the CATA is to act as a bridge between the government and business enterprises in order to ensure a smooth and sustainable development of China's air cargo industry.
Wei said in the air cargo industry in China a large amount of paper documents are employed, which was costly and required a lot of manpower. "The process of collecting and releasing forms is also fraught with inefficiencies. For example, companies sometimes lose the forms in the process."
Steve Smith, supply chain management director, International Air Transport Association (IATA), told Cargonews Asia: "The loss of paperwork is a real and common scenario on a global basis and is not solely an issue in China,"
China is one of the countries targeted by the International Air Transport Association (IATA) for e-freight implementation this year and they plan to go live with e-freight processes at Tianjin Binhai International Airport by June.
Stakeholders include the airport authority, Sinotrans, Dimerco, Kerry Logistics, Cosco, DHL Global Forwarding (DGF) and Expeditors as well as China Cargo Airlines, Air China, Grandstar, EVA Air and Great Wall Airlines.
The implementation at Tianjin will involve a new Customs system that is fully aligned with World Customs Organisation and IATA e-freight standards.
"We have been flexible in our approach to the implementation of e-freight in China, as the process has to be carried out in parallel with the implementation of a new system by Tianjin Customs,'' said Smith.
IATA predicts that by removing 12 core documents for international freight and two documents for domestic freight from the paper trail, the direct savings from paperwork and manpower elimination will amount to around US$58.6 million per annum. Indirect savings from reduced transit time and buffer stock are predicted to be around $586 million.
But for such a platform to be effective all stakeholders must be committed to it, or as Charles Kaufmann, chief executive officer, North Asia and senior vice- president, air freight, North Asia Pacific, DHL Global Forwarding, told Cargonews Asia, "With the chain of events included in e-freight, all parties involved from forwarders, handling agents, Customs to airlines need to work closely together. As soon as there is one of them not committed to e-freight, there will be a disruption and a loss of efficiency and failures."
Asked to compare the process of implementing e-freight in China with other countries, Smith said, "In other locations, we typically close off the critical gaps identified from our initial assessments before embarking on implementation.
"In China, we began working with the Chinese stakeholders rather than waiting for all gaps to be closed. We took this different approach as the Customs was implementing a new system. We felt that partnering Customs in the process rather than working with them after completion of a new system was the right approach in this case."
By Saul Symonds
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US retail container traffic expected to rise in May | |
May 18, 2010 - Import cargo volume at the US's major retail container ports is expected to be up 10 percent in May with double-digit increases expected into this fall as the American economy improves, Canada Business News Network reported.
"Consumers are feeling better about the economy and retailers are building up their inventories to meet that demand," National Retail Federation (NRF) vice-president for supply chain and customs policy Jonathan Gold said.
"It's easy to show an increase after last year's downturn, but these numbers show us that retailers are confident their sales are going to go up this summer and give us an early hint of optimism about the fall as well."
US ports handled 1.07 million TEUs in March, the latest month for which actual numbers are available. That was up seven percent from February, traditionally the slowest month of the year, and up 12 percent from March 2009. It was also the fourth month in a row to show a year-over-year improvement after December broke a 28-month streak of year-over-year monthly declines.
April was estimated at 1.11 million TEUs, a 12 percent increase over last year as spring products headed for store shelves. May is forecast at 1.14 million TEUs, up 10 percent from last year; June at 1.19 million TEUs, up 17 percent; July at 1.25 million TEUs, up 13 percent; August at 1.32 million TEUs, up 14 percent; and September at 1.35 million TEUs, up 19 percent. The large year-over-year percent increases are partly due to easy comparisons against unusually low numbers last year.
The first half of 2010 is expected to total 6.6 million TEUs, up 12 percent. Imports for 2009 totalled 12.7 million TEUs, down 17 percent from 2008's 15.2 million TEUs and the lowest since the 12.5 million TEUs reported in 2003.
Cargonews Asia
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| Tianjin port on target to become shipping hub | |
May 17, 2010 - The Beijing administration is to inject around US$13 billion into Tianjin port facilities in the next five years as part of its ambition to turn the northern Chinese port into an international shipping hub not only for Northeast Asia but serving Central and West Asia as well.
The Binhai New Area of Tianjin is working on deepening water channels to accommodate vessels of 300,000-tonnage, building exclusive mineral ore wharves and crude oil berths for such vessels as well as expanding container berths, said Yang Zhenjiang, director of the development and reform commission of Binhai New Area. The commission will also look into building up auxiliary services, such as ship financing.
"By 2015, Tianjin general cargo is projected to exceed 550 million tonnes and container throughput, 17 million tonnes," Yang said. Average annual growth of around 34 million tonnes for general cargo and two million TEUs for containers is forecast.
Last year, Tianjin ranked third in China in general cargo and sixth in container traffic. It ended the year at 381 million tonnes for general cargo, up 6.7 percent over the previous year ago despite the financial crisis, and 8.7 million TEUs, a rise of 2.4 percent.
This year Tianjin could expect at least a 7.7 percent rise in container volume, according to Yang Xin, an industry analyst with Zhongjin Co. The port's operation in the first quarter of the year has been impressive for containers and general cargo despite a fall in iron ore volumes.
Yu Rumin, president of Tianjin Port Group Corp, attributed the area's growth to the continuation of building of infrastructure during the financial crisis. The Binhai New Area is expected to become the third wave of economic growth in China after the Special Economic Zone in Guangdong province and Pudong New Area in Shanghai.
The Binhai area was formed with the merging of three former districts of Tianjin, which took three years before its completion in January 2010.
Upgrading the core functions of the planned shipping centre will be the focus of future efforts by the adminsitration. Apart from establishing a free trade zone at Dongjiang Port Zone by 2012, the administration will speed up construction of berths, building of logistics services to international standards and streamlining auxiliary services such as ship financing and the legal system, said Yang Zhenjiang.
He predicted once the upgrading of Tianjin into a shipping hub is completed, the shipping and related industries could generate about $30 billion in added value.
The Dongjiang Free Trade Zone, covering 10 sq km, will focus on transhipment, distribution, procurement, trading and processing of goods.
The government has established a special fund for accelerating the construction of the shipping centre. It is pooling financial resources from large companies to fund the port facilities.
Last month, construction got underway for the building of petrochemical berths capable of handling five million tonnes at Nanjiang port with financial support from China Petrochemical Group. The Nanjiang port area is expected to become northern China's largest petrochemical storage and distribution centre, said Yang Zhenjiang.
"We welcome cooperation on port construction from all over the world," he said.
Other projects include streamlining the road and railway network, setting up a shipping data platform and expanding warehouses.
According to the plan, the road network will snake its way from other provinces to end at the Binhai New Area with freight being given priority over passengers and the rail freight transport will extend to the hinterland across the Xinjiang Uygur autonomous region to Central and West Asia.
The information platform will be improved for shipping with the focus on vessel trading and trading of other bulk goods such as automobiles and aeroplanes.
Last month, the Dongjiang International Shipping Tran-sactions Market held a signing ceremony for doubling of the area at its warehouses in Haitian Logistics Park to 11,000 sq m.
Work has been continuing non-stop at the New Binhai Area to make the adminstration's dream of making Tianjin a super shipping hub come true.
By Susan Geng
Cargonews Asia
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South African Transnet strike may end on Thursday | |
May 19, 2010 - South African transport unions have reached a proposed wage deal with logistics group Transnet, which if accepted by members will end a strike that paralysed rail and port traffic, an official said on Wednesday.
The strike, now in its second week, has dented exports of metals, fruit and wine to Europe and Asia and hit imports of automotive parts and supplies of fuel. Two-thirds of Transnet's workforce have been on strike since Monday last week.
"We firmly believe that this agreement will be signed (on Thursday) afternoon ... Friday is the earliest we could get back at work," Chris de Vos, the general secretary of the United Transport and Allied Trade Union told Reuters.
"There is a draft settlement signed by Transnet already," he said after the parties met all night to hammer out a new deal.
Utatu and the South African Transport and Allied Workers Union (Satawu), both of which represent 85% of the logistic group's 54 000 workers, said their members could resume work as early as Friday if the deal is signed on Thursday.
Neither party could provide details of the new deal, but Transnet said it was initiating plans to clear a backlog of goods and containers at ports and other depots countrywide.
The industrial action is the latest protest in the country ahead of next month's soccer World Cup, and FIFA said imports of some equipment for the event have been affected.
Economists have estimated losses in the hundreds of millions of rand, but this may rise to billions if the strike drags on.
The strike has forced mining firms, including the South African unit of the world's top steelmaker ArcelorMittal, Anglo American Plc's iron ore unit and Xstrata's ferrochrome unit to declare force majeure, which said they could not supply their customers.
So far coal exports to power plants in Europe and Asia have not been affected, with sufficient stocks at the port.
Traders said coal stockpiles at the Richards Bay Coal Terminal, the world's biggest coal export route, stood at 4-million tons and were enough for another two weeks.
Analysts said they expect a resolution this week because of pressure from government and industry and given the fact that most of the striking workers would continue to lose money if they stay away from work any longer. Workers are participating in the strike under the 'no work no pay' policy.
De Vos said a deal to end a separate commuter rail services strike by the two unions could be signed later on Wednesday. The strike has affected about two million travellers since Monday.
BACKLOG
Even if the striking Transnet workers return to work on Friday, it may take weeks to clear the backlog at the ports.
With nearly two-thirds of Transnet's workers on strike, the container sector has been hardest hit so far, officials said.
Car manufacturers were struggling to get parts and to export their cars, and deliveries of fuel to depots have slowed down.
"If the strike is prolonged... people will start getting into a panic-buying mode we saw in 2005 (during a fuel shortage) ... when people ran to service stations and started filling up in great numbers because they thought they would run out of fuel," Maurice Radebe, chairman of the South African Petroleum Industry Association, told parliament.
Reuters
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| New volcanic ash flight rules bring hope to European airlines |
Planes can now fly in thicker ash, but must obtain engine guarantee
May 19, 2010 - LONDON - In a bid to keep the skies open for business, British aviation regulators introduced relaxed flight safety rules yesterday that will allow planes to fly in thicker volcanic ash than was previously permitted.
The new area - called a "Time-Limited Zone" - comes after ash from Iceland's Eyjafjallajokull volcano shut down much of Europe's airspace for a week last month and disrupted some 1,000 flights on Monday.
Airlines, which have lost millions of dollars due to the ash alerts, have expressed their fury with what they viewed as unnecessary restrictions introduced by overcautious safety watchdogs.
In announcing the new measures, the Civil Aviation Authority (CAA) said: "Aircraft and engine manufacturers ... have agreed that it is safe to allow operations in the new zone for a limited time."
British air traffic control company Nats said the new rules meant that restrictions on British airspace could now be eased. "As a result of this change, there are no predicted restrictions on United Kingdom airspace in the immediate future," chief executive officer Richard Deakin said.
To operate in the new zone, airlines must get a guarantee from their engine-makers that their aircraft can safely tolerate the ash, said the CAA. This had already been achieved by British airline Flybe, and other airlines are expected to follow soon.
British Airways chief executive Willie Walsh led the attack on Monday's flight restrictions, labelling them "a gross over-reaction to a very minor risk".
London's Heathrow and Gatwick airports and Amsterdam's Schiphol Airport - some of Europe's biggest air travel hubs - reopened on Monday after they closed because of volcanic ash worries.
Airspace over the North Sea, however, was still restricted, affecting some helicopter operations.
Today Online
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| Screening Safety at the Border |
For consumer goods shippers, the Consumer Product Safety Commission is a growing regulatory force at the border
May 17, 2010 - When Congress gave the Consumer Product Safety Commission new authority and responsibility over children's products in 2008 following widespread reports of tainted imports, the agency seemed to retreat from public view. After going through the rule-making to meet the congressional mandate, and putting some regulations on hold because it had not established a network of laboratories for testing products, the agency is coming into full view of importers right at the border.
"Quite frankly, the (Consumer Product Safety Improvement Act) was a little bit too much for the trade community and the regulators to handle all at one time," said Erik Smithweiss, a trade attorney with Grunfeld, Desiderio, Lebowitz, Silverman and Klestadt firm in Los Angeles.
"They are rolling it out gradually because the trade community and the CPSC are trying to establish clear, bright-line standards that people can follow before the CPSC imposes very significant and costly compliance requirements. Personally, I think the agency is doing a nice job."
The CPSC today is stationing its expanded inspection force alongside Customs and Border Protection officers at ports. Last month, Customs gave the CPSC access to Importer Security Filing data, which gives CPSC inspectors sharper tools to identify cargo that may violate the law.
And the agency soon will begin to issue its own orders to detain cargo for inspection, something Customs has done until now.
Congress passed the CPSIA as U.S. companies were hit with a number of large-scale product recalls for defects ranging from lead paint on toys to tainted pet food. With companies under fire for not properly overseeing the manufacture of goods overseas, particularly in China, the act was one of several Congress passed to give the government greater oversight for imports.
The result is raising concerns for shippers who say import compliance and product oversight are not naturally aligned.
"We don't know what's going to happen with the pairing of Customs with CPSC. It's certainly cause for concern, but it's not because we're going to be caught harming anyone. They're no longer concerned about whether or not compliance with rules is making people safer, just are you complying with the rules," said Rick Woldenberg, chairman of Learning Resources of Vernon Hills, Ill., a family owned business that sells specialized educational toys and games.
Woldenberg vigorously opposed the CPSIA at its creation and formed a coalition to reform the law. He recently testified before a congressional committee in favor of amending the law to make it less damaging to small and midsize businesses.
"In 25 years, we've recalled 130 units - not products, units - and we got them all back. I estimate we've produced about 1 billion units in that time. I can't improve on that, but my compliance costs have gone up 25 times," Woldenberg said. The company's quality control staff has quadrupled, and Learning Resources has had to retain an attorney just for product-safety issues.
"All of the money we have spent to comply with this law has had no impact on the safety of our products. Our product was safe to begin with," Woldenberg said.
He said the law doesn't give him any benefit for exercising firm hold of his supply chain. Such control is key to weathering the regulatory storm, however, according to Smithweiss.
"The importers aren't making the product, but they're the ones who suffer the consequences of noncompliance," he said. "That's why it's important to have the right structure, the right people and the right business partners to manage their supply chain."
Smithweiss said the good news is most non-U.S. manufacturers recognize there's a business advantage in complying with U.S. product safety rules. "They have a commitment to the U.S. market, and there are stringent requirements in the European Community and other places around the world." Still importers must be wary of suppliers that cut corners.
"The challenge for the small and midsize importers is how to deal with the possibility that the supplier is taking a shortcut, and this is the shipment that the government sends to the lab for testing," Smithweiss said.
He said Customs is intensifying its crackdown on intellectual property rights violations, and the enforcement spills over to product safety, because manufacturers are applying counterfeit certification marks from standards organizations such as Underwriters Laboratories, the Canadian Standards Association or the European Union's CE mark.
"The certification marks are a representation that the product has adhered to the certifying body's standards, and passed all their tests," Smithweiss said. "When Customs sees a counterfeit mark on a product, they view it as a potential product safety hazard." .
Journal of Commerce
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