IS GLOBAL SHIPPING THREATENED
BY PROTECTIONISM?

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XENETA
At Xeneta we believe there is an untapped
potential for everyone in the industry, to
systematically learn from our individual
and collective efforts. We hold true that "if
you cannot measure it, you cannot improve
it". That’s why we think actionable metrics
is the key to continuously evolve for every
business, and ultimately the entire industry.
Rethinking global logistics is the vision of
Xeneta.
With international experience from the
logistics industry, we have first-hand
knowledge of the challenges related to high
volatility and lack of transparency in the
ocean freight market. By combining
logistics background and information
technology expertise, we found the solution
WE ARE
TRANSFORMING
GLOBAL
LOGISTICS

ARE YOU PAYING THE
RIGHT CONTAINER
FREIGHT RATES?
DISCOVER SAVINGS
POTENTIAL IN REAL
TIME.
CONTACT US.

WHILE PROTECTIONISM IN
TRADE MAY BODE WELL FOR
TRADE ITSELF, DOES THIS
PROTECTIONISM AFFECT OR
THREATEN GLOBAL SHIPPING?

WE ASKED OUR SOCIAL MEDIA
COMMUNITY “DO YOU BELIEVE
GLOBAL SHIPPING IS THREATENED
BY THE RISING PROTECTIONIST
SENTIMENT?”

HERE ARE THE RESULTS AND
ANALYSIS OF PROTECTIONISM.

TAKING PART IN THE SURVEY, VIRGILL
RATLIFF OF EXCELSIOR WORLDWIDE
FREIGHT LOGISTICS AND HARIESH
MANAADIAR OF SHIPPING AND FREIGHT
RESOURCE DO NOT BELIEVE THAT
PROTECTIONISM WILL BE A THREAT TO
THE GLOBAL SHIPPING INDUSTRY

INDUSTRIAL ACTIVITY CLIMBING IN THE
U.S. WITH HEAVY EMPHASIS ON EXPORTS.
U.S. BUSINESS COMMUNITY WILL TEMPER
PRESIDENT TRUMP'S CALL FOR IMPORT
RESTRICTIONS.
Mark Montague from DAT Solutions commented via
Twitter

GUIDE TO OCEAN FREIGHT RATE
TRANSPARENCY
FREE
WEBINAR

HOW DOES PROTECTIONISM
WORK?

INCREASING IMPORT TARIFFS SO THE
IMPORTED GOODS WILL NATURALLY BE
PRICED HIGHER THAN LOCAL GOODS

SUBSIDIZING LOCAL GOODS/SERVICES SO
THE PRICES WILL BE CHEAPER THAN
IMPORTED GOODS OR THE GOVERNMENT
ENTITIES THAT RECEIVE THESE
SUBSIDIES WILL STAY IN BUSINESS

SETTING QUOTAS FOR IMPORTS SO THAT
ONLY A CERTAIN QUANTITY CAN BE
IMPORTED

LOWERING CURRENCY VALUE SO THAT IT
MAKES A RATE OF EXCHANGE
FAVORABLE FOR EXPORTERS BUT
UNFAVORABLE FOR IMPORTERS

THE ANALYSIS |
PROTECTIONISM AND GLOBAL
SHIPPING CORRELATION

IF ONE ANALYZES THE CORRELATION
BETWEEN PROTECTIONISM AND
GLOBAL SHIPPING, ONE CAN SEE THE
REASON WHY THE MAJORITY VOTED
TO SAY THAT PROTECTIONISM WON’T
AFFECT GLOBAL SHIPPING.

MERCHANT MARINE ACT OF 1920 OF
USA COMMONLY KNOWN AS THE
JONES ACT, A FEDERAL LEGISLATION,
IMPOSES FOUR PRIMARY
REQUIREMENTS ON VESSELS
CARRYING GOODS BETWEEN U.S.
PORTS.

OWNED BY U.S. COMPANIES THAT ARE
CONTROLLED BY U.S. CITIZENS WITH AT LEAST 75
PERCENT U.S. PERCENT OWNERSHIP;
AT LEAST 75 PERCENT CREWED BY U.S. CITIZENS;
BUILT (OR REBUILT) IN THE UNITED STATES; AND
REGISTERED IN THE UNITED STATES.

RELATED
READING:
HOW TO GAIN TRANSPARENCY
INTO OCEAN FREIGHT RATES
3 QUESTIONS TO ASK WHEN
NEGOTIATING FREIGHT
CONTRACTS
CLICK TO
READ

LEARN HOW XENETA CAN HELP
YOU GET INSIGHT INTO YOUR
GLOBAL OCEAN FREIGHT PRICES.
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EFFECTS OF PROTECTIONISM

GLOBAL TRADE
FLUCTUATES DUE TO A
VARIETY OF REASONS
SUCH AS
OVERCAPACITY,
INCONSISTENT
FREIGHT RATES AND
OIL PRICES. THERE IS
NO OFFICIAL EVIDENCE
WHICH SUGGESTS
THAT THE COUNTRIES
WITH THE
PROTECTIONIST
POLICIES HAVE LOST
THEIR SHARE OF
GLOBAL SHIPPING.

IN AN UNDATED
ARTICLE, WILLIAM
TURLEY WRITES
THAT:

IN 2011 ALONE, DOMESTIC SHIPPING
GOODS AND SERVICES CONTRIBUTED
$33.6 BILLION IN VALUE-ADDED TAXES,
$21.7 BILLION IN LABOR COMPENSATION,
AND AN ADDITIONAL $9.9 BILLION IN TAX
PAYMENTS TO STATE AND LOCAL
GOVERNMENTS.

AS PER THIS REPORT, THESE COSTS ARE ULTIMATELY
INCORPORATED SOMEWHERE INTO THE COST OF THE GOODS
BEING SHIPPED WHICH COULD END UP HARMING SMALLER
ECONOMIES.
THOSE IN FAVOR, OF COURSE, SUGGEST THE JONES ACT HAS
GUARANTEED U.S. SHIPPERS A MONOPOLY IN THE TRADE
SPACE, THEREBY HELPING THE DOMESTIC COMPANIES HAVE
LITTLE TO NO COMPETITION.
THERE ARE SEVERAL EXAMPLES OF SUCH PROTECTIONISM
WHICH, WHILE PROVIDING SOME TEMPORARY RELIEF TO THE
RECIPIENTS, WILL EVENTUALLY RESULT IN ALLOWING THE
OVERCAPACITY OF TONNAGE TO CONTINUE WHICH MAY KEEP
RATES FROM RISING FURTHER AND THIS IS SOMETHING THAT
WILL NOT END WELL FOR EVERYONE CONCERNED.