INTL FREIGHT FORWARDING & NVOCC REVIEW 2006 - Kansas City freight forwarders

By: | at 07:00 PM | Channel(s): Logistics  

Kansas City freight forwarders enjoy Mexican trade relationshipsBy Gene Linn, AJOTFreight forwarders in the logistically important Kansas City area are prospering, and stand to gain even more in coming years, according to two prominent local forwarders. In part, Kansas City forwarders are swept up in the on-going surge of international trade. They are also benefiting from the budding inland port’s unique trade relationship with Mexico. And one of the area’s better-known small to medium-sized forwarders gains by bucking the widespread trend toward consolidation.
The rising tide of global trade is lifting the prospects of freight forwarders in Kansas City. Both Kansas and Missouri exports set records in 2005, according to Roger Scarbrough, CEO of Scarbrough International Ltd. That is good news for Kansas City, which straddles the Missouri-Kansas border and connects to markets in the rest of the Midwest through of highway and railroad networks.
“International trade is expected to grow 10% annually for the next several years,” Scarbrough said, “and Kansas City expects to get all of that and more. Kansas City has always been a national distribution center with its central location and second-largest rail hub in the country.”
Scarbrough International has offices in St. Louis, Chicago and Milwaukee in order to take advantage of what it sees as Kansas City’s position as a natural Midwest transportation hub.
The recent decline in the value of the US dollar helps trade by making American exports cheaper overseas, according to Scarbrough. Also critical are economic developments in China and India. “There’s been a tremendous increase in exports to China,” Scarbrough said. “As more and more people enter the middle class in China, they buy the things that we produce, like computers, processed foods, pharmaceuticals and so forth. They also buy machines to improve their agriculture - such as tractors and combines made in the Midwest. And India is following in the footsteps of China.”
Richard Held told the AJOT that business is “growing by leaps and bounds” at Held and Associates. The company exports manufactured products, with about 80% coming from the nearby four-state area. Both Held and Scarbrough were recommended to the AJOT by Kansas City SmartPort, Inc., a non-profit organization promoting Kansas City’s role as an inland port. Held is a two-time President of the local International Trade Club, and Scarbrough is the President and CEO of United Shipping, Inc., a worldwide network of customs brokers and freight forwarders.
In addition to the weak US dollar, Held said, business is stimulated by free trade agreements. “Most recently, last year the free trade agreement with Australia really perked sales up,” he said. For example, duty free access to Australia and New Zealand opened the market for lawn mowers and other yard and garden care equipment. Sales of lighting components and aviation equipment also gained. In the future, Held said, “We think we’ll see the same type of agreements in South America.”
Kansas City - Mexico connection
While the lower US dollar, implementation of free trade pacts and other developments help foreign trade throughout America, Kansas City forwarders enjoy a unique advantage. That is the increasingly close trade relationship between Kansas City and Mexico. Missouri Gov. Matt Blunt traveled to Mexico in December to meet with President Vicente Fox to promote the link.
Kansas City Southern Railway already connects the city with the Mexican port of Lazaro Cardenas. Hong Kong-based Hutchison Port Holdings is adding infrastructure to handle about two million containers a year, which promises to make the Lazaro Cardenas to Kansas City corridor an option for imports from Asia.
In addition, Mexican and Kansas City authorities hope to open the first Mexican Customs facility in the US in Kansas City in May. US Customs and Border Protection Commissioner Robert Bonner has called the plan for the facility, “bold and imaginative” and said it could make Kansas

American Journal of Transportation