For
Immediate Release
Fort
Erie, Ontario - March 14, 2003 -
As discussions at the United Nations
Security Council seem to be reaching
a climax, businesses are increasingly
concerned about the possible effects
of war or terrorist threats on border
operations and on their international
supply chain. PBB Global Logistics,
a leading provider of third party logistics
services and international trade consulting,
offers the following analysis and advice
to help shippers prepare contingency
plans.
"No
one can say exactly what measures the U.S.
and Canadian governments will take at the border,
if and when a war breaks out in Iraq," says
Mike Scott, President & CEO., PBB Global
Logistics. "While our expectation is that
the borders will not close, we can't rule it
out either. Regardless of what happens, shippers
should be examining their supply chain, considering
potential vulnerabilities and making contingency
plans."
Expect
Delays at the Border
Delays at land crossings, airports and seaports
may be inevitable, especially at the outset of
hostilities. Increased inspections and a temporary
suspension of expedited release programs are
possible. New 24-hour advance reporting regulations
facing ocean freight may be subject to tougher
enforcement, increasing the potential for delays
at origin.
Reposition
Inventory Strategically - "Just-in-Case"
Manufacturers using Just-in-Time production methods
should consider maintaining a safety stock of
product, parts and raw materials at strategic
locations, which can be drawn upon in the event
of excessive delays at the border. Essentially,
this represents a shift from strict Just-in-Time
manufacturing to a "Just-in-Case" approach.
Get
on Board with C-TPAT/PIP
U.S. Customs' C-TPAT program (Customs-Trade Partnership
Against Terrorism) and Canada's counterpart,
Partnership in Protection (PIP), are voluntary
programs developed to help Customs identify low-risk
shippers from a supply chain security perspective.
In addition to benefiting from faster release
and reduced inspections during normal conditions,
participants will likely be given priority when
the border reopens after a possible shutdown,
helping mitigate some of the costly delays that
would otherwise apply.
Re-evaluate
Contractual Commitments
If possible, reconsider any performance or delivery
guarantees to protect your company from penalties
caused by extraordinary events out of your control.
Likewise, take current events into account when
entering into new contractual arrangements.
Account
for Increased Logistics Costs
Border delays increase operational costs for
carriers in all modes, which are often passed
along to shippers in the form of surcharges.
Furthermore, assets detained or delayed at the
border reduce the availability of freight space
on the market, putting upward pressure on rates.
Finally, increased insurance premiums represent
another area for potential cost increases.
"Contingency
planning can involve any or all of these considerations," says
Mr. Scott. "The important thing is for
businesses to be aware of the potential impact
of war on their supply chain and cross border
trade and prepare accordingly. By doing this,
North American businesses can prevent many
of the disruptions experienced after September
11, when everyone was caught by surprise by
heightened border security."
PBB's
own contingency planning incorporates many
of the aspects outlined above. In addition,
the company plans to offer customers regular
e-mail updates, local border information from
its network of offices along the Canadian-U.S.
border and a 24/7-customer hotline to handle
inquiries.
PBB
Global Logistics is a leading provider
of third party international logistics
services, facilitating the movement of
goods across North America and around the
world. Founded in 1946, PBB has expanded
its core Customs brokerage and freight
operations and now provides supply chain
solutions from the point of origin of goods
to the point of consumption. With approximately
900 employees in over 70 strategic locations
throughout North America and an established
global network of logistics service providers,
PBB has the technology, expertise, and
infrastructure to meet every supply chain
need. PBB Global Logistics is a wholly
owned subsidiary of PBB Global Logistics
Income Fund with units trading on the Toronto
Stock Exchange under the symbol PBB.UN.
For
more information contact:
1-800-924-4466 ext. 3634
info@pbb.com
www.pbb.com
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