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Valley Stream Shipping Company Prez Talks Delays in International Importing

shipping
Salvatore J. Stile

Consumers increasingly receive goods from around the globe. Alba Wheels Up International, an international freight forwarder and customs broker, specializes in bringing items into the United States. We talked with Salvatore J. Stile, president and chairman of the Valley Stream-based company which has more than $300 million in annual sales and about 200 employees, about importing in an increasingly international world.

What does your company do?

My company is an international freight forwarder and U.S. Customs broker. They work in tandem with each other. One service is bringing goods into the United States or exporting out of the United States via ocean or air freight. Customs clearance is guiding clients through the proper Customs rules and regulations. We also deal with other government agencies such as the FDA and EPA. We make sure we assess the proper duties and tariffs. There are over 25,000 tariff codes that apply to products coming into the United States.

What type of commodities do you handle?

We bring billions of dollars of goods to the United States ranging from apparel to footwear and accessories to electronics and food items. The most common would be apparel-related and consumer products. The most uncommon? We cleared the 911 monument in Bayonne, N.J., called Teardrop, given as a gift from the Russian government and a famous Russian sculptor. Many years ago, we exported 70,000 pounds of custom silver made of sterling from a company in Brooklyn that made it for the Saudi royal family wedding.

What countries do you deal with most and what are the biggest issues?

Asia and the Indian subcontinent. I would say now the biggest issues are the additional tariffs, the 301 tariffs more commonly referred to as the Trump tariffs. If a duty would be 10% from other countries, there would be an additional tariff ranging from 7.5 to 25% from China.

What’s the extent and primary cause for delays now?

Probably about 50 to 60 days. Something that would take from door to shelf in ocean in 30 days now takes close to 80. Factories have been shut down. There were allotments for electricity where they worked at 60 percent capacity. Steamship lines may schedule six ships to LA, but only send four. The LA ports are like a clogged drain. There’s been a lot of blank sailings where steamship lines don’t send vessels, because they either don’t have enough commitment to fill them or they want to keep the ocean freight rates at a stabilized level.

What other things cause delays?

There are equipment and personnel shortages. There is a shortage of chassis, the wheels that a container is put on that connects to a truck. A lot of people aren’t returning the chassis in time. They’re not manufacturing them as quickly as possible. Another reason for delays is, the terminal yard is so packed, it’s hard to maneuver in the terminal.

Has anything specific been happening in China lately leading to delays?

They had the Golden Week holiday in October. It’s a national holiday, so they shut down. There were fewer shipments coming out of China.

What does it take to survive as a logistics freight forwarder today?

Capital. Best in class technology. You have to be an advocate for your clients to come up with solutions outside of normal processes. And as a Customs broker, you have to understand how available rules and regulations can be beneficial to your clients.

Can you give examples?

We’re strong in the Section 321 program, a direct-to-consumer program. If you’re an importer and know who your client is before goods ship from the country of export, if the eligible merchandise is under $800 in value, there’s no duty on the product. If you bring in a container of women’s knitted blouses from China, the total tariffs and duty would be $29,000 or $30,000. If you utilize the section 321 program, effectively, it would be zero.

Is that something new?

It’s been around for several years. It used to be a $200 limit, but it was raised to $800. Not only is it duty free, after you pick up the container from the port, you can drop it into your domestic supply chain. You don’t have to go to your distribution center.

What has your company done to help clients get through these difficult times?

We’ve helped finance them with credit terms, because freight is five times more than it used to be. They rely on us for financial support and speed to market. We get goods delivered to market quicker than a lot of our competitors. We do that by planning shipments from export with technology, so we can anticipate what trucks are needed, reserve space, pick up goods at the terminal and clear goods before they arrive at the port.

What do you foresee in the next year as the impact on the import community?

I see trouble ahead, not only for the import community, but the consumer. I see rates staying high. I see the lending community going to pull back on advances to importers. They’re concerned. This can’t be an ongoing situation. A lot of importers haven’t been passing on higher rates to retailers. You could see another 5 to 10% bump in consumer goods prices.

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