May 18, 2016 4:00 PM, EDT

US Political Climate Threat to Global Supply Chain, Logistics Execs Say

Luke Sharett/Bloomberg News

WASHINGTON — Protectionism has become a political issue that is a threat to an efficient global supply chain, world trade and the critical importance of making the Trans Pacific Partnership trade agreement a reality, a top UPS Inc. official said.

Speaking at the 2016 Global Supply Chain Summit here, Senior Vice President Mark Wallace, spoke out against critics of the TPP agreement that is meant to facilitate trade between the Americas and Asia, saying “attacking trade deals is more popular than kissing babies” in an election year with politicians he didn’t name.

“When it comes to laying blame for lost jobs, rhetoric is high and reason is absent,” he said.


Finding a way to get the agreement ratified by Congress will result in eliminating thousands of barriers, enabling faster movement of goods through the supply chain and the elimination of what he called “Customs clutter.”

Approval of TPP, supported by UPS and other logistics companies, will make the U.S. a more active participant in the world’s fastest growing economies, said the UPS official, whose career included serving as president of UPS’ Supply Chain Solutions unit.

UPS ranks No. 1 on the Transport Topics Top 100 list of the largest U.S. and Canadian for-hire carriers. 

“The argument for the transformative power of global trade is strong”, Wallace said, citing facts such as international commerce that brought 1 billion people worldwide out of poverty and the fact that 38% of U.S. jobs depend on trade.

He also acknowledged the difficulty of making the case for trade when an individual loses his or her job, while urging TPP’s backer to be both visible and vocal.

“TPP is fast approaching the finish line,” Wallace said. “There are still obstacles in our path. The stakes are rising, the misinformation is growing and the clock is ticking.”

Several other speakers at the Infrastructure Week event sponsored by the U.S. Chamber of Commerce focused on related aspects of the supply chain’s importance.

Stanley Selig, undersecretary of international trade at the Department of Commerce, said last year’s West Coast port delays during protracted labor negotiations illustrated the supply chain’s importance, saying it is “a bridge to help our country maintain our strategic leadership and a bridge to continue our commercial leadership”.

Selig also cited the importance of addressing challenges faced by ports in the course of business, such as the arrival of megaships that tax the terminal and road networks and the problems created when there are not efficient handoffs of freight between sea and land carriers.

“A lot of us are taking the border into account when evaluating supply chains because those border issues add a greater level of complexity,” said Stephen Preston, CEO of Livingston International. “Companies are looking for reliability and trust and the lowest amount of friction possible. If a company’s reputation is damaged with border officials that makes crossing more difficult.”

Boeing Co. Director of Supply Chain Logistics said that the growing focus on ever-faster delivery of the company’s airplane parts and international commerce has magnified the importance of efficient processing of goods moving through the supply chain, since more than half of its products are sold overseas.

John Carlin, assistant attorney general for national security at the Department of Justice illustrated the importance of assessing Internet threats. He related the issue to transportation by citing a recall of 1.4 million Jeep Cherokees.

The recall was needed to repair flaws in its entertainment system, which could be hacked through the Internet. Carlin said that without carefully assessing third party vendors who supply equipment, vehicle makers could find themselves dealing with Internet attacks that “jump over” from the entertainment system to systems that control the vehicles’ movement.