This article was originally published on JOC.com on May 5, 2017
By John Bennett, Strategic Client Service Manager, Livingston International
The US International Trade Commission’s imposition of countervailing duties on Canadian softwood lumber entering the US provides a glimpse of how a trade dispute can vastly complicate life for shippers.
For all the coverage the matter has received in the press, little has been said about just how those who actually engage in transactions involving Canadian softwood lumber – producers, buyers, transporters, etc. – should be adapting their processes and operations to this new reality.
While carriers may not be affected to the same degree as importers and exporters, the reality is that each player in the supply chain must do his or her part, or risk creating a domino effect that will adversely impact their own business and those of their supply chain partners. What importers do affects border agents and customs processes, which affects carriers either in the form of lengthy delays at the border that generate additional costs to shippers, or loads being sent back, which results in business disruption.
Surety bonds are one area impacted by this new reality. When goods cross the Can-Am border, the importer must have a surety bond in place to cover the cost of the goods in the event the transaction goes awry. Most US importers of softwood lumber already have these bonds in place, but the countervailing duties being placed on softwood lumber, and the potential for anti-dumping duties in June, could result in the cost of Canadian lumber soaring more than 40 percent.