AAFA Weekly Brief
December 20, 2016
Supply Chain
December 19: Contrary to the downtrend in costs this year, ocean freight rates for major East-West trade routes are up and rising. Average Transpacific and Asia-Europe freight rates increased 3 percent in the latest quarter after falling for six quarters straight, according to the Drewry Benchmarking Club Contract Rate Index. ... Shipping rates are going to go up even despite the over-capacity issues plaguing the sector—and that over-capacity is expected to be even more severe in 2017. As Drewry noted, higher fuel prices, the previously unsustainable rate levels and the Hanjin bankruptcy upset are weighing heavily on pricing. (Source: Sourcing Journal - article unlocked)
December 15: The Federal Maritime Commission in the US has now approved the creation of new container grouping THE Alliance after the five members changed some of the language of their founding set-up. THE Alliance brings together Hapag-Lloyd, K Line, MOL, NYK, and Yang Ming. (Source: Splash24/7)
December 12: The U.S. Supreme Court on [December 12] let stand a Colorado law that pressures online retailers to collect sales tax — a decision that could motivate other states to pass their own "Amazon tax" measures. The high court announced in its latest order list that it won’t hear a challenge to a February ruling by the 10th U.S. Circuit Court of Appeals, which sided with Colorado in a lawsuit from industry. In doing so, the Supreme Court affirmed a Colorado law that compels out-of-state companies to collect sales tax from residents who make Internet purchases — and one that got its nickname from the online giant Amazon.com. (Source: Denver Post)
Milgram Freight Services
December 16: As lawmakers set out to implement one of the broadest reforms to the tax code in decades, one proposal has companies gearing up for a rebellion against politicians they traditionally view as close, pro-business allies. Republicans in the House of Representatives and President-elect Donald Trump seem prepared to deal a blow to import-dependent companies with taxes aimed at penalizing them for not buying "Made in America" goods. ... "The apparel and footwear industry has been global for more than a generation and is reliant on global supply chains to provide the products that American consumers want to buy," Stephen Lamar, executive vice-president of the American Apparel and Footwear Association, told Salon by email. "This change to the tax code would have an outsized adverse impact on our industry, so it is something we are taking very seriously." (Source: Salon)
December 16: ... While Trump has floated several ideas for how he’s going to reverse the U.S. trade deficit — from renegotiating NAFTA to imposing double-digit tariffs on goods from such countries as China and Mexico — there’s been little in the way of details. ... "There’s absolutely no reason why a U.S. company should be trying to figure out how to move their headquarters to the Bahamas or Canada or some other country ... The way to solve that issue is not to punish people for doing it, but to fix the economic environment so nobody wants or needs to do it ..." [says Mark Vitner, Wells Fargo senior economist] (Source: Charlotte Business Journal)
December 16: House Ways and Means Committee Chair Kevin Brady (R-TX) talked about Republicans' plans for tax reform and the repeal and replacement of the Affordable Care Act. Ways and Means Committee members returned to Washington during the past week to work on these issues. Topics included working with the Trump team. (Source: C-SPAN)
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Brand Protection
December 17: Amazon.com of the U.S., China's Alibaba Group Holding and other online sales portals are stepping up efforts to eliminate counterfeit products on their platforms. Amazon has enlisted the help of makers who sell their products via its sites to identify counterfeits. It has started to sue malicious merchants. And in October, the company banned reviews from some writers who are enticed with free products. The company plans to set up a new division dedicated to combating counterfeits. (Source: Nikkei Asian Review)
December 16: Chinese online marketplace behemoth Alibaba – in collaboration with law enforcement agency partners – has revealed the results on its latest crackdown on offline counterfeiting operations. Leveraging the big data technology that Alibaba has at its fingertips, the figures appear to be impressive – with 417 counterfeit product rackets halted and 332 suspects arrested – but brand owners will be weary of rejoicing until they see tangible results for themselves. The 2016 ‘Operation Cloud Sword’ was undertaken between April and July as a joint initiative between Alibaba Group and the Zhejiang Office on the Fight against IPR Infringement and Counterfeiting. (Source: World Trademark Review)
Naylor Association Solutions

In Brief
What do the border adjustability tax proposals mean for you? In case you missed it, AAFA’s December 14 member-only webinar with Mayer Brown and AAFA is now available here (member login required). The webinar explained an overhaul of the U.S. tax code as one of the first items of business in the coming year and what the genesis of border adjustability means for your business.

Taking part in AAFA webinars: This month, AAFA hosted three open-industry webinars highlighting key issues in the industry:

"Counterfeiters on the Rise – Challenges and Best Practices" with MarkMonitor, Part of Clarivate Analytics

"Supply Chain Slavery Threats and Trends" with BSI Supply Chain Services and Solutions

"CSR with WRAP - A New Approach to Working Hours"

All three recordings are now available here. For more information about all of our webinars, visit the AAFA Calendar of Events or Webinar Learning Center. Contact Megan Balkovic to discuss webinar sponsorship in 2017 and beyond.

Updates from AAFA’s Government Contracts Committee: AAFA’s Government Contracts Committee (GCC) keeps members apprised of developments that bear on the needs and requirements of the U.S. military and other parts of the U.S. government with respect to the procurement of clothing and shoes. AAFA will soon begin sending weekly alerts advising of domestic sourcing opportunities. If you’re looking to increase your U.S. manufacturing footprint, this will provide you a regular way to identify U.S.-based production capabilities. If you’re looking for more business for your U.S. manufacturing facilities, this service will link you up with individuals in our industry looking to find such business. To discuss how you can plug in to this exciting new opportunity, please contact Steve Lamar. More information will follow in the new year! Be sure to register for the next GCC Meeting, May 9 – 10, in Natick, MA. 

See all of AAFA’s latest letters, comments, and testimony here.

Congress and government agencies solicit comments on a range of issues that may affect your business – find a list of comment opportunities here.

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AAFA Events
January & February
Jan. 24 What’s on Your Customers’ Shelf? The Latest on Compliance and Restricted Chemicals
Feb. 8 Environmental Committee Meeting
Feb. 9 Social Responsibility Meeting
Feb. 28 Executive Committee & Board of Directors Meeting

Be sure to register today for AAFA's Executive Summit: March 1-3, 2017 in Washington, D.C. Rooms at The Watergate Hotel are filling up!

Visit our events calendar for all AAFA webinars and industry events. 

AAFA Members: Join us for a conversation with AAFA Board Leadership on January 12!

Pictured: Rob DeMartini, AAFA Chairman
Paula Zusi, AAFA Vice Chairman

Other Industry Events
January 25-26, 2017 | Orlando, FL
Each year, the PGA Merchandise Show gathers 40,000+ industry leaders representing 74 countries for its premier golf merchandise show. This year, complimentary education conference sessions will be held Jan. 25-26 and will cover numerous topics that will play a role in sourcing next year, including the recent U.S. presidential election, labor concerns, the activewear market, new sourcing strategies, and wearable technology. AAFA President and CEO Rick Helfenbein will present a special keynote, "Sourcing Merchandise in the New Political Environment."


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