o succeed in the global marketplace, companies that offer international shipping services must contend with a variety of challenges, ranging from the type of transportation available and finding direct service routes to a changing—and often confusing—political climate. Whether importing or exporting goods, international shipping companies possess extreme flexibility in order to succeed in an ever-shifting marketplace.

According to the US Department of Commerce’s Bureau of Economic Analysis (BEA), international imports to Alaska are driven by refined fuels, followed by machinery and industrial equipment. In 2017, manufactured commodities made up roughly 86 percent of all imports to the state.

Beau Rogers, international key account manager for TransGroup Global Logistics, says that most of the products that his company imports from other countries include items used by the maritime industry (cranes, winches, and cable) and by the mining industry (mining dredges and loaders). “We also import materials for the cruise line industry, including ship spares and perishables,” he adds.

TransGroup Global Logistics is a mid-sized to large freight forwarder with more than ninety offices and an agent database of 150-plus offices worldwide.

“Asia is a big market for us on the import side, with Europe coming in second, followed by the Scandinavian countries,” he says of products that make their way into Alaska as well as to destinations in the Lower 48. “We ship everything from nonhazardous chemicals to and from Asia, Europe, and South America that kill bacteria and help oxygenate water for marine life to heavy machinery parts and ship spares. One of our larger customers sends rental gear to various cruise lines in the Arctic and to South America, as well.”

In 2018, Alaska shipped $4.8 billion worth of goods around the globe, making it the nation’s 40th largest exporter by state. According to the World’s Top 10 Exports website, while this reflects a 3.4 percent drop in value from 2017, overall, export value has increased 3.3 percent since 2015.

The BEA reports that exported products represent approximately 8.7 percent of the state’s total economic output, worth $54.9 billion. The most exported products by dollar amount in 2018 included $1.2 billion in zinc ores, concentrates; $416 million in frozen fish meat; $356 million in lead ores, concentrates; $322 million in miscellaneous frozen fish; $316 million in frozen Alaska pollock fillets; $203 million in frozen cod; $159 million in frozen Pacific salmon; and $157 million in miscellaneous petroleum oils.

Lynden—one of the state’s most dynamic shipping and logistics organizations—offers services that include scheduled and chartered air freighters, domestic and international forwarding and customs services, and multi-modal logistics.

“One of Alaska’s most exported products is seafood, and Lynden moves salmon, halibut, crab, and other seafood to locations around the world,” says Dennis Mitchell, senior vice president at Lynden International. “The mining and energy industries also have important international shipping components.” 

While the majority of cargo comes into Alaska by ship, smaller volumes of goods may come as air cargo or by truck. According to Rogers, this can depend on the size and weight of the freight and whether they are FCL (full container loads) or LCL (less than container loads). “We also offer breakbulk and roll on/roll off shipping if the cargo is too large for a standard flat rack container and for a lot of larger shipments, and we also have the ability to charter a full aircraft,” he says.

Lynden also utilizes all modes of transportation for international shipments.

“Some items are shipped directly into or out of Alaska, and others are routed through points in the Lower 48,” says Mitchell, adding that Lynden is able to utilize its diverse capabilities to do whatever is needed for the customer. “For example, we could coordinate oversized modules to travel from Europe to Houston by ship, move them from Houston to Seattle by truck, from Seattle to Anchorage by barge, and then again by truck to their final destination in Prudhoe Bay.”

One of the biggest problems facing international shippers is being able to find a direct route for goods to travel.

“There are only a couple of airlines that directly serve Ted Stevens Anchorage International Airport, which means that goods have to be routed through Seattle and then transferred via Alaska Airlines or put on a barge,” says Rogers, adding that TransGroup Global runs a consolidated container weekly from Seattle to Anchorage.

“Because there isn’t very much direct routing into Alaska, we have to transfer goods through Vancouver, Prince Rupert, or Seattle, which makes it more complex,” he continues. “I recently attended a seminar in Anchorage by the president of Ted Stevens Airport that focused on how to bring more cargo carriers into the airport to offer more direct lanes; that would really be an advantage.”

Another challenge facing international shippers is the fact that the current political climate—and President Donald Trump’s tariffs—is creating a lot of confusion in the industry.

“There have been a lot of changes, so we’ve had a number of customers come to us asking about alternatives or solutions to shipping directly to the United States,” says Rogers. “A lot of them don’t know if their products are affected so they reach out to us.

“I have an extensive background on the US customs side, so even if I don’t immediately know what products are affected, I can work directly with our team of brokers to find out. Some of them also send us direct updates of what products the tariffs will affect,” says Rogers of navigating the tariff situation.

One of the advantages to shipping items through Alaska-based companies is that they often have more routing options than shippers in the Lower 48.

“Because we are located where we are, we can route freight into Canada and then bring it across,” says Rogers, adding that TransGroup Global is seeing an increase in cross-border clearances. “It doesn’t necessarily change the country of origin, or altogether avoid additional duties, but it does give us additional routing options. It’s a big bonus being located where we are geographically.”

As a result of the tariffs, Rogers says that the company has noticed a change in the way importers do business.

“The volume of shipments per month has decreased, but customers are bringing in larger orders,” he explains. “Prior to the additional tariffs, companies would often break up shipments and bring in three or four shipments a month. Now they may only bring in one to two shipments a month, but each holds an increased amount of product. This consolidation helps save them money on shipping costs and any potential additional tariffs.”

He gives the example of a client who imports infrared saunas to the West Coast. “Once the tariff was implemented, he went from paying a 2.6 percent duty to a 2.6 percent duty plus an additional 25 percent tariff on most of his items and 10 percent on other items,” says Rogers. “So he’s looking at a 27 to 30 percent duty rate increase based on the product.”

He adds that a number of importers are now looking outside of China for their manufacturing needs. “Some of our customers are exploring options in India, Korea, and Vietnam, so that they won’t get hit with the tariffs,” he explains.

In addition to offering shipping and tariff advice, TransGroup Global tries to make it easy for customers to ship or receive orders from overseas. “Our web apps are top-notch; clients can just log into the app on their phones to track shipments or to submit quote requests,” he says, adding that TransGroup has in-house ocean contracts and also works directly with airlines to negotiate rates to increase its buying power.

To stay up to date on the latest shipping regulations, the company’s employees take recurrent TSA training once a year, as well as HAZMAT training every two years on the aviation side and every three years on the ocean side.

“Shipping internationally seems like a very daunting task, but in reality, it’s not,” Rogers says. “ As a full-service 3PL [third-party logistics] provider, we work with businesses to streamline costs and to get their freight where it needs to go.”