Outdoor Retailer Education Session: Ask OIA Anything On Trade

OIA’s international trade program is dedicated to promoting a stable and predictable trade environment for outdoor businesses of all sizes, from domestic manufacturers to those that utilize global value chains to bring product to market. Members of OIA’s Trade Advisory Council (OIATAC) meet regularly to provide advice and guidance on new initiatives to help the bottom line of outdoor companies and to collaborate and exchange new ideas and best practices as they navigate tariffs, supply-chain disruptions, shipping costs and other challenges to their businesses. Watch our presentation from Outdoor Retailer Snow Show 2022 to learn from OIA’s outside trade counsels from Sorini Samet & Associates and members of OIATAC on the latest federal trade updates, challenges to outdoor supply chains and how OIA members are responding.

Moderator: Richard W. Harper, Jr., Director of Government Affairs, Outdoor Industry Association 

Panelists: 

Ron Sorini, Principal, Sorini, Samet & Associates, LLC

Ben Christensen, Vice President of Operations, Simms Fishing Products 

Sara Bowersox, Senior Manager of Global Trade Compliance, Keen Footwear

 

Takeaways from the session include:

  • There is broad, bi-partisan support for getting even tougher on China with regard to trade. Punitive tariffs are likely to remain in place for some time.
  • While Congress and the administration focused on domestic priorities in 2021, there’s a chance we’ll see movement on some outstanding trade items early in 2022, like renewing the Generalized System of Preferences (GSP) and a package of miscellaneous tariff bills.
  • Outdoor companies are dealing with unprecedented challenges in bringing products to market, from high freight costs to congestion at US ports. Work on addressing these issues has gone up considerably. Some have found success in broadening partners in freight and logistics, adding more options.
  • Looking at the year ahead, outdoor companies are looking for any opportunity to help with their bottom line, from leveraging any duty savings, streamlining supply chains to developing multiple vendor relationships.

Audio Outdoorist: 2021 International Shipping Crisis

This is the second in our series about international trade and trade policy. In this episode, our director of government affairs Rich Harper and three members of our Trade Advisory Council, discuss the recent precipitous rise in shipping costs, which, on top of punitive tariffs, trade wars and the global pandemic, have made it difficult for our member companies to remain nimble and competitive. Recently, OIA sent a letter to the White House, calling on this administration to invite all stakeholders to the table to identify immediate solutions to the crisis and to enforce all existing regulations. In addition, we’re calling for support on legislation recently introduced in Congress to help alleviate the issues. To learn more about OIA’s advocacy work, to sign up for our trade alerts and to get involved in legislation to help outdoor companies address this crisis, reach out to Rich Harper, OIA Government Affairs Director.

White Paper: Outdoor Sports Insurance Highlights the Necessity of Network Security

For years, Network Security Insurance (commonly referred to as Cyber Liability Coverage) was widely regarded as a boutique coverage needed only by large corporations who store and process large volumes of consumer credit card information. In the later part of the last decade, however, this perception proved inaccurate when cyber-attacks on small to midsize businesses and retailers increased nearly 600%. Cyber extortion targeting small businesses now reigns supreme.

The good news is, Outdoor Sports Insurance has access to a wide array of insurance markets that write cyber policies specifically for the small business owner. These policies are both comprehensive in protection and breach response services, and affordable in premium.

Wrapped together with policies that cover the risks associated with hiking, camping, paddling or any outdoor activity, Outdoor Sports Insurance knows the market and has the products to fit any OIA member.

By definition, a “cyber attack”, or “security breach”, refers to unauthorized access to the IT infrastructure of a company by a third party (hacker) with the intent to corrupt, steal, or destroy data. The types of attacks hackers employ to achieve these ends runs a wide spectrum; Denial of Service (DoS), Phishing attacks, Password attacks and cross-site scripting attacks are just a few of the more common means by which hackers wreak havoc on a company’s network (and subsequently the daily operation of the business itself).

The most common attack, and by far the most damaging in terms of financial impact to victims, is the ransomware attack, commonly referred to as, “cyber extortion.” When a company has been hit with a ransomware attack, malicious software infiltrates a portion, or all, of the company’s IT mainframe. As malware increases in sophistication and complexity, so, too, do the extortion demands made upon the targeted companies. Between 2019 and 2020 alone, the number of companies that reported paying a ransomware extortion demand increased more than 300%.

According to a NetDiligence 2020 Cyber Claims study, the total cost of a network breach ranges anywhere from $1,000, to more than $120 million. The average cost to businesses with less than 200 employees is estimated to be $200K – $750K. Between 2018 and 2020, it is estimated that 45% of cyber-attacks targeted businesses with less than 200 employees. Less than 25% of those businesses carried the proper network security coverage, and even fewer had a formal incident response plan in place. Of the businesses impacted that did not carry the proper protection, more than 60% were out of business within 6 months.

Outdoor Sports Insurance works across multiple carriers to make sure all OIA businesses can find the right policy with the appropriate coverage at an affordable premium. In addition to the coverage itself, Outdoor Sports Insurance supplements the policies with risk management services and third party resources curated to ensure policy holders are equipped with the tools to mitigate the threat of an attack, and expedite the response time should an attack occur.

Included in the coverage portfolio, policy holders have access to a 24/7 cyber response hotline, educational tools to help network users identify threats and phishing campaigns, recommendations for protective software implementations, and best practices for user protocol of a business’s IT property and systems.

OIA has assembled best-in-class services provider partners to offer OIA special preferred pricing on goods and services in marketing, sales, sustainability, supply chain, finance, operations, research, rep associations, and trade shows. Outdoor Sports Insurance is one of those provider partners. Learn more about the OSI partner benefit for OIA members here. In order to receive the discounted pricing offered, you must mention and confirm your OIA membership to the service provider.

Rob Martin and Tori Hoeschler from Outdoor Sports Insurance recently sat down with Rick Saez from The Outdoor Biz Podcast to chat skiing, outdoor adventure, and risk management. Learn about how Outdoor Sports Insurance, protects businesses from inherent risks to areas of exposure that are less obvious, including how small and mid-sized businesses are increasingly becoming targets of cyberattacks. Also hear about how proper waivers and training can save a shop, and how Outdoor Sports Insurance can help you with all of it.

To learn more about cybersecurity offerings from Outdoor Sports Insurance, please contact the team at outdoorsportsins.com, or email OSI@horizonagency.com. And check out this Outdoor Biz podcast featuring Rob Martin and Tori Hoeschler from OSI

 

 

Audio Outdoorist: A Conversation with the Trade Advisory Council

Hear from OIA’s Director of Policy, Rich Harper, and members of the OIA Trade Advisory Council (OIATAC) as they discuss the council’s important policy role. In this conversation, Rich is joined by:

  • Sara Bowersox, Sr. Manager, Global Trade Compliance, KEEN Footwear
  • Ben Christensen, Vice President, Operations, Simms Fishing Products
  • Jeff Tooze, Vice President, Global Customs & Trade, Columbia Sportswear

OIATAC reviews U.S. trade policy, relevant federal legislation and international trade negotiations, develops federal trade policy that may affect OIA membership and recommends policy positions to OIA government affairs staff and OIA leadership. It is made up of OIA members engaged in the business of manufacturing, marketing, and/or distributing outdoor recreation products. It includes representatives from small, medium and large entities representing all segments of the industry, including manufacturing, importers and retailers. OIATAC is administered and supported by OIA government affairs staff. Learn more about OIATAC here.

Subscribe to OIA’s Audio Outdoorist and listen to the full episode and other episodes anytime, anywhere. You can find the podcast on iTunes and SoundCloud

A Washington Town Hall on Trade for Outdoor Companies

When: Wednesday, May 5

OIA Director of Government Affairs Rich Harper will lead a discussion with OIA’s outside trade counsels, Ron Sorini and Andrew Samet, on the wide range of issues that impact global supply chains of critical importance to outdoor companies. Sorini, Samet & Associates has represented OIA for over 15 years, helping our membership navigate a myriad of issues, from punitive tariffs on products sourced from China to securing duty-free treatment for travel goods in the Generalized System of Preferences (GSP).

These are among the topics that Rich, Ron and Andrew will discuss:

  • China tariffs: how long they might continue and prospects for a new exclusion process
  • What the focus in Washington on forced labor means for the industry
  • Implications of the Biden administration’s Build Back Better plan for the industry
  • Shipping challenges for outdoor companies
  • The prospects for new tariffs or free trade stemming from the Section 301 investigations with Vietnam
  • The future of critical trade programs such as GSP and miscellaneous tariff bills (MTBs)
  • Your questions

THRIVING PEOPLE, THRIVING PLANET AND THRIVING BUSINESSES: BIDEN, CONGRESS AND THE OUTDOOR RECREATION ECONOMY

Presenters: George Cooper, Forbes-Tate; Rich Harper, Outdoor Industry Association; Taldi Harrison, REI; Amy Horton, Outdoor Industry Association; Mike Ratchford, W.L. Gore & Associates; Senator Martin Heinrich (D-N.M.); Jeannie Renne-Malone, VF Corporation

Description: The 2020 general election was one of the most consequential in U.S. history for the outdoor recreation economy. And outdoor voters responded in record numbers in support of all aspects of our policy priorities. With a new administration and Congress, we now have the opportunity to build on the success of the Great American Outdoors Act and help tackle climate change, protect our public lands and waters, expand access to the outdoors for all Americans and help our industry recover from the COVID-19 pandemic with new investments in green infrastructure and close-to-home recreation and a balanced trade agenda. Join us for an exciting conversation on what lies ahead for the outdoor recreation economy and how we can play a meaningful role.

Covid Edition: Letter from Our Executive Director

It is hard to believe a full year has passed since the global coronavirus pandemic shut down our nation, ravaged communities and caused economic disruption unseen in our lifetimes. We won’t soon forget the devastation, and there is still much work ahead to repair the damages the outdoor industry incurred. However, as I reflect on the past year, I am inspired by how our community came together to respond to this crisis and to deliver some powerful achievements, demonstrating our resilience and strength.

I am particularly proud of the following actions that OIA and our industry were able to take:

We conducted an industry-wide member survey to understand the business impacts of the pandemic and to learn how OIA can lend a hand with tools, resources and advocacy support. We heard from our members the value of focusing on critical outdoor issues such as equity in the outdoors, climate action, public lands, conservation, the outdoor recreation economy and trade. We also heard the need, loud and clear, for new ways for our community to convene. We have already begun delivering on these issues and will continue to do so in 2021 to demonstrate value to our members.

The outdoor industry showed up to support our critical work. We made many asks of you, our members, in the past 12 months, and we are humbled to share that your support will allow us to continue to serve to elevate the collective voice, influence and power of the outdoor industry. Thank you to those who stepped up to Leadership and Support membership levels.

Countless outdoor industry businesses rapidly pivoted their production to make millions of PPE units—including masks, face shields, gowns, ventilators and other critical equipment— for frontline workers. At OIA, we worked quickly to support our members with tools such as this webinar to help move efforts faster and further. Read the inspirational stories here.

Outdoor Retailer went virtual, and OIA pivoted to provide more than 20 education sessions at the Summer and Winter Online shows. Watch our on-demand sessions on topics ranging from DEI to outdoor recreation and from climate action to participation and trade.

OIA advocated on our industry’s behalf in Washington, D.C., and at the state level for economic disaster relief and delivered resources, such as our COVID-19 Hub and webinar and Campfire Conversation series. We also developed a comprehensive policy platform for the 2020 election and secured key meetings with the new administration and Congress.

Outdoorists committed to #VoteTheOutdoors and followed through. In a time of great political division and polarization, protecting the outdoors is one thing we can all agree on. Together through our #VoteTheOutdoors campaign, we were able to preserve public lands and waters, lower costs for outdoor businesses, help advance sustainable business practices and shape public policy.

Outdoor participation grew. Forthcoming research confirms what our industry was reporting anecdotally: people across the country were able to find a reprieve from the pandemic in outdoor activities like trail running, hiking, camping, fishing, biking and more. I take comfort in knowing our industry helped millions of Americans recreate safely through the Recreate Responsibly coalition and that retailers and outfitters across the country found new and creative ways to continue serving their customers, many of whom were newcomers. Our Special Report, The New Outdoor Participant (COVID and Beyond), will help you learn what motivated these newcomers and offer strategies for retaining them, even after pandemic restrictions are lifted.

The Thrive Outside Initiative released its first annual Impact Report. The Thrive Outside Initiative empowers communities to make outdoor recreation an accessible lifestyle for all. This effort is a catalyst to drive positive outcomes in critical areas such as health and wellness, youth development, social justice and community development—all more important than ever during the pandemic. Read what we were able to accomplish and how the communities adapted in year one.

We committed to building a just and equitable outdoors. As the association for the outdoor industry, we have a voice—and a corresponding responsibility to do more. The police killing of George Floyd and countless instances of racism and racial violence against Black people were horrific, and we know these events are not isolated and are part of a long history of systemic racism and injustice in our country and in the outdoors. Read our statement and commitment to do better, as well as the progress we made in 2020.

The Climate Action Corps grew to more than 80 members. In light of global circumstances around the pandemic, it would not have been surprising to see companies take a step back from their sustainability efforts. But the outdoor industry doubled down on its commitment to combat the climate crisis, and we gained dozens of new and committed Corps members. Learn more about our industry’s collective commitment to measure, plan and reduce its greenhouse gas (GHG) emissions and share progress annually.

Despite the challenges and setbacks our industry endured over the past year, we also demonstrated incredible resiliency and unity. I am eager to see how this momentum carries our industry toward continued collaboration, innovation and growth.

As always, please do not hesitate to reach out to our membership team. We are here for you as we collectively work to recover.

Together We Are a Force,

Lise Aangeenbrug
OIA Executive Director

New ban on products made with forced labor in Xinjiang, China

The Trump administration announced last week that it would ban all inbound shipments containing cotton or any cotton products – including textiles and apparel – originating from the Xinjiang Production and Construction Corps (XPCC) due to forced labor and human rights concerns.

The XPCC is a paramilitary organization that is responsible for most of the cotton production and harvest in the Xinjiang Uighur Autonomous Region (“XUAR”) of China. The U.S. Department of Agriculture estimates that XUAR’s cotton harvest accounts for more than 80 percent of China’s overall cotton production.

This action is the latest in the administration’s effort to combat forced labor and other human rights violations in the Xinjiang region, home to China’s Muslim Uyghur community.

In September of 2020, the U.S. Customs and Border Protection (CBP) announced it would detain imports suspected of being made with forced labor from the following entities in XUAR:

  • Xinjiang Junggar Cotton and Linen Co. and its subsidiaries – Cotton
  • Hefei Bitland Information Technology Co. – Computer parts
  • Yili Zhuowan Garment Manufacturing Co. – Apparel products
  • Baoding LYSZD Trade and Business Co. – Apparel products
  • Lop County No. 4 Vocational Skills Education and Training Center – All products
  • Lop County Hair Product Industrial Park – Hair products

In July of 2020, the administration listed the XPCC as a specially designated national (SDN) under U.S. sanctions laws enforced by the Office of Foreign Asset Controls (OFAC) by the Treasury Department; this bars all transactions that benefit the XPCC or its subsidiaries and affiliates with a 50-percent-or-greater controlling share by XPCC. The Commerce Department has also placed companies connected to the Xinjiang region on its Entity List subject to technology export controls.

In addition, the Senate may consider the House-passed Uighur Forced Labor Prevention Act (H.R.6210/S.3471) before the end of the year. As currently drafted, the bill includes the following provisions:

  • A requirement for the administration to develop an action plan to address forced labor in the XUAR.
  • A prohibition starting 120 days after enactment of the importation of all goods produced, in whole or in part, in the XUAR, based on a presumptive link to forced labor – unless the importer can provide clear evidence to the contrary.
  • A requirement that SEC-reporting companies include new disclosures about any nexus to the XUAR.

It is possible that the bill’s provisions could be amended before a final vote in the Senate. We will keep you posted on any developments.

To learn more about this important issue and the impact on outdoor companies, check out this OIA webinar from September.

FAQ: 2020 BUREAU OF ECONOMIC ANALYSIS REPORT ON OUTDOOR RECREATION RELEASED

Outdoor Recreation Is an Economic Force; Accounts for Over 2 Percent of U.S. Gross Domestic Product

November 20, 2020

How is the Bureau of Economic Analysis (BEA) study different from the OIA economic study?
The featured BEA measures include gross output, a measure of outdoor recreation goods and services produced by domestic industries; and value added, a measure of the contribution of outdoor recreation industries to gross domestic product (the primary measure of economic activity in the nation). OIA’s study measures consumer spending on all gear-related expenses and associated travel for outdoor recreation, including spending on imported products.

How does the $842B nominal gross output ($788B real gross output*) contribution line up with the OIA’s $887 billion consumer spending on outdoor recreation?
Both are true, they just measure different economic contributors. The BEA satellite account measures gross output while OIA’s study measures consumer spending on all gear-related expenses and associated travel for outdoor recreation.

It is important to note; the BEA estimate only includes the wholesale and retail mark-ups applied to imported products while the OIA’s figures report all consumer spending.

* Current-dollar estimates are valued in the prices of the period when the transactions occurred—that is, at “market value.” Also referred to as “nominal estimates” or as “current-price estimates.” Chained-dollar (Real) estimates are calculated by taking the current-dollar level of a series in the base period and multiplying it by the change in the chained-type quantity index number for the series since the base period. Chained dollar estimates correctly show growth rates for a series but are not additive in periods other than the base period.

What is the methodology of the OIA Outdoor Recreation Economy Report?
BEA’s analysis for the time period 2012-2019 was just released on November 10. We have not had an opportunity to review the methodology at this point, but what we do know is that our economic report is based on consumer spending, while the BEA’s numbers are focused on measuring gross output and value added.

Essentially, our economic report – which is basic economic input-output modeling – starts with the consumer and works down to the manufacturing/imports point. The BEA goes the opposite direction, starting with production in manufacturing and other industries and works up to the consumer. This approach uses different data sets and methods which accounts for differences, too.

What is the difference between gross output and value added (or GDP)?
Gross output (GO) is the measure of total economic activity in the production of goods and services. It is a much broader measure of the economy than gross domestic product (GDP), which measures final output (finished goods and services).