Chinese Counterfeit Growth Continues
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Both the quantity and variety of counterfeit goods coming into the U.S. are increasing, says the International Anti-Counterfeiting Coalition. Approximately 70% of counterfeit goods coming into the U.S. originate in China. While China is stepping up its intellectual property laws, counterfeiters are getting more sophisticated in their methods to outwit them. Counterfeiters will slightly modify foreign patents and then file them under a Chinese patent. Their goal is to file their trademarks in China before the true foreign manufacturer does. Being "first to file" appears to be legally more significant than being "first to invent" or "first to use," experts say. Other countries with counterfeit issues include the Philippines, Vietnam, Brazil, Ukraine, Paraguay, Russia and Pakistan.
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Shipping Rates Increase
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Labor shortages, regulatory costs, high fuel prices and rising demand that is outstripping capacity are reasons shippers list for rising shipping costs. The trade imbalance continues to affect liner capacity as well as inbound rates. However, experts say that rate hikes for those importing from the East will not be as steep as last year. Rates are expected to rise 6-7% in 2005, as compared to the 10% hike in 2004. Manufacturers have been able to pass some of the cost increases along to consumers in January and February, according to a March survey by the Federal Reserve.
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New Deal Highlights
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$3.5 Million Commitment
Background: A company with an established market providing building materials to major OEMs wanted to diversify its manufacturing sources. The new suppliers required LC's and documentary collections (D/P) to pay for inventory production. The company had a financing relationship with a factor, but with insufficient receivable coverage, couldn't support financing production and related in-transit inventory from overseas.
Funding Solution: Transcap provided a tiered credit facility with an LC and in-transit inventory financing, satisfying client and overseas supplier requirements. Assistance with logistics coordination by Transcap resulted in a successful transaction structure with the company's customs brokers and freight forwarder. With new production sources secure, the company now enjoys increased sales and profits. Also, its factor was able to increase the company's financing of the sales and accounts receivable created as a result of the funding from Transcap.
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