Trade expert: Region’s businesses missing boat with exports
Fargo - North Dakota companies exported $3.7 billion worth of goods last year, while Minnesota companies did $20.7 billion in international trade.
Still, the potential is there to do much more, according to Heather Ranck.
“I am always working to open people’s eyes,” said Ranck, director of the U.S. Commercial Service office in North Dakota, which also covers parts of Minnesota.
“I think 85 percent of the companies I come across could be doing so much more (exporting); they just don’t dedicate the needed resources to it,” added Ranck, who strives to give people a clear view of the region’s export picture.
“When I do seminars, I always ask: What do you think North Dakota’s No. 1 exports are? And everybody always says, ‘Food.’
“Well, it (food) is not even in the top three or four,” said Ranck, who added that exports that are high on the list are things like bulldozers and tractors.
As for imports, Ranck said because of the variety of ways goods enter the United States it is a difficult thing to track imports for individual states and reliable information for North Dakota and Minnesota was not available.
Exports, however, are a different matter, with trade goods leaving the states tracked very closely.
Oddly enough, North Dakota’s top export – crude oil – is an export largely in name only, according to Ranck, who explained it this way:
For many years, the United States has had a ban on the exportation of crude oil.
Because of the North American Free Trade Agreement, however, Canada is an exception and North Dakota crude flows north via pipelines.
However, it doesn’t stay in Canada.
Instead, after crossing the U.S.-Canadian border, the North Dakota crude heads south again and gets distributed through the U.S. pipeline system.
“It used to be that the oil from Canada was coming south, but we produced so much more they reversed the flow of the pipeline and it crosses the Manitoba border, connects to a larger one (pipeline) and comes back down,” said Ranck, who added that if the U.S. ban on crude exports was lifted, it would benefit North Dakota.
“We’re getting a lower price because we don’t have all the market access we would like,” she said.
A recent analysis touted by the American Petroleum Institute holds that North Dakota could add up to 23,787 jobs and $2 billion to the state economy in 2020 if the restriction on U.S. crude exports is lifted.
When Ranck talks to business owners about exports, she said they are often surprised by how little stands in the way of doing business internationally.
“Every time I meet with a company, they’re blown away by what all they can do, how easy it is,” she said.
“Twice today, I had people contact me and they’re like, ‘What kind of license do I need to export?’
“And I’m, like, you do not need a license. There’s very little bureaucracy. You don’t have to register,” Ranck said.
According to Ranck, the biggest limitation on exporting is identifying customers.
“Figuring out where to find those buyers is the No. 1 thing,” she said.
And that’s where companies like Fargo-based CH Trade come in.
The company, founded and headed by Chris Harris, brings sellers and buyers together, regardless of how far apart they may be geographically.
CH Trade recently received the President’s “E” Award for Export Services and it’s well-deserved, according to Dave Karlstrom, owner of Cormax, a Moorhead company that sells weight-lifting gear.
A little more than a year ago, Ranck’s office helped connect Karlstrom with CH Trade and since then Cormax’s international business has taken off, according to Karlstrom.
He said Cormax now does business in countries such as Russia, the United Kingdom, South Africa and China, where CH Trade recently secured a large order, Karlstrom said.
“Things are going good,” he added.
When it comes to linking businesses with export partners, selectivity is important, Harris said.
“Saying ‘no’ to the wrong partner is just as important as saying ‘yes’ to the right one,” Harris said, adding that once business ties are established, “do not think the work is over. One must constantly manage and develop international relationships.”
Short of hiring a consultant like CH Trade, Ranck said there are simple steps businesses can take to boost their export potential on their own.
The No. 1 thing is having a decent website, according to Ranck.
“You’d be shocked at how noninternational, or even how unprofessional some websites are,” Ranck said.
She stressed that the U.S. Commercial Service is also a resource for businesses.
“My agency has offices everywhere in the world and almost everything that we do is meant to get buyers and sellers together,” Ranck said.