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Potential Port Strike / Port Congestion Surcharge (PCS)

June 7, 2014

The time has come again for contract negotiation talks between the Unions and the Terminal Operators and this has always been a time of concern for us.  Any type of disruption of service at the ports can cause very heavy congestion. According to the Journal of Commerce article on 6/5/2014: “The International Longshore and Warehouse Union and Pacific Maritime Association yesterday issued a joint release saying the contract negotiations that began on May 12 are continuing without interruption. “Both parties remain at the table and are working to reach agreement on a new coast-wide contract,” the ILWU and PMA stated. Their goal remains to achieve a tentative contract by July 1. The announcement, though brief, is considered a positive sign because the parties rarely say anything in advance of the contract deadline.” This seems to be good news, however as a precaution, the majority of ship lines servicing North America have filed a Congestion Surcharge with the FMC.  Cargo shipped through any U.S. port (import or export) on or after July 1, 2014 may be subject to the following approximate congestion charge:

  • $800 per 20’
  • $1,000 per 40’
  • $1,125 per 40’ HC

* these charges may vary depending on the ship line and

would only apply IF there is a strike

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SEVERE CONGESTION IN US PORTS AND RAIL TERMINALS

March 6, 2014

It’s official – there are not many ports or rail ramps that are not completely backlogged creating massive headaches, demurrage, per diem, excessive chassis rental fees and about every other charge the terminals can implement.  Everything in the North East and Mid West is extremely behind – Detroit, Chicago, Cleveland, NJ, etc.  Some terminals by weeks.  Oakland, LA and Vancouver are also seeing their own issues, causing a capacity crunch.

How did we get into this mess?

Weather is the primary culprit.  There are not many parts of the US that haven’t experienced bad conditions this year.  It has taken its toll on ports creating closures.

When the ports are closed, the trains are not getting loaded out, thereby delaying the trains.  So once these trains get rolling again they take the rail ramps to excess capacity creating a back log at the ramps.

How can the terminals get out of this mess?

In NY/NJ which is the most backlogged, the draymen have come together to put pressure on the terminals to have night gates and Saturday hours.  The terminals have been resistant to this option as they don’t want to pay the overtime wages to the union dock workers.  With a couple weeks of extended hours the back log could be cleared out.

Time will tell what the long term solution will be for these types of delays and costs resulting from same. But in the short term, it is patience, creative thinking, and access to information that will keep us sane.

US-KOREA FREE TRADE AGREEMENT GOES INTO EFFECT

March 6, 2012

On March 15, 2012, the US-Korea Free Trade Agreement (KORUS FTA) will go into effect. Under the agreement, almost 80 percent of US industrial product exports to Korea will become duty-free. Within 5 years, nearly 95 percent of bilateral trade in consumer and industrial products will become duty free with the balance becoming duty free within 10 years. Some of the goods included in the agreement include aerospace equipment, agricultural equipment, auto parts, building products, chemicals, consumer goods, electrical equipment, environmental goods, footwear and travel goods, paper products, scientific equipment, and shipping and transportation equipment. Nearly two-thirds of US exports of agricultural products to Korea will also gain duty-free status, including wheat, corn, soybeans for crushing, whey for feed use, hides and skins, cotton, cherries, pistachios, almonds, orange and grape juice, and wine. The pact also includes measures not relating to the tariff, such as obligations regarding motor vehicle safety and environmental standards, enhanced regulatory transparency, standard-setting, technology neutrality, customs administration, labor rights, and strengthened protections for intellectual property rights.

KORUS is part of a Presidential goal to double US exports in 5 years. The US International Trade Commission estimates that the tariff cuts provided by the agreement will increase exports from the US by $1 billion.

COURTESY OF LIQUIDATION NOTICES GOING WIRELESS

August 25, 2011

Although the effective date for this is September 30, 2011, the implementation date will be the “first day on or after September 30, 2011 that CBP can provide importers with complete liquidation reports, including liquidation dates, electronically through the ACE Portal.” CBP will confirm the date of implementation through electronic notification.

Once implemented, CBP will no longer provide the paper courtesy notices of liquidation to importers for any entry processed through the Customs ABI system. All ABI filers (importers of record or brokers who file as an agent for the importer of record) will receive electronic liquidation notices. In addition, any importers of record with an ACE Portal Account will be able to monitor their liquidation information through the ACE portal. For any non-ABI entries, paper notices will be mailed to the importer of record. As the vast majority of entries are filed through the ABI system, this would represent a very small amount of transactions.

CBP has adopted this measure as a means of saving money with costs of printing the notices and the associated postage for mailing them. Importers will now need to either rely on obtaining the requisite liquidation information from their authorized customs broker or chose to participate in the ACE Portal Account program so that they can monitor the information themselves.

USITC studies effect of duty-free/quota free imports from Least-Developed Nations

July 8, 2011

USITC News release: EFFECT OF DUTY-FREE, QUOTA-FREE IMPORTS FROM LEAST-DEVELOPED COUNTRIES WILL BE FOCUS OF NEW USITC STUDY

The U.S. International Trade Commission (USITC) has launched an investigation to assess the probable economic effect of allowing products from the world’s least-developed countries (LDCs) to enter the United States free of all duties and quotas.

The investigation, Probable Economic Effect of Providing Duty-Free, Quota-Free Treatment for Imports from Least-Developed Countries, 2012 Report, was requested by the U.S. Trade Representative (USTR) in a letter dated June 16, 2011.

In his request letter, the USTR noted that members of the World Trade Organization (WTO) reached an agreement at the WTO Ministerial Conference in Hong Kong in December 2005 to provide duty-free, quota-free market access to products from LDCs, as defined by the United Nations. The United States will implement the initiative together with the results of the overall Doha round multi-lateral trade negotiations. The USITC prepared a report on the probable economic effect of providing duty-free, quota-free access to LDCs in 2007 at the USTR’s request. The USTR requested the update to address market changes since 2007.

As requested, the USITC, an independent, nonpartisan, factfinding federal agency, will provide advice to the USTR as to the probable economic effect of providing duty-free, quota-free treatment for imports from LDCs on industries in the United States producing like or directly competitive products, consumers, imports under U.S. preference programs, and imports from U.S. free trade agreement (FTA) partners. The investigation will cover each article in chapters 1 through 97 of the Harmonized Tariff Schedule (HTS) of the United States for which U.S. tariffs or tariff-rate quotas remain, taking into account preferential tariff treatment currently being provided to LDCs under the African Growth and Opportunity Act and the Caribbean Basin Initiative programs and that could be provided under the Generalized System of Preferences if Congress renews that program. The USITC’s advice will be based on the 2010 HTS nomenclature and on 2010 trade and tariff rate data. Additionally, the USITC will, to the extent possible, evaluate the articles in chapters 50 through 63 of the HTS to identify products not currently imported from LDCs for which imports could potentially increase following the granting of DFQF access and the possible effect of trade diversion on U.S. imports from countries with which the United States has FTAs or preferential trade programs, including countries to which the United States is a major exporter of yarns and fabrics.

The USITC expects to submit its report, which will be confidential, to the USTR by February 16, 2012.

The USITC will not hold a public hearing in connection with this investigation; however, it welcomes written submissions for the record from all interested parties. Written submissions (one original and 14 copies) should be addressed to the Secretary, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436, and should be submitted at the earliest practical date, but no later than 5:15 p.m. on September 16, 2011. All written submissions, except for confidential business information, will be available for public inspection.

Further information on the scope of the investigation and appropriate submissions is available in the USITC’s notice of investigation, dated July 8, 2011, which can be obtained from the USITC Internet site (http://www.usitc.gov) or by contacting the Office of the Secretary at 202-205-2000.

USITC general factfinding investigations, such as this one, cover matters related to tariffs or trade and are generally conducted at the request of the U.S. Trade Representative, the House Committee on Ways and Means, or the Senate Committee on Finance. The resulting reports convey the Commission’s objective findings and independent analyses on the subject investigated. The Commission makes no recommendations on policy or other matters in its general factfinding reports. Upon completion of each investigation, the USITC submits its findings and analyses to the requester. General factfinding investigations reports are subsequently released to the public, unless they are classified by the requester for national security reasons.

TSA Wants 100% screening for US Bound air cargo

February 21, 2011

The TSA (Transportation Security Administration), is proposing to accelerate the 100% screening requirement for US bound air cargo to be effective December 31, 2011.  This requirement was not expected to go into effect until 2013, but recent global events have shown a compelling need to reach the 100 percent goal by year’s end.

The cargo screening requirement is part of the 9/11 Act signed into law August 3, 2007, which mandates a system to be established for 100% passenger aircraft cargo screening within a three year period.  The goal is to have a security level comparable to that of passenger checked baggage.  Note that the cargo screening requirement applies only to air cargo loaded on board passenger aircraft.  It does not apply to all-cargo freighter aircraft.

GSP Expired 31 December 2010

January 5, 2011

The Generalized System of Preferences (GSP) trade program, which impacts imports into the US from many countries, expired the last day of 2010.  In the past, this program has been renewed and made retroactive, and it’s expected that Congress will consider its reauthorization again soon.  In the interim, importers should pay the normal trade relations (column 1) duty rate but flag imports eligible for GSP with the applicable special program indicator (SPI). Flagging imports with SPI will help facilitate duty refunds if the program is retroactively renewed.

US Customs and Border Protection (CBP) has advised that they will issue additional instructions soon.  Pegasus3 Worldwide Logistics will continue to provide updates regarding the renewal of GSP.