A Challenge to Shippers Who Would Never Dream of Controlling the Insurance
Shippers who rely on suppliers to furnish cargo insurance or who rely on their carriers to take responsibility for losses may be in for a big surprise. Protecting your investments by insuring your goods provides peace of mind.
Buying CIF: Who’s really responsible if your product is lost or damaged in transit? According to internationally accepted trade terms, referred to as Incoterms, suppliers selling “CIF” (Cost, Insurance, Freight) are responsible for arranging cargo insurance. But just because your supplier has the obligation to arrange insurance under CIF terms, it doesn’t mean that they are ultimately responsible if your product is lost or damaged during transit. The ultimate burden of loss falls upon you, the buyer. This is why many experts recommend importers change their buying terms to EXW, FOB, FCA, CFR or similar terms in order to control the selection, and thereby the quality, of insurance coverage.
How much is that insurance really costing you? Foreign suppliers and their forwarding agents often tack on placement fees to the insurance costs. Those added fees often inflate the cost of insurance well beyond market pricing for the same coverage purchased in the United States. Find out how much you’re really paying and then compare quotes received from BOC International.
Is the coverage your supplier purchased for you adequate? Importers relying on their suppliers to arrange insurance run the risk of having inadequate insurance coverage. Cargo insurance policies can vary widely in levels of coverage, deductibles and special restrictions. Ask your supplier for a complete copy of the insurance policy or for a certificate of insurance detailing all the policy terms and conditions
What’s the financial health of your supplier’s insurance company? Recent financial and catastrophic events have exposed the vulnerability of insurance companies to sudden economic devastation. Importers are encouraged to make certain their suppliers use insurers with a favorable financial rating supplied by a respected financial rating service. A.M. Best, Standard & Poor’s and Moody’s are among some of the world’s most respected. BOC’s insurance company, underwriters at Lloyd’s of London, has an A.M. Best financial rating of A (Excellent).
How will your claim be handled? If insurance is arranged overseas, will you be forced to deal with an inexperienced, sub-contracted independent adjuster unfamiliar with the assessment of transportation related losses? Ask your supplier for a list of insurance claims adjusters contracted by the insurance company. Adjuster and surveyor networks approved by Lloyd’s of London and AIMA are among the most credible. BOC has a vested interest in your insurance needs and will directly handle cargo claim documentation requirements to ensure prompt processing and timely settlement.
Every Shipper Needs Cargo Insurance
Global trading involves risk; however, broad insurance coverage minimizes your financial risk. Don’t leave your livelihood up to chance! Statistics show that one ship sinks each day and you will experience a General Average loss every eight years. If you are depending on the carrier to cover losses, their responsibility is limited by law as follows:
Ocean Carriers $500 per shipping unit
A shipping unit may be defined as one ocean container.
Air Carriers $9.07 per pound
Truckers $.50 per pound
The insurance we offer is competitively priced and insures approved merchandise against physical loss or damage from external causes. By purchasing cargo insurance, you can avoid inconvenience and frustration. Contact your BOC Representative at 617-345-0050 for your free quote.
Transpacific Network Service Updates
US Pacific Northwest
Dear Valued Customer,
We are reaching out to you to inform you of changes to our Transpacific – US Pacific Northwest services. Due to rising costs and overcapacity in the market, we have made adjustments to our TP2, TP8 and TP9 services. Our existing TP1 service, serving Vancouver and Seattle, will be removed from our product offering.
Please find the updated service rotations:
TP9 Service
- First port of call changed to Vancouver
- Second port of call changed to Seattle and removal of Prince Rupert
- Addition of Yokohama, Kaohsiung and Xiamen
- Removal of Nansha from rotation
- Westbound rotation to maintain direct coverage of Yokohama and Kaohsiung
The first effective sailing will depart from Kaohsiung the week of August 20-26.
TP9 Eastbound: Kaohsiung > Xiamen > Yantian > Ningbo > Shanghai > Busan > Vancouver > Seattle
TP9 Westbound: Vancouver > Seattle > Yokohama > Busan > Kaohsiung > Xiamen > Yantian > Ningbo > Shanghai
TP8 Service
- Addition of Prince Rupert
- Addition of Shanghai
- Removal of Ningbo
The first effective sailing will depart from Xingang on the week of August 20-26.
TP8 Eastbound: Xingang > Qingdao > Shanghai > Busan > Yokohama > Prince Rupert > Long Beach > Oakland
TP8 Westbound: Prince Rupert > Long Beach > Oakland > Xingang > Qingdao > Shanghai > Busan > Yokohama
TP2 Service
- Addition of Ningbo
- Removal of Shekou
The first effective sailing will depart from Singapore on the week of August 20-26.
TP2 Eastbound: Singapore > Vung Tau > Yantian > Ningbo > Shanghai > Long Beach > Oakland
TP2 Westbound: Long Beach > Oakland > Busan > Shanghai > Ningbo > Chiwan > Singapore
We would like to take this opportunity to say thank you for doing business with us. If you have any questions, please feel free to reach out to your local sales or customer service representative. You will find contact details of our local offices on maerskline.com.
Sincerely,
Your Maersk Line North America Team
China Trade War Continues – Important Updates for Importers
There are two important updates in the Section 301 investigation on China practices.
First, as many have probably heard, the U.S. Trade Representative’s office has issued a notice on a new proposed list of products that could be subject to an additional 10% duty. This list includes over 6,000 HTS provisions, covering many items. Specifically excluded are certain pharmaceutical products of Chapter 30 and apparel items of Chapters 61 and 62.
As with the prior proposed lists, the USTR’s office is allowing for a public comment period and public hearing.
Written comments must be submitted by August 17, 2018, with a post-hearing rebuttal comments by August 30, 2018.
The public hearing will be held in Washington, D.C. on August 20, 2018. Those interested in attending must submit requests to appear at the hearing by July 27, 2018. The request to appear must include a summary of testimony and may be accompanied by a pre-hearing submission.
As with the previous proposed lists, the USTR requests that that those seeking inclusion or exclusion that commenters of a specific HTS provision “address specifically whether imposing increased duties on a particular product would be practicable or effective to obtain the elimination of China’s acts, policies, and practices, and whether maintaining or imposing additional duties on a particular product would cause disproportionate economic harm to U.S. interests, including small- or medium-size businesses and consumers.”
The USTR notice including the list of HTS provisions can be accessed at the link below. If you import from China, I highly recommend that you review this list as there are many HTS provisions included.
https://ustr.gov/sites/default/files/301/2018-0026%20China%20FRN%207-10-2018_0.pdf
Second, the USTR’s office has issued instructions on requesting exclusions from the Section 301 25% duties that became effective on July 6. These cover the HTS provisions that were included in the first 301 list. Keep in mind that the second proposed list is still under review by the U.S. government. The list published on July 10 is a third list of products.
Regarding the exclusion request process, requests must be filed by October 9, 2018. Any exclusions granted will be retroactive to July 6. The Federal Register notice includes the following requirements for submissions:
- Identification of the particular product in terms of the physical characteristics (e.g., dimensions, material composition, or other characteristics) that distinguish it from other products within the covered 8- digit subheading. USTR will not consider requests that identify the product at issue in terms of the identity of the producer, importer, ultimate consumer, actual use or chief use, or trademarks or tradenames. USTR will not consider requests that identify the product using criteria that cannot be made available to the public.
- The 10 digit subheading of the HTSUS most applicable to the particular product requested for exclusion.
- Requestors also may submit information on the ability of U.S. Customs and Border Protection to administer the exclusion.
- Requestors must provide the annual quantity and value of the Chinese-origin product that the requestor purchased in each of the last three years. For trade association requestors, please provide such information based on your members’ data. If precise annual quantity and value information is not available, please provide an estimate and explain the basis for the estimation. With regard to the rationale for the requested exclusion, each request for exclusion should address the following factors:
- Whether the particular product is available only from China. In addressing this factor, requestors should address specifically whether the particular product and/or a comparable product is available from sources in the United States and/or in third countries.
- Whether the imposition of additional duties on the particular product would cause severe economic harm to the requestor or other U.S. interests.
- Whether the particular product is strategically important or related to ‘‘Made in China 2025’’ or other Chinese industrial programs
The Notice also states that the USTR office prefers requests to be submitted electronically. It also provides the following instructions on submission:
To submit requests via www.regulations.gov, enter document ID number USTR–2018–0025–0001 on the home page and click ‘‘search.’’ The site will provide a search-results page listing the Federal Register Notice associated with this docket. Find a reference to this notice and click on the link titled ‘‘comment now!’’. Once posted on the electronic docket, the exclusion request will be viewable in the ‘‘primary documents’’ section.
The Federal Register Notice, published today, can be accessed at the following:
https://www.gpo.gov/fdsys/pkg/FR-2018-07-11/pdf/2018-14820.pdf
If you have questions on either of these developments, please contact our office and we would be happy to discuss these further.
Paula M. Connelly, Esq.
Law Offices of Paula M. Connelly
100 Trade Center
Suite 660
Woburn, MA 01801
781-897-1771
www.connellycustomslaw.com
Customs Lawyer
Paula M. Connelly is a principal in the Law Offices of Paula M. Connelly, a law firm specializing in Customs and international trade matters. She has been practicing law since 1991 and prior to working as an attorney, worked as a licensed Customs broker for several customs brokerage companies in the Boston area. She has over 20 years experience in Customs and International Trade matters and works with numerous importers and exporters in addressing and resolving import and export compliance issues.
