CN Rail strike begins, threatening Canada oil, grain shipments
By: Thomas Black | Nov 19, 2019 at 07:57 AM | Intermodal News
About 3,200 workers at Canadian National Railway Co. went on strike at midnight Tuesday, threatening to crimp shipments of oil, potash and grain across the country.
Conductors and railyard operators at Canada’s largest railway walked off the job after failing to reach an agreement with the company over issues including working conditions and drug benefits, the Teamsters Canada Rail Conference union said.
“Unfortunately, we were unable to reach a deal with CN,” the union said in a statement. Workers have been without a contract since July and served a strike notice on Saturday.
CN Rail is one of two main rail networks that Canada uses to ship consumer goods and exports of canola, wheat, potash and other resources from the prairies to seaports. The company carries C$250 billion ($189 billion) worth of goods annually and has increasingly been moving into shipping oil amid a bottleneck of pipelines from Alberta’s oil sands.
A representative for the Montreal-based company declined to immediately comment on the strike. On Saturday, it said it continued to negotiate in good faith and had offered to go to binding arbitration, which the union rejected.
Managers may step in to operate trains, blunting the impact of any walkout. Allison Landry, an analyst with Credit Suisse Group AG, said a walkout may crimp CN’s cargo volume, the labor action likely wouldn’t last long and the impact on the company’s earnings wouldn’t be meaningful.
“Historically, rail strikes have lasted a few days, and the Canadian government has been quick to step in and implement back-to-work legislation given the significant threat to the economy,” Landry said in a note to clients.
Government Monitoring
Still, the government may have less leverage to push for a resolution over the next couple of weeks because parliament isn’t scheduled to convene until Dec. 5. That could delay the adoption of back-to-work legislation until then.
Canadian Labor Minister Patty Hajdu traveled to Montreal on Monday to meet representatives from both sides. In a Nov. 16 statement, Hajdu said the federal government is monitoring the situation closely and “has faith” in the collective bargaining process.
The Teamsters argue that workers are being forced to operate trains alone from outside the locomotive while hanging on to moving trains with one hand and working a remote-control device in the other, creating a safety hazard. The union is also balking at a lifetime cap on prescription drug coverage and said the company is making it more difficult to take time off and work longer hours.
Canadian National fell 0.2% to close at C$123.76 in Toronto on Monday. It has gained 22% this year.
China 301 Tariffs and Exclusions, Updated
List of China section 301 exclusions as of today:
List of
all commodities on China
Section 301 additional duties:
https://www.strtrade.com/assets/htmldocuments/USTR%20301%20All%20Lists%20Combined.pdf
Around 3,000 CN Rail workers threaten to launch national strike in November
MONTREAL, THE CANADIAN PRESS, PUBLISHED 1 DAY AGO
CN Rail employees represented by the Teamsters Canada Rail Conference voted last month in favor of a strike. RYAN REMIORZ/THE CANADIAN PRESS
Canadian National Railway conductors, trainpersons and yardpersons have threatened to launch a strike in three weeks after six months of negotiations.
The Teamsters Canada Rail Conference disclosed Monday that its 3,000 members voted 99.2 per cent last month in favor of a strike.
A strike could begin at 12:01 a.m. on Nov. 19, after the union provides at least 72 hours notice.
The union is trying to put pressure on the Montreal-based railway ahead of a resumption of negotiations with the help of federal mediators on Nov. 12.
The workers, who are mostly located in major urban centers across Canada, have been without a contract since July 23.
CN Rail lowered its forecasts last week by pointing to a deterioration in North American rail demand and a further slowdown in the economy.
“CN remains committed to working with the TCRC and is optimistic that an agreement will be reached,” a CN Rail spokesman said.
USTR Announces China 301 Tariffs List 4A Exclusions Process
[Billing Code 3290-F0]OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE
Docket Number USTR-2019-0005
Procedures for Requests to Exclude Particular Products from the August 2019 Action Pursuant to Section 301: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation
AGENCY: Office of the United States Trade Representative.
ACTION: Notice and request for comments.
SUMMARY: In a notice published on August 20, 2019, the U.S. Trade Representative announced that the Office of the U.S. Trade Representative (USTR) would establish a process by which U.S. stakeholders may request an exclusion from additional duties of particular products classified within a tariff subheading covered by the August 2019 action. This notice announces that USTR will open an electronic portal for submission of exclusion requests on October 31, 2019 for products covered by Annex A of the August 2019 action, and sets out the specific procedures for submitting requests.
DATES:
October 31, 2019 at noon EDT: The web portal for submitting exclusion requests – https://exclusions.USTR.gov – will open.
January 31, 2020 at 11:59 PM EDT: Last day for submitting exclusion requests.
Responses to individual exclusion requests are due 14 days after USTR posts the request on the online portal. Any replies to responses to an exclusion request are due the later of 7 days after the close of the 14-day response period, or 7 days after the posting of a response.
ADDRESSES: You must submit all requests, responses to requests, and replies to responses through the online portal: https://exclusions.ustr.gov.
FOR FURTHER INFORMATION CONTACT: For questions about the product exclusion process, contact Assistant General Counsels Philip Butler or Megan Grimball at (202) 395-5725. For questions on customs classification or implementation of additional duties, contact traderemedy@cbp.dhs.gov.
SUPPLEMENTARY INFORMATION:
A. August 2019 Action
For background on the proceedings in this investigation, please see the prior notices issued in the investigation, including 82 FR 40213 (August 24, 2017), 83 FR
14906 (April 6, 2018), and 84 FR 22564 (May 17, 2019).
In a notice published on August 20, 2019, the U.S. Trade Representative, at the direction of the President, announced a determination to modify the action being taken in the Section 301 investigation by imposing an additional 10 percent ad valorem duty on products of China with an annual aggregate trade value of approximately $300 billion. 84 FR 43304 (August 20, 2019). The August 20 notice contains two separate lists of tariff subheadings, with two different effective dates. List 1, which is set out in Annex A of the August 20 notice, was effective September 1, 2019. List 2, which is set out in Annex C of the August 20 notice, currently is scheduled to take effect on December 15, 2019. On August 30, 2019, the U.S. Trade Representative, at the direction of the President, determined to modify the action being taken in the investigation by increasing the rate of additional duty from 10 to 15 percent ad valorem on the goods of China specified in Annex A and Annex C of the August 20 notice.
B. Procedures to Request the Exclusion of Particular Products
USTR invites interested persons, including trade associations, to submit requests for exclusion from the additional duties for products covered by List 1 of the August 2019 action. As explained in more detail below, each request specifically must identify a particular product, and provide supporting data and the rationale for the requested exclusion. USTR will evaluate each request on a case-by-case basis, taking into account the asserted rationale for the exclusion, whether the exclusion would undermine the objective of the Section 301 investigation, and whether the request defines the product with sufficient precision. Any exclusion will be effective for one year, starting from the September 1, 2019 effective date for Annex A of the August 20, 2019 notice. USTR will periodically announce decisions on pending requests.
To submit an exclusion request, requesters must first register on the portal at https://exclusions.ustr.gov. As noted above, the portal will open at noon EDT on October 31, 2019. After registration, the requester can fill out and submit one or more exclusion request forms.
Fields on the exclusion request form marked with an asterisk (*) are required fields. Fields with a green (Public) notation will be publicly available. Fields with a gray (BCI) notation are for Business Confidential Information and the information entered will not be publicly available. Additionally, parties will be able to upload documents and indicate whether the documents are BCI or public. Requesters will be able to review the public version of their submission before the submission is posted.
In order to facilitate preparation of requests prior to the October 31 opening of the web portal, a facsimile of the exclusion request form to be used on the portal is attached as an annex to this notice. Please note that the color-coding of public fields and BCI fields is not visible on the attached facsimile, but will be apparent on the actual form used on the portal.
Set out below is a summary of the information to be entered on the exclusion request form.
Each requester must provide contact information, including the full legal name of the organization making the request, whether the requester is a third party (law firm, trade association, or customs broker) submitting on behalf of an organization or industry, and the primary point of contact (requester and/or third party submitter). The requester may report whether the requester’s business satisfies the Small Business Administration’s size standards for a small business, which are identified by North American Industry Classification Systems Codes and are found in 13 CFR 121.201.
With regard to product identification, any request for exclusion must include the following information:
- The 10-digit subheading of the HTSUS applicable to the particular product requested for exclusion. If no 10-digit subheading is available (i.e., the 8-digit subheading does not contain breakouts at the 10-digit level), requesters should use the 8-digit subheading and add “00”. Different models classified under different 8-digit or 10-digit subheadings are considered different products and require separate exclusion requests.
- Product name and a detailed description of the product. A detailed description of the product includes, but is not limited to, its physical characteristics (e.g., dimensions, weight, material composition, etc.). Requesters may submit a range of comparable goods within the product definition set out in an exclusion request. Thus, a product request may include two or more goods with similar product characteristics or attributes. Goods with different SKUs, model numbers, or sizes are not necessarily different products.
- The product’s function, application (e.g., whether the product is designed to function in or with a particular machine or other device), principal use, and any unique physical features that distinguish it from other products within the covered 8-digit HTSUS subheading. Requesters may submit attachments that help distinguish the product (e.g., CBP rulings, photos and specification sheets, and previous import documentation). Documents submitted to support a requester’s product description must be made available for public inspection and contain no BCI. USTR will not consider requests that identify the product using criteria that cannot be made available for public inspection.
- Whether the product is currently subject to an antidumping or countervailing duty order issued by the U.S. Department of Commerce.
Requesters must provide their relationship to the product (Importer, U.S. Producer, Purchaser, Industry Association, Other) and provide specific data on the annual quantity and value of the Chinese-origin product, domestic product, and third-country product the requester purchased, in 2017, 2018, and the first half of 2019.
Requesters must provide information regarding their gross revenues for 2018 and the first half of 2019.
For imports sold as final products, requesters must provide the percentage of their total gross sales in 2018 that sales of the Chinese-origin product accounted for.
For imports used in the production of final products, requesters must provide the percentage of the total cost of producing the final product(s) the Chinese-origin input accounts for and the percentage of their total gross sales in 2018 that sales of the final product(s) accounted for.
As noted in the attached facsimile, required information regarding the requester’s purchases and gross sales and revenue is BCI and the information entered will not be publicly available.
With regard to the rationale for the requested exclusion, each requester will be asked to address the following:
- Whether the particular product is available only from China and whether the particular product and/or a comparable product is available from sources in the United States and/or in third countries. The requester must provide an explanation if the product is not available outside of China or the requester is not sure of the product availability.
- Whether the requester has attempted to source the product from the United States or third countries.
- Whether the imposition of additional duties on the particular product will cause severe economic harm to the requester or other U.S. interests.
- Whether the particular product is strategically important or related to “Made in China 2025” or other Chinese industrial programs.
In addressing each factor, the requester should provide support for their assertions. To provide information about the possible cumulative effects of the Section 301 tariff actions, requesters also may submit information about any exclusion requests submitted by the requester under the initial $34 billion tariff action (Docket ID: USTR- 2018-0025), the additional $16 billion tariff action (Docket ID: USTR-2018-0032), or the additional $200 billion tariff action (Docket ID: USTR-2019-0005) and the value of the requester’s imports covered by the previous tariff actions. Requesters also may provide any other information or data that they consider relevant to an evaluation of the request.
C. Responses to Requests for Exclusions
After a request for exclusion of a particular product is posted on USTR’s online portal, interested persons will have 14 days to respond to the request, indicating support or opposition and providing reasons for their view. A response to a product exclusion request must be submitted using USTR’s online portal at https://exclusions.ustr.gov. To file a response, an interested party does not have to register. Responses will be publicly available.
D. Replies to Responses to Requests for Exclusions
After a response is posted on USTR’s online portal, the requester will have the opportunity to reply to the response using the same portal. Any reply must be submitted within the later of 7 days after the close of the 14-day response period, or 7 days after the posting of a response. A reply to a response must be submitted using USTR’s online portal at https://exclusions.ustr.gov. Replies to responses will be publicly available.
E. Submission Instructions
As noted above, interested persons must submit requests for exclusions in the period between the opening of the portal on October 31, 2019, and January 31, 2020. Any responses to those requests must be submitted within 14 days after the requests are posted. Any reply to a response must be submitted within the later of 7 days after the close of the 14-day response period, or 7 days after the posting of a response. Interested persons seeking to exclude two or more products must submit a separate request for each product, i.e., one product per request. As noted above, a single product may include two or more goods with similar product characteristics or attributes.
By submitting an exclusion request, a response, or a reply, the submitter certifies that the information provided is complete and correct to the best of his or her knowledge.
F. Paperwork Reduction Act
In accordance with the requirements of the Paperwork Reduction Act of 1995 (PRA) and its implementing regulations, USTR submitted a request to the Office of Management and Budget (OMB) for emergency review and clearance of this information collection request (ICR) titled 301 Exclusion Requests. OMB assigned control number 0350-0015, which is due to expire on December 31, 2019. USTR has submitted the information collection to OMB for review and approval of a three-year extension of the control number. 84 FR 43853 (August 22, 2019).
Joseph Barloon
General Counsel
Office of the U.S. Trade Representative.
Exclusion Request Form
- Submitter Information
Full Organization Legal Name * (Public)
Requestor First Name * (BCI)
Requestor Last Name * (BCI)
Requestor Mailing Address
Street Address Line 1 * (BCI)
Street Address Line 2 (BCI)
City * (BCI)
State * (BCI)
Zip Code * (BCI)
Country * (BCI)
Requestor E-mail Address * (BCI)
Requestor Phone Number * (BCI)
Does your business meet the size standards for a small business as established by the Small Business Administration? * (Public) YES/NO/Not Sure
Are you a third party, such as a law firm, trade association, or customs broker, submitting on behalf of an organization or industry? * (Public) YES/NO
Note: If you are submitting on behalf of an organization/industry, the information below is required.
Third Party Firm/Association Name (Public)
Third Party First Name (BCI)
Third Party Last Name (BCI)
Third Party Mailing Address
Street Address Line 1 (BCI)
Street Address Line 2 (BCI)
City (BCI)
State (BCI)
Zip Code (BCI)
Country (BCI)
Third Party E-mail Address (BCI)
Third Party Phone Number (BCI)
Who will be the primary point of contact? (Select One) * (BCI)
- Requestor
- Third Party Submitter
- Requestor and Third Party Submitter
- Please provide the 10-digit HTSUS item number* for the product you wish to address in this product exclusion request. A 10-digit HTSUS number is required. * (Public)
Use numerical characters only with no special characters (Example: 1023456789). For help with finding the HTSUS item number associated with your product, see https://hts.usitc.gov/.
- Is this product subject to an antidumping or countervailing duty order issued by the U.S. Department of Commerce? *
- Please provide a complete and detailed description of the particular product of concern. (A detailed description of the product includes, but is not limited to, its physical characteristics (e.g., dimensions, weight, material composition, etc.), whether product is designed to function in or with a particular machine (application), the unit value of the product (please provide a range if necessary), and any unique physical features that distinguish it from other products within the covered 8-digit HTSUS subheading. If needed, please attach images and specification sheets, CBP rulings, court decisions, and previous import documentation below.) Please also describe the product’s principal use.
Note: USTR will not consider requests that identify the product using criteria that cannot be made available to the public. USTR will not consider requests in which more than one unique product is identified.
Product Name * (Public)
Product Description (e.g. dimensions, weight, material composition, etc.) * (Public)
Product Function, Application, and Principal Use * (Public)
Please upload any relevant attachments that will help identify and distinguish your product (e.g. CBP rulings, photos and specification sheets, and previous import documentation) (Public)
- Requestor’s relationship to the product (select all that apply) * (Public)
- Importer
- U.S. Producer
- Purchaser
- Industry Association
- Other
- Is this product, or a comparable product, available from sources in the United States? (If you indicate “NO” or “NOT SURE,” in the box below, you must explain why the product is unavailable or why you are unsure of the product’s availability.)
* (Public)
- YES
- NO
- NOT SURE
Please explain why the product is unavailable or why you are unsure of the product’s availability. (Submitter Determines BCI or Public)
- Is this product, or a comparable product, available from sources in third countries? (If you indicate “NO” or “NOT SURE,” in the box below, you must explain why the product is unavailable or why you are unsure of the product’s availability.) * (Public)
- YES
- NO
- NOT SURE
Please explain why the product is unavailable or why you are unsure of the product’s availability. (Submitter Determines BCI or Public)
- Please discuss any attempts to source this product from United States or third countries. * (Public)
- Please provide the value in USD and quantity (with units) of the Chinese-origin product of concern that you purchased in 2017, 2018, and the first half of 2019. Limit this figure to the products purchased by your firm (or by members of your trade association). Please provide estimates if precise figures are unavailable. * (BCI)
2017 Value: 2017 Quantity:
2018 Value: 2018 Quantity:
2019 Value (Jan-Jun): 2019 Quantity (Jan-Jun):
Are the provided figures estimates?: * (BCI) YES/NO
Are any of these purchases from a related company? * (BCI) YES/NO
Please list the name and relationship of the related company. (BCI)
- Please provide the value in USD and quantity (with units) of the product of concern that you purchased from any third-country source in 2017, 2018, and the first half of 2019 (Jan-Jun). Limit this figure to the products purchased by your firm (or by members of your trade association). Please provide estimates if precise figures are unavailable. * (BCI)
2017 Value: 2017 Quantity:
2018 Value: 2018 Quantity:
2019 Value (Jan-Jun): 2019 Quantity (Jan-Jun):
Are the provided figures estimates?: * (BCI) YES/NO
- Please provide the value in USD and quantity (with units) of the product of concern that you purchased from domestic sources in 2017, 2018, and the first half of 2019 (Jan-Jun). Limit this figure to the products purchased by your firm (or by members of your trade association). Please provide estimates if precise figures are unavailable. * (BCI)
2017 Value: 2017 Quantity:
2018 Value: 2018 Quantity:
2019 Value (Jan-Jun): 2019 Quantity (Jan-Jun):
Are the provided figures estimates?: * (BCI) YES/NO
- Please provide information regarding your company’s gross revenue in USD for 2018 and the first half of 2019 (Jan-Jun). * (BCI)
Fiscal Year 2018:
First Half of 2018 (Jan-Jun):
First Half of 2019 (Jan-Jun):
Are the provided figures estimates?: * (BCI) YES/NO
- Is the Chinese-origin product of concern sold as a final product or as an input used in the production of a final product or products? * (Public)
a) For imports sold as final products, please provide: (BCI)
% of your company’s total, U.S. gross sales in 2018 that the Chinese-origin product accounted for.
b) For imports of inputs used in the production of final products, please provide: (BCI)
% of the total cost of producing the final product(s) the Chinese-origin input accounts for.
% of your company’s total, U.S. gross sales in 2018 that sales of the final product(s) incorporating the input accounts for.
- Please comment on whether the imposition of additional duties on the product you are seeking to exclude will result in severe economic harm to your company or other U.S. interests. In addressing this factor, please address the number of employees in your company and the number of employees potentially affected. * (BCI)
- Please provide any additional information in support of your request, taking account of the instructions provided in Section [B] of the Federal Register notice. (Submitter Determines BCI or Public)
- Did you submit exclusion requests for the Section 301 $34 billion (Docket ID: USTR- 2018-0025), the $16 billion (Docket ID: USTR-2018-0032), and/or the $200 billion (Docket ID: USTR-2019-0005) tariff actions? * (Public) YES/NO
Please enter the total value of your company’s imports applicable to the tariff action for which you submitted one or more exclusion request: (BCI)
Initial $34 Billion Tariff Action:
Additional $16 Billion Tariff Action:
Additional $200 Billion Tariff Action:
- Please comment on whether the particular product of concern is strategically important or related to “Made in China 2025” or other Chinese industrial programs. You must explain in the box below why you believe the product of concern is or is not strategically important or related to “Made in China 2025” or other Chinese industrial programs. * (Public)
- Include any additional attachments that should be considered along with this exclusion request (e.g., customs rulings, court decisions, previous import documentation, etc.). Please do not include attachments that contain your written argument. (Submitter Determines BCI or Public)
Failure to recoup increased low sulphur fuel costs could see lines blanking more sailings
Source: theloadstar.com, By Mike Wackett, 17/09/2019
With IMO 2020 0.5% sulphur cap on marine fuel just over 100 days from becoming law a leading shipping analyst has warned shippers that it is vital that ocean carriers succeed in obtaining their interim BAF surcharges.
Container market expert and chief executive of SeaIntelligence Consulting Lars Jensen said that a failure to obtain compensation for the extra costs relating to the preparation for IMO 2020 could result in a “significant” increase in blanked sailings.
Container lines will begin to incur additional costs in the final quarter of the year as vessels that are not equipped with exhaust gas cleaning scrubbers transition from the current mainstay of 3.5% HFO (heavy fuel oil) to a compliant maximum 0.5% sulphur content LSFO (low sulphur fuel oil).
Indeed, carriers are preparing for a one-off hit of millions of dollars of costs associated with the decontamination of tanks, along with the extra expense of bunkering with LSFO, in order to be compliant with IMO 2020 from the 1 January start date.
“It is clear that the carriers will incur additional costs in the final stretch of 2019, due to the fuel switch,” said Mr Jensen.
“What is less clear is the degree to which they will be successful in passing this through to shippers,” said Mr Jensen.
Yesterday The Loadstar reported on a “disturbing” container market appraisal from Bimco’s chief shipping analyst, Peter Sand.
Mr Sand cautioned that the weak outlook for liner shipping would be further aggravated by a failure of ocean carriers to recover the cost of IMO 2020 from shippers.
The analyst argued that the oversupply of container capacity would make it “difficult” for the lines to recover the additional fuel costs from IMO 2020.
However, with the liner industry estimated to have lost a cumulative $0.5bn in the first half of the year; freight rates coming under severe pressure; and booking forecasts on the major tradelanes worsening by the week carriers could be forced to act ruthlessly and take out even more capacity.
Mr Jensen argued that if carriers are not successful in implementing their interim BAFs they might “also be challenged in implementing the full BAF from January.
“As a consequence, they would likely feel compelled to reduce capacity in many tradelanes in order to ensure implementation, and in this case we could see the amount of blank sailings significantly beyond what we are already witnessing,” Mr Jensen continued.
And with the bombing of a Saudi refinery at the weekend substantially spiking global oil prices the spread could grow even.
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.
Are you familiar with GENERAL AVERAGE?
2019, year to date, there are a number of notable fire cases, with many resulting in General Average!
- Sincerity Ace – January 2019
- Maersk Honam – March 2018
- Maersk Kensington – March 2018
- Barcelona Ferry Excellent – October 2018
- Hyundai Auto Banner – May 2018
- MOL Prestige – February 2018
- Caribbean Fantasy – June 2018
|
Yantian
Express Year built 2002, 100,003 dwt Date of loss: 1/3/19 Part loaded with 4,000 teu (capacity 7,551 teu.) 198 total loss, 462 damaged required survey LOF salvage – security 32.5% GA – security estimate 28% |
|
APL
Vancouver Year built 2013, 115,060 dwt Date of loss: 1/31/19 Part loaded with (capacity 9,200 teu.) 947 containers affected LOF salvage – security 15-20% GA – security |
|
ER
KOBE Year built 2001, 68,196 dwt Date of loss: 2/24/19 GA declaration on March 12, 2019 NO SEPARATE SALVAGE CLAIM GA – security estimate 10% |
General Average – The Concept
- Formulated by the Ancient Greeks to deal with situations where cargo has been jettisoned.
- Basic principle – that which has been sacrificed for the benefit of all shall be made good by the contribution of all.
- Applies to maritime claims only.
- Is declared by the captain when there is imminent danger to the vessel, voyage or crew.
- You are contractually obligated, via the Bill of Lading, for unknown and undetermined costs.
How does it work?
- Value of the voyage is determined (vessel value plus value of all cargo on the vessel.)
- Participation is determined by the percentage that the value of your cargo bears to the overall value of the voyage.
- The loss amount is determined, and participation percentage is applied to the loss amount to determine security deposit.
- Shipper or their cargo insurer pay twice – first for the initial contribution, then for a bond covering future adjustments to that estimate.
Hidden Costs
- The great unknown (is my cargo OK?); delays – finding a port, unloading & sorting; has my shipment missed deadlines?
- LCL Freight – has everyone in my container paid? Freight is not released until all payments received.
Difficulties of preventing and extinguishing fires on the open sea, include:
- Ships are larger with more varied cargo.
- Crew are ill equipped to deal with these fires.
- Fire-fighting tugs are often days or weeks away.
- Prevention is difficult, with rising problems with mis-declared cargo.
- IMDG Code is evolving to impose stricter rules on dangerous goods (DG.)
Problems Facing the Industry
- Stricter rules on DG will lead to higher costs and more incentive on the part of shippers to avoid proper declarations
- Ship owners and shipbuilders need to improve fire-fighting capabilities with CO² systems being shown to be inadequate – cost benefit analysis – are potential losses greater than the prevention costs?
- National Cargo Bureau in NY found in 2017 that of 1,721 stowage plans inspected, 20% showed errors with DG
General Average will never go away, so how do we make that less painful?
- Awareness across all business units that losses & delays are part of any supply chain. Mission-critical shipments need more risk analysis to determine transport mode.
- Understanding of what to do when General Average occurs. This is best led by your cargo insurance provider meeting with your ‘team,’ not just the risk manager or CFO.
When was the last time your insurance provider did this for you?
Do they know how to handle a GA claim?
- Have a contingency plan or at least an understanding of how the event will unfold.
Blank Sailings in October, Update
Per official notices received this morning, there are 36 vessels in October omitted stop (week 40 – week 44). Week 41 shows 15 canceled sailings. The outlook is not optimistic as to general space status after China National Holiday. We have been informed by several carriers that vessels through the end of October are overbooked. Most Shipping Orders are only being released for new bookings “subject to rolling”.
The large number of blank sailings causes the entire market in October to be a mess, and space will be tight the entire month. We will try our best to protect urgent shipments, or we can explore whether there are other, premium services available, in order to guarantee space.
Thank you in advance for your understanding of any inconvenience caused. If you have any questions, please contact your BOC Representative.
Blank Sailings (announced at this time):
| Week# | Alliance | Carrier (Service String) | Gateway | Blank Sailing Details |
| 40 | 2M |
*MSK (TP6), *MSC (Pearl), Hamburg (UPAS3), Hyundai (PS5) | PSW |
M/V : ETD NSA 10/04 ETD HKG 10/06 ETD YTN 10/07 ETD XMN 10/09 ETA LAX 10/22 |
| 40 | 2M+Zim |
*ZIM (ZCP), MSK (TP10),MSC (Amber Jack) Hamburg (ASUS1), Hyundai (AW3) | EC – (P) |
M/V : ETD XNG 10/04 ETD TAO 10/06 ETD NBO 10/08 ETD SHA 10/10 ETD BUS 10/13 ETA SAV 11/06 |
| 41 | 2M+Zim |
*MSK (TP88), ZIM (ZGX), MSC (Pelican) Hamburg (ASUS 6) New – 1st sailing ETD XMN 08/16/2019 | EC – (P) |
M/V : ETD XMN 10/11 ETD YTN 10/14 ETD BUS 10/17 ETA HOU 11/10 |
| 41 | 2M+Zim |
*MSK (TP16), *MSC (Emerald), ZIM (ZSA), Hamburg (ASUS3) , Hyundai (AW4) – new routing from WK 33 2019 Merask Sydney | EC – (P) |
M/V : TBA ETD XMN 10/08 ETD KAO 10/09 ETD YTN 10/11 ETD SHA 10/15 ETD BUS 10/18 ETA SAV 11/11 |
| 41 | 2M+Zim |
*MSK (TP8), *MSC (Orient), Hamburg (UPAS1), Hyundai (PS4), ZIM (ZP8) Zim callling PRR only | PNW |
M/V : Gunvor Maersk ETD XNG 10/09 ETD TAO 10/11 ETD SHA 10/15 ETD BUS 10/17 ETD YOK 10/20 ETA PRR 10/28 |
| 43 | 2M+Zim |
*ZIM (ZCP), MSK (TP10),MSC (Amber Jack) Hamburg (ASUS1), Hyundai (AW3) | EC – (P) |
M/V : ETD XNG 10/25 ETD TAO 10/27 ETD NBO 10/29 ETD SHA 10/31 ETD BUS 11/03 ETA SAV 11/27 |
| 40 | Non-alliance | SM Line (PNS) | PNW |
M/V :TBA ETD YTN 10/04 ETD NBO 10/06 ETD SHA 10/08 ETD BUS 10/10 ETA YVT 10/21 |
| 40 | Non-alliance |
*Cosco (AAC3), *PIL (ACS), *Wanhai (CP2) OOCL(PCC2), APL (CC3), CMA (YangTse) | PSW |
M/V : KOTA PURI ETD LYG 10/02 ETD SHA 10/06 ETD NBO 10/07 ETA LGB 10/20 |
| 41 | Non-alliance | SM Line (PNS) | PNW |
M/V : TBA ETD YTN 10/11 ETD NBO 10/13 ETD SHA 10/15 ETD BUS 10/17 ETA YVT 10/28 |
| 41 | Non-alliance |
*OOCL (SC2) , Cosco (AASP), – Summer Loop only Till Oct 06 2019 – 8 sailing only | PSW |
M/V : COSCO VENICE ETD HKG 10/07 ETD YTN 10/08 ETA LGB 10/21 |
| 42 | Non-alliance |
*Hyundai (PS1), MSK (TP3) / MSC (Yulan) | PSW |
M/V : ETD SHA 10/16 ETD Gwangyang 10/18 ETD BUS 10/20 ETA LAX 10/30 |
| 42 | Not in OA | APL (EXX) – add Honolulu in Aug 2019 | PSW |
M/V : Northern Diplomat ETD NBO 10/17 ETD SHA 10/18 ETA LAX 10/29 |
| 40 | Ocean Alliance |
*CMA (Columbus PNW), APL (WAX), OOCL (PNW2), Cosco (MPNW) EMC (NP1), PIL (AN2) | PNW |
M/V : CMA CGM Aquila ETD YTN 10/01 ETD XMN 10/03 ETD NBO 10/04 ETD SHA 10/07 ETD BUS 10/10 ETA SEA 10/20 |
| 40 | Ocean Alliance |
*Cosco (CEN), OOCL (PCN1) APL (CC2), CMA (Bohai) EMC/ZIM /YML/Wanhai (CEN), PIL (AC3) | PSW |
M/V :Cosco Italy V.031E ETD XNG 10/06 ETD TAO 110/09 ETD SHA 10/11 ETD NBO 10/12 ETA PRR 10/24 |
| 41 | Ocean Alliance |
*OOCL(ECX1), Cosco (AWE4) EMC (SAX) APL (AW2), CMA (SAX), | EC – (P) |
M/V : OOCL Chongqing V.029E ETD Cai Mep 10/08 ETD HKG 10/11 ETD YTN 10/13 ETD XMN 10/14 ETD SHA 10/17 ETA NYC 11/12 |
| 41 | Ocean Alliance |
*Cosco (AWE2), OOCL (ECX2), APL (AW1), CMA (Manhattan Bridge), EMC (NUE2) | EC – (P) |
M/V : CMA CGM J.Adams V.108E ETD TAO 10/07 ETD NBO 10/10 ETD SHA 10/12 ETD BUS 10/14 ETA NYC 11/08 |
| 41 | Ocean Alliance |
*CMA (PEX3), APL (PG6), OOCL(GCC1), Cosco (GME2), EMC (PEX3) | EC – (P) |
M/V : APL Califorina ETD SGP 10/07 ETD HKG 10/11 ETD SHE 10/12 ETD NBO 10/16 ETD SHA 10/17 ETD BUS 10/19 ETA HOU 11/12 |
| 41 | Ocean Alliance |
*Cosco (GME) CMA (GMX), EMC (GME), OOCL (GCC2) | EC – (P) |
M/V : Cosco Auckland V.043E ETD SHA 10/07 ETD NBO 10/08 ETD XMN 10/10 ETD YTN 10/11 ETA HOU 11/06 |
| 41 | Ocean Alliance |
*Cosco (CPNW), OOCL (PNW4), APL (NP2),CMA (TPX), EMC (PE2), PIL (ANW) | PNW |
M/V : CSCL Bohai Sea 030N ETD HKG 10/08 ETD YTN 10/10 ETD NBO 10/13 ETD SHA 10/15 ETA PRR 10/26 |
| 41 | Ocean Alliance |
*OOCL (PCC1), Cosco (AAC4) APL (CC9), CMA (HIX), EMC (PCC1), PIL (AC7) | PSW |
M/V :OOCL Luxemburg V.069E ETD NBO 10/13 ETD SHA 10/15 ETD BUS 10/17 ETA LGB 10/28 |
| 41 | Ocean Alliance |
*CMA (PRX), APL (SC1), OOCL (PCS1), Cosco (AAS2) EMC (PRX), PIL (AC6), Wanhai (CP3) | PSW |
M/V : CMA CGM Bougainville V.018E ETD FUQ 10/07 ETD NSA 10/09 ETD HKG 10/10 ETD YTN 10/11 ETD XMN 10/13 ETA LAX 10/26 |
| 42 | Ocean Alliance |
*OOCL (PNW1), Cosco (OPNW), APL (NP4), CMA (DAS), EMC (PNW1) | PNW |
M/V : OOCL Vancouver V.111E ETD SHE 10/20 ETD HKG 10/21 ETD YTN 10/22 ETD KAO 10/23 ETA YVR 11/11 |
| 42 | Ocean Alliance |
*CMA (Columbus PNW), APL (WAX), OOCL (PNW2), Cosco (MPNW) EMC (NP1), PIL (AN2) | PNW |
M/V : APL SOUTHAMPTON ETD YTN 10/15 ETD XMN 10/17 ETD NBO 10/18 ETD SHA 10/21 ETD BUS 10/24 ETA SEA 11/03 |
| 44 | Ocean Alliance |
*EMC (HTW) OOCL(PCS2), Cosco (AAS3) CMA (GEX), | PSW |
M/V : Ever Ursula ETD TPE 10/29 ETD XMN 10/31 ETD SHE 11/02 ETD YTN 11/03 ETA LAX 111/17 |
| 40 | The Alliance | *ONE,*YML, Hapag (EC2) | EC – (P) |
M/V : SEASPAN HUDSON 0014E ETD TAO 10/05 ETD NBO 10/07 ETD SHA 10/10 ETD BUS 10/12 ETA NYC 11/05 |
| 40 | The Alliance | *Hapag, *YML, ONE (EC3) | EC – (P) |
M/V : HOUSTON BRIDGE 0038E ETD KAO 10/04 ETD XMN 10/05 ETD HKG 10/07 ETD YTN 10/08 ETD SHA 10/11 ETA SAV 11/04 |
| 40 | The Alliance | *ONE , Hapag, YML (PN1) | PNW |
M/V :ONE CONTRIBUTION 0038E ETD TAO 10/06 ETD SHA 10/08 ETD NBO 10/11 ETD BUS 10/14 ETA PRR 10/23 |
| 40 | The Alliance | *ONE, *Hapag, YML (PS7) | PSW |
M/V : ARISTOMENIS V.0009E ETD XMN 10/05 ETD HKG 10/09 ETD YTN 10/11 ETA LAX 10/24 |
| 41 | The Alliance | *Hapag,* YML, ONE , (PN3) | PNW |
M/V : YM ULTIMATE 0079E ETD HKG 10/13 ETD YTN 10/14 ETD NBO 10/17 ETD SHA 10/19 ETD BUS 10/21 ETA YVR 11/01 |
| 41 | The Alliance | *YML, Hapag, ONE , (PS4) | PSW |
M/V : YM MILESTONE V.0063E ETD HKG 10/13 ETD YTN 10/14 ETD KAO 10/15 ETD KEE 10/16 ETA LAX 10/28 |
| 41 | The Alliance | *Hapag, *ONE, YML,(PS6) | PSW |
M/V : NYK ADONIS V.0050E ETD TAO 10/07 ETD SHA 10/10 ETD NBO 10/12 ETA LGB 10/24 |
| 42 | The Alliance | *Hapag, *YML, ONE (EC3) | EC – (P) |
M/V : YM Uniform 029E ETD KAO 10/18 ETD XMN 10/19 ETD HKG 10/21 ETD YTN 10/22 ETD SHA 10/25 ETA SAV 11/18 |
| 42 | The Alliance | *ONE , Hapag, YML (PN1) | PNW |
M/V : MOL Creation v.071E ETD TAO 10/20 ETD SHA 10/24 ETD NBO 10/25 ETD BUS 10/28 ETA PRR 11/07 |
| 42 | The Alliance | * YML, Hapag, ONE (PS5) | PSW |
M/V :ONE COMMITMENT V.0045E ETD SHA 10/15 ETD BUS 10/18 ETA LAX 10/ 29 |
| 43 | The Alliance | *ONE, Hapag , YML (PS3) | PSW |
M/V :TBA ETD NHV 10/26 ETD PIP 10/27 ETD COL 10/30 ETD PKL 11/02 ETD SIN 11/04 ETD LCB 11/07 ETD CMP 11/09 ETA LAX 11/26 |
| 44 | The Alliance | * YML, Hapag, ONE (PS5) | PSW |
M/V : YM Utmost V.084E ETD SHA 10/29 ETD BUS 11/01 ETA LAX 11/12 |
China 301 Tariffs Update
CSMS #39985407 – GUIDANCE: Tenth Round of Products Excluded from Section 301 Duties
BACKGROUND
On September 20, 2019, the U.S. Trade Representative (USTR) published Federal Register (FR) Notice 84 FR 49564 announcing the decision to grant the tenth round of certain exclusion requests from the 25 percent duty assessed under the Section 301 investigation related to goods from China ($34B Action – Tranche 1).
These product exclusions relate to the imposed additional duties announced in 83 FR 28710 on Chinese goods with an annual trade value of approximately $34 billion as part of the action in the Section 301 investigation of China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation. The product exclusions announced in this notice will retroactively apply as of the July 6, 2018 effective date of the $34 billion action (Tranche 1) and will extend for one year after the publication of 84 FR 49564.
The exclusions are available for any product that meets the description as set out in the Annex to Federal Register Notice 84 FR 49564, regardless of whether the importer filed an exclusion request. Further, the scope of each exclusion is governed by the scope of the Harmonized Tariff Schedule of the United States (HTSUS) 10-digit headings and product descriptions in the Annex; not by the product descriptions set out in any particular request for exclusion. The Annex to 84 FR 49564 link is embedded in this document for ease of reference. ANNEX
The functionality for the acceptance of the tenth round of products of China excluded from Section 301 duties will be available in the Automated Commercial Environment (ACE) as of September 29, 2019.
GUIDANCE
Instructions for importers, brokers, and filers on submitting entries to CBP containing products granted exclusions by the USTR from the Section 301 measures as set out in 84 FR 49564 are as follows:
- In addition to reporting the regular Chapters 84, 85, 87, 88 and 90 classifications of the HTSUS for the imported merchandise, importers shall report the HTSUS classification 9903.88.14 (Articles the product of China, as provided for in U.S. note 20(q) to this subchapter, each covered by an exclusion granted by the U.S. Trade Representative) for imported merchandise subject to the exclusion.
- Importers shall not submit the corresponding Chapter 99 HTS number for the Section 301 duties when HTS 9903.88.14 is submitted.
- Paragraph “B” of the Annex to 84 FR 49564 corrects a previous exclusion round; U.S. note 20(n) (105) to subchapter III of chapter 99 of the HTSUS (6th Round – 9903.88.11), correcting the description of “Dental X-ray alignment and positioning apparatus.”
ADDITIONAL INFORMATION
Duty exclusions granted by the USTR are retroactive for imports on or after the initial effective date of July 6, 2018 (83 FR 28710). To request a refund of Section 301 duties paid on previous imports of products granted duty exclusions by the USTR, importers may file a Post Summary Correction (PSC) if within the PSC filing timeframe. If the entry is beyond the PSC filing timeframe, importers may protest the liquidation.
Reminder: when importers, brokers, and/or filers are submitting an entry summary in which a heading or subheading in Chapter 99 is claimed on imported merchandise, they should refer to CSMS 39587858 (Entry Summary Order of Reporting for Multiple HTS in ACE).
Imports which have been granted a product exclusion from the Section 301 measures, and which are not subject to the Section 301 duties, are not covered by the Foreign Trade Zone (FTZ) provisions of the Section 301 Federal Register notices, but instead are subject to the FTZ provisions in 19 CFR part 146.
For ease of reference, a summary of Section 301 actions are provided below:
For more information related to the eleventh round of products of China excluded from Section 301 duties, please refer 84 FR 49564, issued September 20, 2019.
Questions from the importing community concerning ACE entry rejections involving product exclusions should be referred to their CBP Client Representative. Questions related to Section 301 entry-filing requirements should be emailed to Traderemedy@cbp.dhs.gov.
Related Messages: #38840764, 19-000332- 19-000244, 19-000212, 19-000155, 19-000052
