Port Houston Bayport and Barbours Cut Terminals Re-Opening for Regular Business March 20
Houston Terminals Bayport and Barbours Cut Closed Temporarily
Transatlantic Air Freight Rates Soar as US Imposes Europe Travel Ban
Theloadstar.com March 12, 2020
Transatlantic air freight rates are expected to soar, possibly overnight, following the US travel ban on mainland Europe, excluding – for now – the UK and Ireland.
Up to 80% of air freight capacity on the transatlantic could be cut as airlines ground passenger flights, with bellies normally taking the lion’s share of the capacity on the route.
“IAG, Air Canada, Virgin and Aer Lingus are all going to be very busy,” said one senior air freight analyst. “There is a tremendous amount of trade between the two continents, and the vast majority is in bellies. If that capacity plunges, you can only imagine the reduction in trade on the Atlantic. There is going to be tremendous pressure on capacity.”
One European forwarder told The Loadstar: “This is going to be another case of ‘pay to play’. Where prices are going to go is anyone’s guess.” Current dynamic load factors on the transatlantic are 78% westbound, and 60% eastbound, according to Clive Data Services. Even with a modest assumption of 60% of the capacity removed, demand is easily going to outstrip supply.
“There are so few airlines with freighters left,” said the analyst. “The US majors have none, it’s really only Lufthansa and AF-KLM, and they have cut their freighter fleets. This is a big gift for IAG.”
Forwarders said that any BSAs on non-cut capacity would be unlikely to be honored by the airlines, and in any event, most contracts would only last until the end of the month.
“The US market tends to work on spot rates anyway.”
Airlines throughout Europe are said to be in meetings to determine how to manage their capacity, with more information expected this afternoon. Some are already talking about using passenger aircraft just to move freight on the transatlantic – and are looking to command a high price for it.
Trucking is also expected to be key, with mainland European carriers looking to fly goods into Canada and Mexico on passenger aircraft and trucked over the borders into the US. In Europe, forwarders are looking to truck freight into the UK for Virgin and IAG flights into the US.
“Cargo is going to be redirected and trucked,” said one forwarder. “The multinational forwarders will already be diverting it to the UK.”
However, belly capacity from the UK has already been cut. BA announced on 2 March it was cutting back transatlantic flights as passenger demand fell. Norwegian cancelled 22 long-haul flights between Europe and the US from 28 March to 5 May.
Section 301 Large Civil Aircraft (LCA) Trade Remedy – Modification March 5, 2020 and March 18, 2020
CBP Modification, Section 301 duties for EU/EU Member States
The U.S. has been in dispute with the European Union (EU) and certain EU member states concerning the subsidies provided on large civil aircrafts that are inconsistent under SCM Agreement and GATT 1994 obligations. CBP has posted the modification to the additional Section 301 duties for EU and EU member states, on February 21,2020 please see 85 FR 10204. Please see the below chart from Cargo System Messaging Service (CSMS)
CBP CSMS # 41840662
CSMS #41840662 – Section 301 Large Civil Aircraft (LCA) Trade Remedy –
Modification March 5, 2020 and March 18, 2020
The purpose of this memorandum is to provide notice of the United States Trade Representative’s (USTR) modification determination to impose additional duties on products of the European Union (EU) or certain member states. The effective date is dependent on the section of Annex 1 and may be either on or after 12:01 a.m. eastern daylight time March 5, 2020 or on or after 12:01 a.m. eastern daylight time March 18, 2020. The complete list of affected products, countries of origin, Chapter 99 HTSUS numbers, and the associated effective dates and tariff rates is attached to the end of this memo.
Effective October 18, 2019, the USTR imposed additional duties on certain products of the EU and certain EU member States in this Section 301 investigation to enforce U.S. WTO rights in the Large Civil Aircraft (LCA) dispute published in the Federal Register 84 FR 54245. On December 12, 2019, the USTR announced a review of the Section 301 action and requested public comments.
On February 21, 2020, based on this review, the USTR published a Modification to the LCA dispute in 85 FR 10204 to revise the action being taken by increasing the rate of additional duties on certain LCA, and by modifying the list of other products of certain current and former EU member States subject to additional 25 percent duties.
As specified in the annexes to FR notice 85 FR 10204 , the USTR has determined to increase the duties on certain LCA from 10 percent to 15 percent. The countries that are affected by the duty increase for LCA are France or Germany.
The USTR has also changed the composition of the list of products subject to additional duties of 25 percent. As of this time, the USTR has decided not to increase the rate of additional duties above the additional 25 percent currently being applied to non-aircraft products. The countries that are affected by the change to the list of products are Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden or the United Kingdom. The LCA Section 301 duties only apply to products of the countries set forth in the Annex to FR notice 85 FR 10204.
The USTR has also determined that going forward, the action may be revised as appropriate immediately upon any EU imposition of additional duties on U.S. products in connection with the LCA dispute or with the EU’s WTO challenge to the alleged subsidization of U.S. large civil aircraft.
The modifications set out in the Annex 1, subparagraphs A and B are applicable with respect to products that are entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern standard time on March 5, 2020. The modifications in additional import duties for products set out in Annex 1, subparagraph C, apply to merchandise entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time March 18, 2020. A complete list of products subject to the remedy and assessed duties are set out in FR notice 85 FR 10204.
Any product listed in the Annex 1, except any product that is eligible for admission under ‘domestic status’ as defined in 19 CFR 146.43, which is subject to the additional duty imposed by this determination, and is admitted into a U.S. foreign trade zone on or after 12:01 a.m. eastern daylight time on March 5, 2020 or March 18, 2020 (only) may be admitted as ‘privileged foreign status’ as defined in 19 CFR 146.41. Such products will be subject upon entry for consumption to any ad valorem rates of duty or quantitative limitations related to the classification under the applicable HTSUS subheading.
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, refer them to CSMS 39587858 (Entry Summary Order of Reporting for Multiple HTS when 98 or 99 HTS are Required).
Please ensure the FR notice 85 FR 10204 is passed to all Center Directors, Assistant Center Directors, Port Directors, Assistant Port Directors (Trade), Import Specialists, CBP Officers, and Entry Specialists. If field personnel have any questions regarding the Section 301 remedy described in the United States Trade Representative (USTR) Notices of Action, please contact firstname.lastname@example.org.
Related Messages: CSMS 40430843, 40281968