U.S. to Ban Goods Made In Xinjiang, China

Under a new law, the U.S. will ban imports of all goods made in whole or in part from any good from the Xinjiang Uyghur Autonomous Region in China, effective June 21, 2022. Companies need to use the next 180 days to ensure their supply chains do not include such goods.

Sandler, Travis & Rosenberg, P.A., has developed a program to help companies review their supply chain visibility in response to this new law.

For more information on this program, please contact Elise Shibles (at (415) 490-1403 or via email eshibles@strtrade.com), Amanda Levitt (at (212) 549-0148) or via email alevitt@strtrade.com), or David Olave (at (202) 730-4960 or via email dolave@strtrade.com).

BOC NOTE: Xinjiang should not be confused with the common coastal port named Xingang (Tianjin). Xinjiang is 2,000 miles inland from Xingang/Tianjin/Yellow Sea. 

LA/LB Port Update- New Fee

The details are being finalized but the current plan is for the terminal to bill the ocean carrier. In the end, the ocean carrier will likely bill the cost to the importer directly or increase the ocean freight to cover the fees. Similar to demurrage, detention, excess chassis fees and now these new charges, everything is getting dumped on the importer. It is unfair but it is what is currently happening in the marketplace.

Until the world governments can step up or until the advantage goes back to the importer when the demand is not so strong, the carrier and terminal will continue to be king and put everything back on the importer. We are suggesting for all importers to contact your congressional representatives and voice your concern.

Chart: American Shipper

BOC will continue to monitor this situation and will advise if there are any changes or updates. If you have any questions please feel free to reach out to your BOC representative.

Finally Some Good News for Importers
(Tariff Exclusions)

USTR will start a targeted tariff exclusion process focused on restating previously extended exclusions, most of which expired on December 31, 2020. Per a Federal Register notice inviting public comment attached, USTR will evaluate the reinstatement of each of these exclusions on a case-by-case basis. The 549 exclusions covered by the notice can be found in the link below:

https://ustr.gov/sites/default/files/files/Notices/Section 301 China Request for Comments/Annex of Previously Extended Exclusions for Website.pdf

For additional information on 301 tariffs, please visit the below link of Sandler, Travis and Rosenberg, PA, or contact their attorney who specializes in this area, Paula Connelly.

https://www.strtrade.com/trade-news-resources/tariff-actions-resources/section-301-tariffs-on-china

Paula Connelly, Esquire
mobile phone: (781) 897-1771
pconnelly@strtrade.com

NOTICE OF CHB DELAYS DUE TO UNCERTAIN BERTHING TIMES/LOCATIONS

All steamship lines are experiencing port and berth congestion. Please see notice below received from Wanhai. This explains the late notice brokers are receiving regarding arrival notices, berthing times and locations. Without an accurate arrival notice, Customs Brokers cannot file Customs entry. Please be patient as we all continue to work through these trying times. Rest assured, our CHB teams want to clear your freight as quickly as possible. 

Asia Holidays

Key Asian locations with upcoming holidays, listed below.

China Schedule for Upcoming holidays.

Taiwan Schedule for Upcoming holidays

Thailand Schedule for Upcoming holidays

Malaysia Schedule for Upcoming holidays

Indonesia Schedule for Upcoming holidays

Japan Schedule for Upcoming holidays

India Schedule for Upcoming holidays

DOT Brake Safety Week

Expect fewer trucks on the road, more delays and increased costs

Brake Safety Week Set for Aug. 22-28

This year’s Brake Safety Week is scheduled for Aug. 22-28. During Brake Safety Week, commercial motor vehicle inspectors emphasize the importance of brake systems by conducting inspections and removing commercial motor vehicles found to have brake-related out-of-service violations from our roadways. At the same time, many motor carriers work to educate their drivers and maintenance service providers on the importance of brake system safety.

Throughout the week, inspectors will conduct North American Standard Inspections of commercial motor vehicles, focusing on the vehicle’s brake systems and components. In addition, inspectors will compile data on brake hoses/tubing, the focus area for this year’s Brake Safety Week, to submit to the Commercial Vehicle Safety Alliance (CVSA). CVSA will report its findings later this year.

Jurisdictions devote a week to conducting commercial motor vehicle inspections, identifying brake violations and removing vehicles with out-of-service brake violations because:

Brake system and brake adjustment violations accounted for more vehicle violations than any other vehicle violation category, accounting for 38.6% of all vehicle out-of-service conditions, during last year’s three-day International Roadcheck inspection and enforcement initiative.

“Brake system” was the third most cited vehicle-related factor in fatal commercial motor vehicle and passenger vehicle crashes, according to the Federal Motor Carrier Safety Administration’s (FMCSA) latest “Large Truck and Bus Crash Facts” report.

Brake-related violations accounted for eight out of the top 20 vehicle violations in 2020, according to FMCSA’s Motor Carrier Management Information System.

During last year’s Brake Safety Week, 12% of the 43,565 commercial motor vehicles inspected were placed out of service for brake-related violations.

The dates for Brake Safety Week are shared in advance to remind motor carriers, drivers and commercial motor vehicle mechanics/technicians to proactively check and service their vehicles to ensure every commercial motor vehicle traveling on our roadways is safe, mechanically fit and compliant. Recent research has shown that announcing enforcement campaigns ahead of time improves overall compliance better than surprise enforcement campaigns and for longer periods after the event.

August, the month of CVSA’s Brake Safety Week, is also Brake Safety Awareness Month. Law enforcement agencies will work to educate commercial motor vehicle drivers, motor carriers, mechanics, owner-operators and others on the importance of proper brake maintenance, operation and performance through outreach, education and awareness campaigns.

Source cvsa.org

New COVID Procedures at Shanghai (PVG) Airport

Please be advised that Shanghai Pudong International Airport (PVG) has implemented new COVID-19 measures, as below:

Under the new 7+7+7 or 14+7+7 measures, terminal workers at PVG are required to:

• work 7 or 14 days in the terminal

• complete a 7-day quarantine in a hotel

• complete another 7-day quarantine at home

This arrangement is expected to cause a shortage in manpower that may result in the following:

• Frequent short- or off-loading

• Shortage of staffing

• Longer terminal handling time

• More flight cancellations and shortage of import and export capacity

• Increase in airfreight rates

• Some suspension of trucking, causing major backlogs

• Embargoes for seafood and perishable items

• Screening and disinfecting of some freight

BOC will continue to monitor and advise, as these requirements and restrictions change.

China-U.S. container shipping rates sail past $20,000 to record

By Roslan Khasawneh and Muyu Xu of Reuters

SINGAPORE/BEIJING (Reuters) – Container shipping rates from China to the United States have scaled fresh highs well above $20,000 per 40-foot box as rising retailer orders ahead of the peak U.S. shopping season add strain to global supply chains. The acceleration in Delta-variant COVID-19 outbreaks in several counties has slowed global container turnaround rates. Typhoons off China’s busy southern coast in late July and this week have also contributed to the crisis gripping the world’s most important method for moving everything from gym equipment and furniture to car parts and electronics.”These factors have turned global container shipping into a highly disrupted, under-supplied seller’s market, in which shipping companies can charge four to ten times the normal price to move cargoes,” Philip Damas, Managing Director at maritime consultancy firm Drewry, said. “We have not seen this in shipping for more than 30 years,” he said, adding he expected the “extreme rates” to last until Chinese New Year in 2022.

RATE HIKES

The spot price per container on the China-U.S. East coast route – one of the world’s busiest container lanes – has climbed over 500% from a year ago to $20,804 this week, freight-tracking firm Freightos said. The cost from China to the U.S. west coast is a little below $20,000, while the latest China-Europe rate is nearly $14,000, Freightos’ data shows. Ding Li, president of China’s port association, told Reuters the spike followed a rebound in COVID-19 cases in other countries, which has slowed turnover at some major foreign ports to around 7-8 days. The surging container rates have fed through to higher charter rates for container vessels, which has forced shipping firms to prioritise service on the most lucrative routes. “Ships can only be profitably operated in the trades where freight rates are higher, and that is why capacity is shifting mostly to the U.S.,” said Tan Hua Joo, executive consultant at research consultancy Alphaliner. Some shippers have reduced volumes in less profitable routes, such as the transatlantic and intra-Asia, said Damas. “This means that rates on the latter are now increasing fast.”

NO RESPITE

The rate surge is the latest reflection of disruptions since COVID-19 slammed the brakes on the global economy in early 2020 and triggered huge changes to the flows of goods and healthcare equipment around the world. “Every time you think you’ve come to an equilibrium, something happens that allows shipping lines to increase the price,” said Jason Chiang, Director at Ocean Shipping Consultants, noting the Suez canal blockage https://www.reuters.com/world/asia-pacific/how-giant-container-ship-is-blocking-suez-canal-2021-03-25 in March had played a major role in allowing firms to hike rates. “There are new orders for shipping capacity, equal to almost 20% of existing capacity, but they will only come online in 2023, so we will not see any serious increase in supply for two years,” Chiang added.

(Reporting by Roslan Khasawneh in Singapore and Muyu Xu in Beijing. Editing by Gavin Maguire and Barbara Lewis)

Severe Limitations on Intermodal Freight moving to Inland USA Points

Most steamship lines have severely limited the intermodal freight they will accept, to move from the US Coasts to Inland Interior US points.

•        ONE is now nearly completely stopping IPI bookings.

•        OOCL/CMA-CGM stopped accepting most IPI bookings.

•        HMM/Yang Ming/Cosco, and Evergreen, have stopped taking almost all IPI bookings.

•        MSC is still accepting some bookings, but has increased the inland fee significantly, when they

do accept a booking.

Most steamship lines have not issued formal letters like ONE has; they simply are refusing to take these bookings.

BOC Customer Advisory

Transpacific faces challenges impacting all of supply chain

Dear Valued Customers,

With this advisory, BOC aims to provide you as our valued customer with the most relevant and up-to-date information to help you navigate this period of heightened volatility.

Key Notes:

• Shanghai and Yantian port operations are starting to experience increased congestion challenges as peak season volume pressure ramps up. Both ports are now experiencing 5-6-day delays on average.

• Equipment Availability in Asia is now at critical levels in several locations with the situation being most dire in both Vietnam and Indonesia, while South China also remains stressed. In Vietnam, the ongoing congestion challenges in Vung Tau it set to deteriorate even further as the region sees a spike in COVID-19 cases. With further lockdowns now introduced, this could very well be the source of the next major supply chain disruption headline in the coming days.

• Ports of Los Angeles and Long Beach improving but still heavily congested. We have 10-15 vessels at anchorage awaiting a berth. All large vessels are limited to 4 gangs and are experiencing extended port stays by on average 3-4 days.

• Port of Oakland vessel wait times have improved to an average of 7-10 days. The heavy congestion, however, has forced shipping lines to limit or omit their scheduled calls. All vessels have been limited to 2 gangs per shift due to continued labor constraints in meeting the high-volume demand.

• Port Yard Utilization at Seattle remains at capacity (120%), with labor restrictions also kept in place pending yard availability improvements. In Prince Rupert, the situation remains pressed with yard operations at 106% to capacity while in Vancouver, the situation is expected to deteriorate over the coming days due to the rail service disruptions brought on by the Lytton wildfires in Canada.

• Truck Capacity and Chassis Availability are in short supply across select locations. The situation is most critical across the Mid-West, Southeast, and Newark. 

Trending Themes:

Yantian Terminal Operations Recovery at a Tipping Point

The situation in Yantian continues to improve with terminal operations slowly returning to normal levels, but as peak volume flows begin to ramp up, the recovery may well be put to test. Vessel wait times that had recovered to within a day have now crept back up to the 5-6-day range. While yard density remains at manageable levels, the challenge from here is largely centered around the clearance of what can only be described as a significant backlog of cargo sitting at customer’s facilities or on factory floors.

There are three factors at play that need to come together in order to resolve the issue. The first and likely most pressing is in the availability of equipment. As many vessels were forced to omit the port during the peak of the COVID outbreak, opportunities to reposition empties into the area were as a result limited. Today we are seeing a shortage of 40’/40HC/45’ in South China. While we are actively working on repositioning containers into the area, customers are asked to where possible substitute their equipment with 20’ containers to alleviate the pressure. The second factor is in the available carrier capacity. While the possibility of introducing additional vessels into the network remains limited, as an alternative we are instead over-allocating space to Yantian cargo on existing vessel calls to help clear the backlog. The final piece to the puzzle is dependent on the continued normalization of operations at the South China ports. Daily truck quotas for laden container return continue to increase but with vessel wait times once again creeping up, this poses a serious risk to the overall recovery.

Empty Equipment Stock in North America is Rising Once Again

The container equipment stock status across North America continues to ebb and flow as supply chain disruptions make repositioning efforts incredibly complex and challenging. While the initial drop in volume brought on by the Yantian disruption had allowed the teams the opportunity to clear out some of the excess stock, the slide sailings that followed had the opposite effect as empties sat awaiting vessel arrivals for repositioning back to Asia. Now with the peak surge, severe congestion in select areas are contributing to slower empty returns. This is not only hurting exporters as chassis availability becomes limited but it’s also causing vessels to return to light or underutilized thus exacerbating the equipment shortage in Asia.

To help combat this shortage we have introduced both Extra Loaders and Gap Loaders to help normalize the network and to move surplus empties back to Asia. Our success is still heavily dependent on customer’s support in turning empty containers back as quickly as possible, particularly in the Pacific Southwest where the situation is most pressed. Also, worth noting as the Wildfires in British Columbia persists, given the dangers, rail providers are prioritizing containment operations rather than container movement. As a result, we expect to see equipment shortages across the West Coast with inland stocks set to rise in the coming weeks.

Trucking Capacity Continues to Tighten in Select Locations

Truck capacity and chassis availability remain a major concern in several locations across North America. The primary challenge in the Northeast is in the limited availability of chassis in the Newark area due to an increase in cargo dwell time. In the Gulf area, Dallas is experiencing reduced truck capacity for long-haul moves while Houston is struggling with both truck and chassis availability. This continues to impact imports departing from Bayport, Barbours CT, and BNSF Pearland as well as exports originating in Houston and West Texas. Mobile and New Orleans are also experiencing reduced truck capacity, with some providers now fully booked through to the end of July.

In the South Atlantic, volumes in Memphis is once again surging, the I-40 bridge closure is still causing capacity issues into west Memphis as drivers are either declining the load or charging a premium for doing so. The bridge is still on schedule to be opened by end of July. In Atlanta, the chassis shortage continues to cause major delays for import rail cargo out of Fairburn. While in the Midwest area we are seeing chassis shortages across the region. As cargo dwell time continues to rise, it is proving to be extremely difficult to source truck or chassis capacity for exports out of Chicago.