In the 27 years of BOC International’s existence managing logistics supply chains and transpacific transportation, we have never experienced such turmoil, disruption, delay, cargo congestion, lack of capacity, lack of equipment, as we see today. Unfortunately, we are forecasting that it will become worse each day in the next two months. We think it is our responsibility to be transparent and share all market conditions with our customers. We are partners and need to communicate openly and tackle challenges together. As 2020 comes to a close, we feel we are approaching the nearest we have ever come to a logistical Apocalypse.
BOC would like to advise you of some observations we see in the marketplace to help you manage your supply chain.
- Despite the entire global fleet of ocean capacity being launched in the Transpacific Market, the backlog of tens of thousands of containers continues to grow larger each day.
- Empty Container availability in Asia is approaching a new record low, and containers are scarcer every day in most Asia origin ports.
- Container volumes in October jumped 23.7 percent from a year ago. Container volumes in November jumped 28.2 percent from a year ago.
- Globally, carrier on-time performance in October reached a record low of 52.4 percent. November on-time performance is approaching a new record low of 45%, as we wait for the final numbers to be calculated. The average vessel delay globally in October was 4.86 days. The average vessel delay globally in November was approximately 6 days.
- Containers are rolling over 25%-50% of the time, depending on the carrier. Particularly at transshipment ports, we see a high percentage of rollovers with cargo sitting 7-21 days.
- Many USA ports are overwhelmed with container volume, and some setting record volume months in the history of their port operations (Savannah and Virginia) in November. The heavy volume has caused tremendous delays to pick up cargo and drop off empties. Up to 20 vessels have been seen at anchor waiting to be unloaded in the LA/LB harbor.
- Excess demurrage and detention are being accumulated due to a lack of chassis, inadequate trucker capacity, and terminal operation volume constraints. Cargo is difficult to pick up and drop off throughout the USA Ports and Container Yards.
- Multiple carriers have announced they will temporarily suspend the cargo’s acceptance from/to South China side ports via transit ports from 1/15/2021 to 2/23/2021. This policy of suspending feeder vessel service in South China will add to a further backlog.
- Carriers are reducing and in some cases eliminating the release of any new fixed-rate and spot rate bookings. We are also seeing some cargo that is already booked being canceled and encouraged to rebook at spot rate plus a premium surcharge.
- Transpacific container transportation costs have now achieved all-time highs. Costs are now 200%-500% higher than in May 2020. We see this trend continuing to at least March.
Please contact your BOC representative to guide you through these challenges. Together we will navigate the storm and find the best solutions to minimize the damage and satisfy your customers’ needs.
Section 301 Investigations of Vietnam
On October 8, 2020, USTR initiated Section 301 investigations into Vietnam’s acts, policies and practices related to (1) the importation and use of illegal timber and (2) currency valuation. These investigations could result in tariffs, quotas, or other restrictions on imports from Vietnam if consultations do not yield a successful resolution.
Importers of wood products from Vietnam in particular could be affected by any such restrictions. These and other importers now have until Nov. 12 to submit comments on the issues being examined in these investigations.
For assistance preparing and submitting comments, or additional information on the potential impact of these investigations, please contact Nicole Bivens Collinson or Kristen Smith.
For more information, contact your BOC Representative.
China Tariff Refund Lawsuit for List 3 and 4A Goods
There is still an opportunity for importers who have not yet filed a lawsuit in the Court of International Trade to challenge the Section 301 tariffs on List 3 and 4A for goods originating from China.
There is an argument that there was no sufficient time to file a claim for List 3 based upon the September 24, 2020 deadline. If interested importers are urged to file a claim as soon as possible. The claims for List 4A have a deadline of August 19th, 2021, but importers are encouraged to file at their earliest convenience.
If you have any questions or interest please contact your local BOC representative and they will be able to put you in touch with one of our partners to assist with your filing.
BOC Bullets to Help the USA Importer During the Current Shipping Crisis
After another challenging shipping week, here are some tips and market updates we wanted to share to help our customers deal with this current shipping crisis.
1. Instruct your factories in Asia to inspect all empty containers very closely when picking up and loading for any holes or signs of damage. Your vendor should follow the 7 point inspection guidelines (https://www.cbp.gov/sites/default/files/documents/7_pcic.pdf) and take detailed pictures of the inside and outside of the container, including capturing the container number in the photos. This inspection process is your best protection to help your cargo from getting water damage. With a shortage of containers, many Container Yards are releasing lower grade containers that might not be seaworthy and leak water on your cargo.
2. Consider using the premium ocean services for urgent cargo. We see even spot rate ocean cargo (which generally gets priority) being rolled at origin or stuck at transshipment ports for one to three weeks. In the past 45 days, the ocean carriers are rolling approximately 1 of 3 all containers in the Transpacific market.
3. Plan for 1-2 week delays of availability for arriving cargo to the USA because of record volumes, lack of chassis, slow unloading and loading of vessels at the congested origin and destination ports, and extreme global trucking shortages. We have seen some USA truckers refuse to accept delivery orders from their regular USA import customers for 2-4 weeks. The delays unloading the vessels arriving LA/LB are being exacerbated by a shortage of stevedores at LA/LB terminals due to additional gangs being assigned for each shift because of the full ships, larger ships and extra loaders being deployed. One notable volume record was the Port of LA reported their largest container month ever in September – 888,625 TEU – and no blank sailings.
4. Ship essential goods early, well before the Chinese New Year holidays begins on February 12th. Door to door delivery times are expected to continue to be delayed well into 2021, and Asian bookings remain very strong with November space almost entirely consumed. We are also seeing Shipping Orders (SO’s) being released very late by the ocean carrier just prior to vessel cutoffs. The ocean carriers are intentionally delaying the SO’s to enable them to capture as much as possible of the higher-priced premium cargo and delay shipping the lower-priced fixed cargo to maximize their profits. Overall, market capacity is continuing to worsen. Due to lack of charter vessels and equipment shortages, the carriers so far have deployed an inadequate amount of TP November extra loaders with COSCO only adding three sweepers in weeks 45, 46, and 47 to USWC and Maersk providing some limited relief with Suez service transshipping over Europe to the USEC.
5. Prepare for higher air freight costs in the coming weeks. There are substantial rises in air freight prices on major lanes out of China and other parts of Southeast Asia, as surges in demand meet continuing constrained capacity due to Covid’s devastation of the PAX market. The simultaneous deluge of air freight caused by the launches of new versions of products(Apple’s 5G phones, Microsoft’s Xbox, Sony’s PlayStation, etc.), growing demand for 2nd wave PPE items, and a final push to move holiday gifts creates the perfect storm.
Please contact your BOC representative to help you with these issues or any other specific problems. We will get through this crisis together.
USEC Golden Week Blank Sailing Contingency Plans
Please be informed that during the upcoming China’s National Golden Week period in October 2020, CMA CGM will make the following service adjustments.
Cargo for the impacted services will be rolled to the next week’s sailing or shifted to the alternative services listed.
Below please find the CMA CGM Blank Sailing Program:
PEX 3 – Cargo originally booked on 0PG7XE1MA will be delayed to 0PG7ZE1MA
VESPUCCI – EVER LEADING (OVC7FE1MA) – ETD Qingdao 06-OCT
1. All Boston cargo will load on next Vespucci voyage – EVER LIBERAL (0VC5PE1MA) – ETD Qingdao 13-OCT: ETA delay 7 days
2. Qingdao / Ningbo / Pusan and Pusan transshipment cargo to Charleston to be routed via Hong Kong & will load on the South Atlantic Express – OOCL BRUSSELS (0UP7PE1MA) – ETD Hong Kong 01-OCT: ETA delay 2 days
3. Shanghai cargo to Savannah / Charleston / New York will load on the South Atlantic Express – OOCL BRUSSELS (0UP7PE1MA) – ETD Shanghai 06-OCT
• ETA New York: advance 10 days
• ETA Savannah: delay 2 days
• ETA Charleston: delay 2 days
4. Qingdao / Ningbo / Pusan and Pusan transshipment cargo to Savannah / New York will switch to the Manhattan Bridge Service – COSCO FORTUNE (0MB71E1MA) – ETD Qingdao 04-OCT
• ETA New York: advance 7 days
• ETA Savannah: delay 7 day
Blanking Announcement for Chinese National Holiday On Transpacific Services
Due to expected slow volume pick-up in connection with the upcoming Chinese National Holiday (Golden Week), Maersk endeavours to balance our network to match reduced demand in October. Below you will find a summary of void sailings on Transpacific services. We aim to minimize the impact to our customers by securing reliable alternative routings.
Far East Asia to North America
North America to Far East Asia
Eagle Express 1 Void Sailing
Please be informed of the following void sailing that will be implemented on our Asia-North America service in September due to scheduled vessel dry dock.
To minimize impact to our customers, alternative sailings are available for your cargo originally intended on the advised void sailing.
Contingency plan for EX1 – PRESIDENT WILSON
• Cargo from Shanghai / Yangtze area / Indonesia to load on vessel voyage CMA CGM ROSSINI (0TXSUE1MA) ETA Shanghai 23-SEP-2020
• Cargo from Qingdao / Lianyungang / Dalian / Xingang / Ningbo / Philippines / Japan / Korea to load on vessel voyage CMA CGM ROSSINI (0TXSUE1MA) ETA Busan 26-SEP-2020
2020 GOLDEN WEEK BLANK SAILINGS – ASIA-NORTH AMERICA NETWORK – UPDATE
The following announcement supersedes our announcement of 8 September 2020 about Asia-North America network blank sailings.
MSC Mediterranean Shipping Company plans to exclude sailings during Golden Week holiday on its Asia-North America Network due to the anticipated slowdown in demand during and after this period.
The change will help us to match capacity with the expected weaker market demand for shipping services. However, you may continue to place bookings as usual as we are arranging alternate routings.
Our blank sailing programme will start as from week 40 as per the below:
ASIA TO U.S. EAST COAST WEEK 40 OMISSION AMBERJACK service Blanking voyage 1E, ETA Tianjin 01.10.2020 To and Via: Kingston, Savannah, Charleston, Jacksonville, Wilmington All shipments from Tianjin, Qingdao, Ningbo, Shanghai, Busan will be served via alternative services.
ASIA TO CANADA AND U.S. WEST COAST WEEK 41 OMISSION MAPLE service Blanking voyage UM41N, ETA Nansha 09.10.2020 To and Via: Prince Rupert, Vancouver All shipments from Nansha, Yantian, Shanghai, Busan, Yokohama will be served via alternative services.
WEEK 43 OMISSION SEQUOIA service Blanking voyage US43N, ETA Yantian 20.10.2020 To and Via: Long Beach All shipments from Yantian, Ningbo will be served via alternative services.
U .S. EAST COAST TO ASIA WEEK 45 OMISSION AMBERJACK service Blanking voyage 10W, ETA Savannah 04.11.2020 To and Via: Busan, Tianjin, Qingdao, Ningbo, Shanghai All shipments from Savannah, Charleston, Jacksonville, Wilmington, Kingston will be served via alternative services.
CANADA AND U.S. WEST COAST TO ASIA WEEK 44 OMISSION MAPLE service Blanking voyage UM44S, ETA Prince Rupert 27.10.2020 To and Via: Nansha, Yantian, Shanghai, Busan, Yokohama All shipments from Prince Rupert, Vancouver will be served via alternative services.
WEEK 46 OMISSION SEQUOIA service Blanking voyage US46S, ETA Yantian 06.11.2020 To and Via: Yantian, Ningbo All shipments from Long Beach will be served via alternative services.
Golden Week Vessel Idling Program Trans-Pacific Service
(San Francisco, CA)…As a result of reduced demand due to Golden Week holiday we will adjust our network to match expected market demands. Below you will find a summary of void sailings:
In light of the above void sailings, the following return voyages will also be voided.
Commercial Invoice Requirements
Requirements of a commercial invoice, bill of sale, receipt that must be provided when filing entry documents for Customs clearance
A commercial invoice should contain enough information for a Customs Officer to determine if the goods being imported are admissible, and if so, the correct classification and valuation of goods. For further guidance, see the Harmonized Tariff Schedule (HTS).
For commercial shipments, the invoice accompanying the importation should include a statement certifying that the goods qualify as originating goods.
There is no specific format for an invoice (see 19 CFR 141.85). However, regulations do provide what information should be included on an invoice.
At a minimum, an invoice should include the following:
- Detailed description of each item, in English (for US entry)
- Quantity of each item, along with weight and measure
- Purchase price of each item, in the currency of the purchase (Ideally, provide the value in origin and destination currency)
- If the items are shipped otherwise than in pursuance of a purchase, then the Value of each item
- Terms of sale
- Country of Origin (where the item was made) of each item
- Where each item was purchased
- Name and address of the business or person selling the merchandise
- Name and address of the business or person buying the merchandise (note if different from the importer)
- The complete name and address of the business or person the goods are being shipped to
The importer will need to present the commercial invoice to Customs when clearing their goods.
For further guidance on US requirements, see 19 CFR 141.86, contents of invoices and general requirements.
NOTE: Every country has their own specific requirements for commercial invoices
21 Drydock Ave Suite 520W Boston, MA 02210 Phone: 617.345.0050 Fax: 617.345.9595
Hong Kong Normalization – Transition Period Extended through November 9, 2020. Executive Order 13936
This notice is to inform the trade that the 45-day transition period for compliance with the President’s Executive Order (EO) on Hong Kong Normalization has been extended for an additional 45 days through November 9, 2020. Additionally, this notice updates the guidance provided in CSMS# 43633412, issued August 11, 2020.
On July 14, 2020, the President issued Executive Order 13936 dealing with Hong Kong Normalization, and suspended, among other things, the application of section 201(a) of the United States-Hong Kong Policy Act of 1992 to certain statutes, including 19 U.S.C. 1304. On August 11, 2020, CBP issued a notice in the Federal Register (85 FR 48551) notifying the public that, unless excepted from marking, goods produced in Hong Kong must be marked to indicate that their origin is “China” for purposes of 19 U.S.C. 1304. The position set forth in the notice became applicable as of July 29, 2020; however, CBP granted a transition period until September 25, 2020 for importers to implement marking consistent with the notice.
Additional 45 days for informed compliance
In an effort to allow importers ample time to comply with EO requirements for goods produced in Hong Kong to be appropriately marked with the origin of “China”, CBP is extending the transition period for an additional 45 days, through November 9, 2020. During this period, CBP personnel from the Ports of Entry and Centers of Excellence and Expertise (Centers) should not take any enforcement actions (i.e., marking notices, marking penalties, etc.) on goods produced in Hong Kong for purposes of 19 U.S.C. 1304. Centers and Ports of Entry should take measures to inform accounts and importers of these new marking rules for Hong Kong set forth in the EO.
This change in marking requirements does not affect country of origin determinations for purposes of assessing ordinary duties under Chapters 1-97 of the HTSUS or temporary or additional duties under Chapter 99 of the HTSUS. Entry summary procedures also have not changed. Given that this new rule only applies to marking requirements under 19 U.S.C. 1304, filers should continue to file their entry summaries and submit payments for applicable duties, taxes and fees in accordance with current regulations and policies.
Should you have any questions regarding this notice, please contact the Trade Agreement Branch at email@example.com
- GUIDANCE: New Marking Rules for Goods Made in Hong Kong – Executive Order 13936 (CSMS #43633412, August 11, 2020)
- FAQ – Guidance of Marking of Goods of Hong Kong – EO 13936
- Country of Origin Marking of Products of Hong Kong (85 FR 48551, August 11, 2020)
- The President’s Executive Order on Hong Kong Normalization (85 FR 43413, July 14, 2020)
- 1997 FR Hong Kong Customs 97-14662 (62 FR 30927, June 5, 1997)
US CBP: Country of Origin Marking of Products, Hong Kong