COVID-19 Latest Updates

Import Disaster Relief, Implementing the China Trade Deal, and Tanking Rail Volumes

By April 14, 2020 No Comments

U.S. Customs

U.S. Customs and Border Protection (CBP) if giving a break to those who are helping in the fight against COVID-19. In a recent statement, they announced that CBP “may not remit the duty on the entry of any good imported for disaster relief.” Private groups or individuals must provide a letter of documentation from the charity to which imports are donated, and the charity’s status must be verified through the IRS. If you or your business are importing goods to donate, let us know. For help determining if your imports fall into this category, get in touch with a Navegate Customs expert.

 

Trucking

Offering even more leniency in the effort to keep essential goods moving, the Federal Motor Carrier Safety Administration (FMCSA) has released an emergency declaration, extending initial waivers of things like Hours of Services restrictions until May 15, or until the presidentially-declared COVID-19 national emergency is lifted. Many regulation changes were added in this new declaration, including the addition of raw materials for essential goods to the list of freight that falls under the emergency rules. The declaration remains vague in some areas, but the FMCSA’s FAQs offer some help.

 

U.S. Trade

China’s ambassador to the U.S. stated that, despite the disruptions caused by COVID-19, China is still working to implement Phase One of the trade deal. Phase One, signed in mid-January, includes an increased commitment to purchase American goods by China and improves intellectual property protections for U.S. companies. Conversely, the U.S. has promised to relax tariffs on Chinese goods. The full text of the Phase One agreement can be found here. 

Although ports worldwide have reported approaching or maxing out their warehouse storage capacity, the Port Authority of New York and New Jersey (PANYNJ) has said it isn’t concerned about a similar scenario playing out at NY-NJ. In a survey of 60 regional warehouse operators, roughly 90% stated that they believe they have enough capacity to handle an influx of cargo in April and May. 

 

Rail 

North American intermodal rail volumes hit their lowest point in nearly a decade this week. Some intermodal leaders expect a quick turnaround in this trend, speculating that panic buying caused many shippers to temporarily prioritize speed over price, but as buying trends settle, many expect a reversal. In the meantime, Class I railroads will continue to take a heavy hit, costing the industry some $9 billion in revenue. According to the JOC, last week’s volume will be the weakest in North America since 2013 in a best-case scenario and lowest since the Great Recession of 2008–09 in a worst-case scenario.

 

Ocean 

CMA CGM has rolled out a “Delay in Transit” option much like Mediterranean Shipping Co.’s “Suspension of Transit” program, that will allow shippers to store import containers at nine hubs around the world. Shippers can avoid expensive detention and demurrage charges through these programs, as the carriers allot space on their property for storage. 

As blank sailings continue to accumulate, experts predict that the size of the idle containership fleet to twice the size seen during the 2009 financial crisis. This trend mirrors the large-scale parking of planes by passenger and cargo airlines as demand continues to lag. 

 

Carriers

Morgan Stanley survey results indicate that a small margin of carriers expects the impact of COVID-19 on transportation markets will be lessened in 3 months. Of the over 400 carriers, 83% report “medium” or “high” impacts, while 74% those impacts to remain in 3 months’ time, suggesting that we may be glimpsing the peak of disruptions.