COVID-19 Latest Updates

Post-Thanksgiving Congestion, Changes to HTS Codes, and Two Mainline Derailments Cause Delays

By December 3, 2020 No Comments

Ocean  

Ocean carrier space is still getting worse. Space is completely booked out for the rest of the year, and space is filled up until the middle of January. Customers can work around these capacity issues if they book on a premium service that some carriers have begun offering. These premium services, however, will cost nearly $2-3,000 more than usual, and shipments would still take a few weeks to arrive on time. Some areas in China are also refusing shipments because of the tight capacity. It is expected that these refusals will last until the Chinese New Year and hopefully stop in late February. Because of these refusals, delays are expected. 

Some ocean carriers are posting delays of 30-40 days after the Thanksgiving holiday. Some carriers were closed for a few days due to the Thanksgiving holiday, and when they came back from their respite, they were overwhelmed with delays. As the holidays continue throughout December, delays of 60-90 days are anticipated. It is also recommended to book four weeks in advance in order to receive shipments in a reasonable time. 

The Federal Maritime Commission (FMC) is monitoring three major shipping alliances. Due to market fluctuations, the FMC is requiring three major global shipping alliances — 2M, THE Alliance, and OCEAN — to provide monthly carrier-specific trade data rather than quarterly. The FMC’s order comes as global regulators increase their scrutiny of container lines, citing that these carriers have “the greatest potential to cause or facilitate adverse market effects.”

Customs  

President-elect Joe Biden has no immediate plans to remove tariffs on China. The President-elect said he would not act immediately to remove the 25% tariffs that President Trump imposed on about half of China’s exports to the United States. Instead, Biden wants to conduct a full review of the existing agreement with China and consult with traditional allies in Asia and Europe to develop a strategy. 

France moves forward with digital taxes on U.S. technology companies. France is now collecting a new digital service tax from some U.S. technology companies, such as Amazon and Facebook. Officials in France claim that some of these companies pay too little in taxes on the profits they make in countries, which is why the country decided to impose these digital taxes. 

The U.S. International Trade Commission (USITC) seeks comments on modifications to the U.S. Harmonized Tariff Schedule (HTS). Comments will be open until December 14th. Some of the changes in these HTS codes pertain to classification numbers and changing the wording to modernize the tariff book. These changes will go into effect by January of 2022, so customers will have to update some of their systems by then. You can view the proposed HTS changes in a published USITC document online

Ports 

The Orient Overseas Container Line (OOCL) will implement surcharges due to congestion. The carrier has said that it will implement an “emergency intermodal surcharge” of $350 per dry container at U.S. West Coast ports. The surcharge applies to truck deliveries from the ports of Los Angeles and Long Beach, Oakland, Seattle, and Tacoma. However, if shippers identify a specific trucker, they can be exempt from the fee.

The port of Qingdao in China has stopped taking freights. Because of congestion and capacity issues, the port of Qingdao in China has stopped taking freights, which could be an indication that more ports in the area will do the same. It is advised that customers should keep an eye out for these instances so they can plan accordingly. If you need help navigating these issues, don’t hesitate to reach out to one of our Freight Experts

Air

Air freight rates remain stable. Air rates seem to not be increasing because volume is dropping. This drop in volume is probably because there aren’t as many booking requests at the moment because of less demand. Therefore, fewer delays are expected, but still likely to continue until after the Chinese New Year. 

Trucking 

Trucking capacity remains tight as the holiday season continues. There seems to be no sign of improving capacity, even after the Thanksgiving holiday. As the Christmas tree season continues, trucking capacity will also remain tight. Areas like northern Wisconsin, West Virginia, and southern Oregon will be areas that will have tight capacity, with new areas that will arise as the season continues. Therefore, delays are expected.

Other

After two mainline derailments, Norfolk Southern works to restore service. These derailments occurred near Cleveland, OH, and Hattiesburg, MS. Norfolk Southern has restored services in the Cleveland area, but customers with traffic moving through the area can expect delays of up to 48 hours. In Mississippi, Norfolk Southern is still working to restore services, but delays of up to 48 hours are also expected. As the winter season continues, customers should be aware of these types of instances that may cause delays for shipments.