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Ship Loses Containers, Ports Strive to Relieve Congestion, and More Critical Capacity Issues

By December 10, 2020 No Comments

Ocean  

ONE ship loses nearly 1,900 containers while en route to Long Beach, California due to violent weather. This loss was the largest loss of containers at sea in more than seven years and another reminder of how severe storms can affect shipments. The containers included items like fireworks, batteries, and liquid ethanol. The ship is due to arrive in Kobe, Japan this week where a full damage and assessment will take place, and it is expected that the vessel will not arrive in Long Beach, California for at least two weeks. It also recommended that customers continually check that they bought marine insurance to protect themselves from these types of instances in the future.  

Ocean carrier space continues to be at capacity. Space is completely booked through the end of the year and into January. To work around these capacity issues, customers can book a premium service offered by some carriers. Premium services will cost approximately $2-3,000 more than usual and shipments will still take a few weeks to arrive.  Due to the tight capacity, some areas in China are refusing shipments, which is increasing delays. These refusals are expected to continue into February, hopefully stopping after the Chinese New Year. 

As the holiday season continues, some ocean carriers are posting major delays. 60-90 day delays, up from the post-Thanksgiving 30-40 day delays, are anticipated as we continue further into the holiday season. To receive shipments at a reasonable time, it is recommended to book four weeks in advance.

Customs  

Some U.S. companies are unable to receive their Section 301 China tariff refunds. These companies are unable to receive their refunds because the Office of the U.S. Trade Representative (USTR) did not grant product exclusions until after import entries were liquidated. As a result, a coalition of companies and trade associations is urging lawmakers to enact legislation that would refund all owed Section 301 China duty exclusions, even on liquidated import entries. It is recommended to contact your Representative or Senators if your business is affected by these actions. 

HTS updated to reflect removal of some Thai products from GSP treatment. The Harmonized Tariff Schedule has been updated to reflect a recent decision by President Trump to suspend hundreds of millions of dollars in trade preferences for Thailand. This decision was based on lack of sufficient progress providing the United States with equitable access to the pork products market. 

Generalized System of Preferences set to expire at the end of the year. The GSP provides duty-free treatment for thousands of imports from hundreds of countries and will expire by December 31st, 2020. If not renewed before then by Congress, certain goods may be subject to tariffs starting at the beginning of the new year. Nearly 300 companies and trade organizations are urging Congress to extend GSP to avoid these tariffs, potential layoffs, hiring freezes, wage cuts and benefits, and more. If you need any help navigating these changes don’t hesitate to reach out to one of our experts.

Ports 

Los Angeles and Long Beach terminals strive to relieve congestion. As the ports continue to see record import volumes and be congested beyond capacity, it is expected that this increase will continue well into 2021. In efforts to ease congestion, the Long Beach port is working with terminal operators to ensure that 50% of all trucker visits to the ports involve dual transactions. To help further decrease congestion, chassis providers are piloting a temporary stop/start near-dock site, giving truckers the option to drop off empty containers and bare chassis awaiting to return to Asia.

Air

As volume drops, air freight rates remain stable. Fewer delays are expected because of the drop in volume and booking requests, but still likely to continue until mid-February, after the Chinese New Year. 

Trucking 

As we continue into the Christmas tree season, trucking capacity is very tight. Delays remain to be expected as areas like southern Oregon, northern Wisconsin, and West Virginia will have limited capacity. After the holiday season, some rebalancing is expected.