South Korea to penalize 23 carriers for alleged predatory pricing and collusion. South Korea’s Fair Trade Commission fined 23 domestic and foreign shipping businesses a total of roughly $81 million for conspiring to fix freight costs between 2003 and 2018. The action follows the FTC’s recent revelation that it was considering fines of up to 10 times the amount levied today for violations of Korea’s Fair Trade Act.
Trends in Transpacific rates and market data. Carriers have extended existing FAK pricing through Feb. 14, and some may be valid until the end of Feb. Meanwhile, they are constructing a rolling pool to mitigate the effects of factory closures over the Chinese New Year holiday. The additional capacity has put pressure on spot markets, causing spot prices to fall from their peak. Some small forwarders, eager to capitalize on the windfall, are now lowering their prices in order to lure more volume from their competitors. The cancellation of a booking will result in a shortfall and a large cancellation cost, as well as several complaints from carriers. COVID-19 and its new variants, on the other hand, will continue to disrupt port operations and labor capacity as we go into 2022, keeping capacity constrained and rates high. Ref: HLS Transpacific Market Report Wk 03.
Non-U.S. citizens entering U.S. land border ports must show proof of COVID vaccination. Beginning Jan. 22 at 12:01 a.m. (local time), the Department of Homeland Security (DHS) will require non-U.S. citizens seeking entry into the U.S. through land ports of entry and ferry terminals at the U.S.-Mexico and U.S.-Canada borders to be fully vaccinated for COVID-19 and provide related proof of vaccination. Customs and Border Protection (CBP) will enforce the rule as COVID-19 instances continue to climb across the country, according to DHS. These new restrictions will apply to non-residents of the U.S. who are traveling for both necessary and non-essential purposes. They will not apply to U.S. citizens, LPRs, or nationals, according to DHS. For more details, see this DHS fact sheet.
Rep. Blumenauer introduces bill to tighten de minimis. Rep. Earl Blumenauer (D-OR), chairman of the House Ways and Means Trade Subcommittee, announced new legislation that he claims will strengthen U.S. international trade import laws by preventing non-market economies and goods from “exploiting” the de minimis threshold, which allows imports worth less than $800 to enter U.S. commerce without paying duties, taxes, or fees. Blumenauer observed that the $800 de minimis barrier is used by more than two million parcels entering the United States every day. The bill’s full text can be found here.
Changes to trade user responses to U.S. Customs and Border Protection (CBP) Forms 28, 29, and 4647 in the works. CBP will make changes to the automated procedure for assessing entry summaries on Jan. 29. While the bulk of these changes primarily affects CBP users, trade users may notice a difference in how replies to CBP Forms 28, 29, and 4647 (issued by CBP through the ACE Portal) can be submitted until the new ACE forms application is ready in Apr. 2022. Trade users will no longer be able to submit replies directly through the ACE Portal from Jan. 29, and electronic responses will only be available through DIS (via EDI or email submission). When the new ACE forms application is released in Apr. 2022 (and may be accessed), trade users will be able to immediately reply to CBP Forms 28, 29, and 4647 using the new application. If you have any questions regarding these changes, please email [email protected].
Phase 1 of ACE Portal Modernization to begin on January 22. On Jan. 22, U.S. Customs and Border Protection (CBP) will launch Phase 1 of the ACE Secure Data Portal modernization (ACE Portal). These upgrades will include a new login screen, a redesigned home page, and improved account information display and editing tools. Users will take a few simple steps on the new login screen to generate a new username and password and link their existing ACE Portal access. Users will have one month to link their accounts and switch to the new login page. Users will no longer be able to use the legacy login page after Feb. 20. Please visit https://www.cbp.gov/trade/automated/ace-portal-modernization for further details.
Port of Vancouver delays ban on old trucks due to supply chain issues. After a year of disruption in British Columbia, and supply-chain congestion, the port authority in Vancouver, B.C. has concluded that now is not the time to implement a long-planned ban on older diesel vehicles. The port launched the “Rolling Truck Age Program” in 2015, with the goal of prohibiting trucks older than 10 years from entering its gates. The port’s goal was to minimize dangerous NOx and particulate matter emissions, which have a localized impact on public health. Because new trucks are becoming increasingly difficult and expensive to get, the port has decided to postpone the program’s launch date, which was originally scheduled for Feb. 1.’
Covid clogs one of China’s busiest ports, causing ship delays. Containers are piling up at China’s already overburdened Shenzhen port as congestion in the U.S. rippled back to Asia, delaying ships picking up products from the industrial and technological hub. Southern Chinese manufacturers are presently making a last-ditch effort to ship out products before the Lunar New Year holiday, which begins next week, with the People’s Daily reporting that trucked volumes entering Shenzhen’s Yantian terminal on Jan. 13 were almost 30% higher than Dec. levels. Ships arriving at the Yantian terminal are delayed on average by seven days, and the number of ships arriving from Europe and the U.S. has dropped by more than 40% in the last two weeks.
Ports of LA- LB to ‘revisit’ container dwell fee on January 21. The ports of Los Angeles and Long Beach have continued to postpone their “Container Dwell Fee,” saying in a news release that they will “revisit” its probable implementation on Jan. 21. Since the fee was announced on Oct. 25, 2021, the two ports have reported a combined 55% decrease in aged cargo on the docks. So far, the executive directors of both ports have resisted implementing the tax based on repeated weekly “monitoring” of their container throughput statistics.
Airlines cancel some flights in preparation of 5G launch in U.S. Two of the country’s largest cellular carriers agreed not to activate some 5G connections near airport runways, a temporary compromise to address air-safety concerns that have already forced overseas airlines to cancel several U.S.-bound flights. AT&T Inc. and Verizon Communications Inc. accepted the new limitations, ending a months-long standoff between the cellular carriers and aviation regulators, who had agreed to curtail flights due to worries about the impact of 5G signals on aircraft instrumentation.
Delta Cargo adjusting domestic capacity. Delta Cargo is modifying domestic capacity temporarily to “guarantee that we can satisfy” customer service performance demands. The business said that it will be “paring capacity” on narrowbody flights in major domestic hub operations from Jan. 17 to Feb. 15 at specified periods of the day. According to Delta Cargo, international and domestic widebody flights would be unaffected.
New vaccine regulations take effect at Canadian border. New, stricter COVID-19 vaccine restrictions went into effect on Jan. 15 for anyone crossing the border from the U.S. into Canada. This includes truck drivers and other critical jobs. Similar rules are anticipated to go into effect in the U.S. on Jan. 22 when the Department of Homeland Security enforces its rules to limit the spread of the coronavirus and urge more individuals to be vaccinated.
China attempts to restrict spread of Covid-19, resulting in major bottleneck. Thousands of trucks transporting loads of produce have been stalled at border crossings since Chinese officials tightened gate operations in an effort to limit Covid-19 outbreaks. The backlog is the result of Beijing’s zero-Covid policies, which have put certain cities on lockdown, delayed operations at major ports, and grounded air transport yet again. They are also interfering with trade routes across its land borders, which are vital to the region’s farmers and merchants. Thousands of trucks carrying dragon fruit, jackfruit, watermelons, and other food have been held up at the border in neighboring Vietnam for weeks.
Diesel prices up 6.8¢ to $3.725. According to Energy Information Administration (EIA) statistics posted on Jan. 17, the national average price of diesel increased for the second week in a row, rising 6.8 cents to $3.725 per gallon. Diesel prices have climbed 11.2 cents per gallon on average in the last two weeks after falling 12.1 cents in the preceding seven. A gallon of fuel now costs $1.029 more than it did in 2021 at this time. Gasoline prices rose by 1.1 cents to a national average of $3.306 per gallon. In its weekly poll, the EIA reported that fuel prices climbed in all ten areas.
Robin Hutcheson to Head Federal Motor Carrier Safety Administration (FMCSA). Transportation Secretary Pete Buttigieg announced the appointment of Robin Hutcheson as Deputy Administrator of the FMCSA on Jan. 19. Hutcheson, as deputy administrator, will serve as the agency’s acting administrator. Hutcheson has been the Department of Transportation’s deputy assistant secretary for safety policy for the past year. She takes over for Meera Joshi, who left the agency in January to become New York City’s deputy mayor for operations.
Rail unions begin strike preparations. Following the announcement of the Burlington Northern Santa Fe Railway’s “Hi-Viz” attendance policy, members of the Brotherhood of Locomotive Engineers and Trainmen (BLET) and the Transportation Division of the International Association of Sheet Metal, Air, Rail, and Transportation union (SMART-TD) initiated steps to strike on Jan. 13.
Supreme Court halted OSHA’s Emergency Temporary Standard (ETS). On Jan. 13, the U.S. Supreme Court suspended OSHA’s ETS, which required employers with 100 or more workers to develop a mandatory vaccination program or have unvaccinated employees submit to weekly COVID-19 testing and wear a mask at work. The ETS entered into effect on Jan. 10, but the judgment prevents it from being enforced until then. The Supreme Court determined that, while OSHA has the jurisdiction to regulate occupational health and safety, COVID-19 extends far beyond the workplace. As a result of this decision, OSHA will be unable to enforce the ETS, and companies will be exempt from compliance.
Army Corps of Engineers to get $14 billion to aid with supply chain management. The Biden administration announced the allocation of $14 billion to the Army Corps of Engineers to support 500 projects, with a focus on supply chain issues and climate change. The investment is mostly a result of President Joe Biden’s $1 trillion infrastructure package, and the government is attempting to demonstrate how the projects would reduce supply chain backlogs. According to a White House information sheet, three specific projects are linked to eliminating supply chain bottlenecks by making it simpler to transfer commodities.
Automakers reduce manufacturing in Japan due to increase in omicron. The newest wave of coronavirus infections in Japan has further hampered Toyota Motor and the country’s major manufacturers’ production schedules. Toyota will halt operations at up to 21 production lines across 11 Japanese sites for four days, beginning Monday. The carmaker was forced to close due to an increasing number of sick personnel on its production floors and among its suppliers. Honda Motor anticipates passenger vehicle output at its Suzuka factory in Mie Prefecture to be 10% lower than previously forecast. Honda’s Yorii factory in Saitama Prefecture has already decreased output by 10% for this month. The facility is slated to reopen to the public next month. Nissan Motor reduced output in December. The firm is hard at work acquiring components to restore output. Since Dec., Suzuki Motor has been operating at around 70% of the capacity predicted at the start of the fiscal year.
Federally regulated supply chain for Covid-19 supplies is growing. The Biden administration is planning to make 400 million N95 masks available across the country as part of Washington’s response to a statewide rise in Covid-19 cases. The masks will be accessible at pharmacies and community health centers late next week, obtained from the Strategic National Stockpile, a medical-equipment safety net created in the early months of the pandemic. This week, the government also began accepting orders for at-home rapid testing.
Despite record sales, IKEA’s carbon footprint shrunk from pre-pandemic levels. IKEA, the world’s largest furniture retailer, said that it was on pace to become climate positive by 2030, despite record sales, as its yearly carbon emissions dropped 6% from pre-pandemic levels. Inter IKEA said that emissions in the value chain – from raw material manufacturing to consumer use and disposal of products – totaled 26.2 million tonnes of CO2 equivalent in the year to Aug., compared to an upwardly revised 27.9 million in fiscal 2019, when emissions dipped for the first time.
International Energy Agency (IEA) predicts oil demand to exceed pre-covid levels in 2022. According to the IEA, global oil demand will exceed pre-pandemic levels this year due to rising Covid-19 vaccination rates and the fact that subsequent virus waves have not been strong enough to necessitate a return to harsh lockdown measures. The IEA raised its oil demand growth prediction for the following year by 200,000 barrels per day, to 3.3 million barrels per day, in its monthly oil market report.