COVID-19 Latest Updates

Nestlé To Quit Selling Pet Food, Coffee, Chocolate in Russia, U.S. Reinstated 352 Product Exemptions From China Tariffs, After Arbitration Agreement, Canadian Pacific To Resume Operations

By March 24, 2022 No Comments

Ocean  

FMC looking into big liners and ‘pop-up’ carriers for U.S. export service. The U.S. Federal Maritime Commission (FMC) will audit 16 ocean carriers in two separate cases regarding their U.S. export operations, a group that includes five “pop-up” carriers that have recently appeared in the trans-Pacific market in response to growing import demand, according to the FMC. The FMC said Monday that it will have meetings with 11 major carriers, including CMA CGM, Cosco Shipping, Evergreen Marine, Hapag-Lloyd, HMM, Maersk, Mediterranean Shipping Co., Ocean Network Express (ONE), Yang Ming, OOCL, and Zim Shipping.  The audits are part of the FMC’s continuing investigation of the various costs that ocean carriers charge shippers for container usage, which began in July 2021.

Customs

U.S. reinstated 352 product exemptions from China tariffs. The U.S. Trade Representative’s (USTR) office said on Wednesday that it had reinstated 352 expired product exclusions from U.S. “Section 301” tariffs on Chinese imports, falling well short of the 549 exclusions that it had previously considered.  The reintroduced product exclusions will be enforced retroactively from Oct. 12, 2021, and will last through Dec. 31, 2022, according to USTR. They cover a wide spectrum of the $370 billion in Chinese goods that U.S. President Donald Trump imposed with punitive tariffs ranging from 7.5% to 25%. Read the official notice issued by USTR here.

What to expect from incoming Russian imports, according to CBP. During an Automated Commercial Environment (ACE) biweekly call on March 17, Customs and Border Protection (CBP) informed members of the trade that the agency is imposing a hold on all items covered by the recently announced U.S. sanctions against Russia. If goods are held, CBP will release them under the OFAC General License 17 upon receipt of documentation that the shipment was under contract before March 11, 2022, and that the products were received prior to March 25. Importers can avoid the hold by giving such proof to CBP ahead of time, according to CBP Director of Cargo Security and Controls James Swanson. He stated that CBP wants to keep freight flowing, particularly perishable seafood. Beginning March 25, any products subject to the embargo will be denied entry (even if they were under contract in time). This Treasury Department Office of Foreign Assets Control (OFAC) FAQs provides a list of HTS codes covering restricted products (seafood, alcoholic beverages, and non-industrial diamonds). More information regarding GL17 may be found here.

U.S., U.K. reach trade agreement to eliminate tariffs on British steel and aluminum, American whiskey and Levi’s. The U.S. and the U.K. reached a trade deal on Tuesday that would eliminate U.S. tariffs on British steel and aluminum, while the U.K. will eliminate levies on American whiskey, motorbikes, Levi’s jeans, and cigarettes. Officials in the Biden administration stated that the agreement with the U.K. Would allow the United Kingdom to transport “historically-based sustainable volumes” of steel and aluminum goods to the United States without levies enforced by the previous Trump administration.   

Ports

Ocean Shipping Reform Act approved by Senate committee.  A Senate panel in the U.S. passed legislation to improve the flow of freight at the country’s ports. The Ocean Shipping Reform Act was approved by voice vote by the Commerce Committee on March 22. The bill is now being considered by the entire Senate. The bill, sponsored by Senators Amy Klobuchar (D-Minn.) and John Thune (R-S.D.), addresses the Federal Maritime Commission’s function. It would force carriers to provide certain information to the commission each quarter and would allow the commission to launch certain investigations, some of which would be tied to late fees. Among other factors, it would clear the way for the registration of shipping exchanges.

Air

China’s first cargo airport performed air freighter flight test. On Saturday, China’s first cargo airport in Ezhou, Hubei Province, completed its flight test, marking the country’s first trial of a new airport using an air freighter. In 2025, the new airport’s passenger throughput is expected to be one million, with cargo and postal throughput reaching 2.45 million tonnes. The airport is set to open to the public by the end of June this year. The airport will operate as an air cargo hub and will be equipped with two runway and taxiway systems, as well as a freight transfer center spanning about 700,000 square meters and a feeder airport for passenger transit.

Rail

After arbitration agreement, Canadian Pacific to resume operations. Canadian Pacific Railway (CP) announced it will recommence operations after reaching an agreement with the Teamsters Canada Rail Conference (TCRC) to settle their labor dispute through binding arbitration. CP and the Teamsters announced the agreement early Tuesday, a little more than two days after the corporation shut down its rail network to begin a work stoppage. Both the company and the union accused the other of triggering the work stoppage. The agreement seeks to avoid what was about to become yet another supply chain crisis. Shipments have been held up in both Canada and the U.S., and the ports of Vancouver and Montreal are likely to be severely congested.

Union Pacific’s new vegetation sprayer. The new spraying equipment, developed by Union Pacific (UP) personnel, strengthens the railroad’s ability to manage vegetation while also increasing efficiency across its entire 23-state network. UP’s fleet of hyrail vehicles historically sprayed vegetation from the tracks, frequently covering up to 30 miles of track on a good day. Although the trucks were useful, spraying from the rails usually meant the passage was closed to trains. The UP staff collaborated to develop a solution: instead of a hyrail truck, the new design incorporates technology pulling five water cars — and at the tail end, a sprayer vehicle targeting vegetation. The spray equipment works in combination with freight operations to keep the supply chain running smoothly.

China-Europe rail systems become latest source of supply chain contention. More than a million containers scheduled to travel the 6,000-plus miles of railway from Western Europe to Eastern China via Russia must now find alternate routes by sea, increasing prices and threatening to deepen the global supply chain instability. With Moscow’s war in Ukraine continuing, exporters and logistics companies delivering auto parts, vehicles, computers, and smartphones are attempting to avoid land routes that travel through Russia or the war zone.

Trucking

Fuel price increases across the country, along with ongoing congestion, have resulted in trucking companies instituting Emergency Fuel Surcharges. These fees vary by company and are affected by rising costs in local gas prices. In order to better understand these emergency surcharges and prepare for the increase in trucking fees, we recommend you contact a Navegate expert who can use their long-standing trucking expertise to efficiently route your cargo.

Other

Overland constraints disrupted supply chains, Shenzhen-Hong Kong freighter was introduced. The southern Chinese city of Shenzhen has established a freighter service to Hong Kong in response to a shortage of shipping capacity caused by Covid-19 outbreaks. According to Xinhua, the service would be offered six times a week on an SF Airlines B767 freighter. The inaugural flight of the new service, which is scheduled to continue through April, took off on March 19. Despite the fact that the two sites are fewer than 50 miles apart, ground movement between Hong Kong and Shenzhen has been severely hampered by rigorous Covid restrictions.

Alaska Airlines attempting to alleviate labor issues by offering double pay. Alaska Airlines is offering double compensation to flight attendants who pick up extra flights this spring in order to avert staffing shortages ahead of an even bigger increase in travel demand in the coming months. Airlines offered bonuses and up to quadruple pay to pilots and flight attendants late last year to help fill staffing gaps during the busy year-end holidays, but a surge of Covid omicron infections kept crew members from flying, resulting in hundreds of flight cancellations.

Investigators said no survivors of China’s biggest flight tragedy in more than a decade. After the second day of searching, Chinese officials reported late Tuesday that no survivors of a China Eastern Airlines jet accident had been recovered. The Boeing 737-800, carrying 132 passengers, crashed Monday afternoon as it traveled from Kunming to Guangzhou in China’s biggest flying accident since 1994. Communications with the crew could not be established in the last seconds before the airplane crashed, according to Chinese air disaster investigators at a news briefing on Tuesday. Update: Black box from China Eastern Airlines plane crash found.

Recent developments amid Russia-Ukraine crisis:

Sanctions beginning to affect Russia’s oil and gas industry. President Vladimir Putin’s war in Ukraine, and the ensuing wave of Western sanctions, are beginning to wreak havoc on Russia’s economic engine: its colossal oil-and-gas industry. The U.S. has banned the small amount of Russian oil that they buy, and the European Union is considering a ban. However, Western sanctions have so far avoided directly affecting the majority of Russia’s energy exports. Meanwhile, constraints imposed by the U.S. and the European Union have already deprived Russia of funds and advanced technologies needed to develop and sustain its aging fields.

Nestlé to quit selling pet food, coffee, chocolate in Russia. Nestlé SA is to vastly reduce what it sells in Russia, ceasing production of pet food, coffee, and chocolate as the KitKat manufacturer confronts pressure from legislators, employees, and customers. While Russia’s war on Ukraine continues, the Swiss packaged-foods company announced Wednesday that it will focus on delivering vital food. While it does not plan to earn a profit or pay taxes in Russia for the foreseeable future, the company has said that any profits would be donated to humanitarian assistance groups.

Russia sanctions expand, U.S. to raise tariffs, restrict imports and exports. The U.S. and others have announced new import and export restrictions against Russia. President Biden stated that he intends to approve legislation that will withdraw permanent normal trade relations status for products imported from Russia, allowing for considerable tariff increases on such goods. G-7 members Canada, France, Germany, Italy, Japan, and the U.K. are anticipated to follow suit.