Consistency appears to be returning to the Asia-Europe lane of ocean freight. Carriers have reinstated 10% of announced blanked sailings while adding just 2 additional blanked sailings to the tally for last week. While rates remain at extreme highs, they have likely peaked. General rate increases (GRIs) are lasting for less than a full week as competition increases among carriers, and with the stabilization of sailing schedules, supply chain consistency may be returning to the ocean market. That being said, carriers in the Ocean Alliance (CMA CGM, Cosco, OOCL, Evergreen) may continue to blank sailings, as the alliance has opted against pre-emptive blanked sailings in favor of providing short notice.
While the market is generally stabilizing, shippers that have direct contracts with steamship lines are having issues getting space booked at their service rate. With rates at record highs, shippers are calling for the Federal Maritime Commission to intervene as steamship lines reject bookings made at agreed-upon service rates in lieu of bookings made at market prices.
All exclusions for Section 301, List 3 tariffs are set to expire on August 7th. Because List 3 is the largest of the Section 301 tariffs, many are nervous about their potential for renewal. If your business benefits from these exclusions, now may be a good time to consider what needs to be done to utilize your exclusions and get your freight inland before the 7th. If you want to explore your options, reach out to a Navegate Airfreight expert.
U.S. Customs and Border Protection (CBP) cut interest rates paid for overdue accounts and refunds of customs duties. This means that those who are working out underpayments or overpayments with CBP may see big shifts in how much money they receive. From July 1 to September 30, 2020, overpayments will see a 2% drop while interest paid for underpayments will drop to 3%.
For the first time in months, volatile airfreight rates finally appear to be plateauing. How long this lasts, however, remains to be seen as capacity out of China and Hong Kong begins to tighten. Renewed demand for PPE and large-scale new product launches for popular tech like iPhones and PlayStation are beginning to dominate capacity on all-cargo planes.
Much like air, trucking rates seem to be remaining stable. The common hotspots like Los Angeles, Houston, and Charleston remain slow-moving, and New Jersey has joined in on the capacity struggle. Those looking to save time and money might consider setting their sights on Chicago, which has managed to remain relatively congestion-free.
As the extent of human rights violations against Chinese Uighur people comes to light, American supply chains may find themselves entangled. So far, eleven Chinese companies have been placed on a U.S. government blacklist due to suspicions that the Chinese government is using the forced labor of imprisoned minority groups to support manufacturing and supply chains for brands like Apple, Google, and Ralph Lauren. Some question whether that is the true extent of these violations, as essential goods like sanitizer and PPE are also suspected to have ties to labor camps as well.
While the obvious solution would be to regulate the suppliers and weed out ones using forced labor, the unprecedented demand for these goods means that the infrastructure to do this is lacking. Importers are sourcing goods that they have never needed before, and the quality and ethics of their suppliers are not readily available for evaluation.