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An FAA Ruling on Air Cargo, Continued Trade Tension with China, and Optimism at East Coast Ports

By May 28, 2020 No Comments

U.S. Customs 

This week, U.S. Customs granted more exclusions for Section 301 tariffs. See if your imports are on the list. Additionally, recent trends in activity show that Customs seems to be reevaluatinSection 301 tariffs from last summer, in an effort to catch those who may have made mistakes in their duty payment amounts. If you need help making sure you’re covered, reach out to a Navegate Customs expert. 

Additionally, tensions continue over the U.S.-China trade deal. President Trump has continued to express frustration over the implementation of Phase One of the deal, and has hinted at the possibility of taking aggressive action. Adding to the tensions, the U.S. House of Representatives passed legislation on Wednesday, calling for sanctions against the Chinese government for their cruel treatment of the Uighur Muslim minority group. We’ll keep you updated as the situation develops.

 

Air 

The Federal Aviation Administration (FAA) has pushed forward rulings to make it easier to transport cargo on passenger planes. The FAA ruling allows for cargo to be carried on the seats in the cabin in passenger airplanes, so long as there are no passengers on board. This is in addition to April exemptions that have allowed the carriage of cargo in overhead bins, under seats, and in storage closets—all in an effort to facilitate the movement of goods during the coronavirus pandemic. 

While most open air capacity has been dedicated to the movement of personal protective equipment (PPE) and other medical supplies, the staggering numbers of passenger aircraft making cargo-only flights has some questioning what the air freight industry will look like as the world moves into recovery mode. With pricing models for freight in disarray, along with the increased use of ocean-based express services, few can seem to agree on predictions about how future supply chains will look. 

 

Ocean 

In a continuation of the trend we’ve seen for weeks now, container flows stay near record lows. Just this week, Clarkson Research reported that container shipping has seen its most significant drop in teu-miles everSailings continue to be cancelled at high rates, and ocean terminals are feeling the backups.   

Agricultural shippers, in particular, are vocalizing frustrations that the current situation is only exacerbating the issues they already faced at terminals. Many are calling for legal remedies like overhauls to the Uniform Intermodal Interchange Agreement and the Shipping Act of 1984. Some of these desired changes could lead to widespread effects on the overall fluidity of freight.

 

Ports 

After receiving pressure from regulators in Bangladesh, carriers have agreed to waive storage fees accrued in Chittagong between March 26 and May 30 of this year. Bangladesh was largely shut down during this time because of the coronavirus pandemic, making it nearly impossible for cargo owners to pick up containers. While skepticism remains as to whether the waiver will improve port congestion at Chittagong, the move will ease enormous financial burdens for cargo owners.  

Despite the recent trends in ocean shipping, ports along the East Coast are looking at the rest of the year with optimism. The Port Authority of New York and New Jersey reported a steady decrease in announced blank sailings and expect June to be the end of the major declines. 

 

Trucking 

U.S. Domestic trucking continues to rebound, as traffic begins to increase across the country. Main hubs in Los Angeles and the south central U.S. remain congested, but loads are turning at impressive rates, largely due to recent regulation changes for truckers, like Hours of Service restrictions.