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November 2019 Newsletter

A roundup of our Industry Updates, Blogs and Market Information

Recent Developments regarding Section 301 Tariffs

  • Requests for exclusions from the additional tariff imposed as of Sept. 1, 2019 on List 4A imports from China may be submitted between Oct. 31, 2019 and Jan. 31, 2020. Any exclusions granted will be effective for one year, starting from the Sept. 1, 2019 effective date for List 4A.

    The additional tariff on the so-called List 4A items was initially set at 10 percent and subsequently raised to 15 percent. This tariff was levied in response to a Section 301 investigation determination that China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation are unreasonable and discriminatory.

  • The Trump administration is calling a possible trade deal with China "Phase One". Negotiations are ongoing between the US and China. It remains to be seen if an agreement will be reached before the planned December 15 List 4b tariffs take effect. 

We will continue to monitor Section 301 tariff developments and will provide updates as new information becomes available. Meanwhile, we invite you to visit our "Section 301 Tariff FAQ's" for more information.

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Update on Demurrage and Detention 

According to The American Shipper  "A proposed interpretive rule by the U.S. Federal Maritime Commission (FMC) to address demurrage and detention fee assessment practices under the Shipping Act drew heavy input from industry organizations and companies.

The comment period for the rule closed Thursday, Oct. 31. The agency estimates it received more than 70 comments but could receive more by mail in the next several days, an FMC spokesman said Nov. 1. The FMC originally requested that industry comments be submitted by Oct. 17 but agreed to a two-week extension at the request of the Washington-based Agriculture Transportation Coalition (AgTC).

The FMC published the proposed rule Sept. 17 after a nearly year-and-a-half-long investigation into complaints by multiple shippers and non-vessel-operating common carriers (NVOs) that they have been unfairly assessed demurrage and detention fees by ocean carriers and marine terminals."

The full article can be found at The American Shipper HERE.Newsletter Spacer Line 600.jpg

Update on IMO 2020 Impact

The IMO low-sulfur fuel mandate will go into effect on January 1, 2020. We have discussed this issue in previous Newsletters and provided IMO Low-Sulfur Fuel FAQ's for your reference. Additionally, there has been a lot of discussion in various industry publications regarding how this new regulation will impact ocean carrier rates and available space.  

Regarding the effect that IMO low-sulfur, will have on rates - most carriers have been charging an additional low-sulfur fee for months. However, as we approach the January 1 implement date, carriers have begun to announce some new fees related to the IMO low-sulfur mandate which will go into effect December 1, 2019. These fees are specifically targeted at spot rates and short-term contracts (less than 3 months). Should you have questions regarding these new fees, do not hesitate to contact us.

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US Import Trends  

  • The US-China trade war has impacted ocean import volume with the West coast falling 5.8% compared with 6.9% growth at east and Gulf coast ports.

  • A combination of factors has prevented a significant contraction in transpacific volumes. Those include a weakening of the Chinese currency, willingness from some Chinese exporters and American importers to absorb some of the additional costs arising from the new tariffs and some trade substitution within Asia. The most significant factor offsetting negative impact has been the strength of the US economy.

  • Carriers have attempted to keep load factors up by voiding sailings. This did not prevent an increase in spot freight rates for transpacific trade lanes.
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Check out our latest blog ..... Your Guide to Incoterms 2020

Incoterms, short for "International Commercial Terms" are international import and export shipping terms created by the International Chamber of Commerce (ICC) for use in international trade. Incoterms are typically updated by the ICC every 10 years and are invaluable to importers and exporters alike. Incoterms 2020 will become effective January 1, 2020 and there are eleven (11) terms related to the shipment and delivery of goods. In this article we discuss the notable changes to Incoterms 2020 and provide a guide to understanding the most commonly used incoterms and offer a free quick reference guide.Download our Incoterms 2020  Reference Guide HERE Interested in learning more about our services? Contact Us

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