Ocean & Air Freight market update
Ocean Freight:
The Asia Pacific market continues on its decline, with demand slipping further in advance of China’s Golden Week holiday during the first week in October. Ocean carriers are being forced to cancel sailings from Asia with little or no notice. At the end of August, carriers had cut just 3% of capacity during the four-week period that comprises Golden Week and the three weeks that follow. However, in the last two weeks, carriers have announced an additional 29 blank sailings.
In recent years, lines have become increasingly dynamic in how they stop rates from plunging, using blank sailings (announcing cancellations much closer to the voyage date than in the past), as well as slow steaming (decreasing speed of vessels to conserve fuel) and suspending services.
As of mid-September, THE Alliance is suspending one of their transpacific loops (PN3 – from Asia to the West Coast of North America) effective October 1st, in order to balance supply with decreasing demand. This takes approximately 11,400 TEUs of space out of the market. Many carriers are also expecting deliveries of new ships expected to be phased into usage towards the end of the year, which is making issues worse, forcing carriers to cut capacity even more aggressively. There are no meaningful indicators in the market that there will be a peak season this year.
The Europe to North America market continues in a similar trajectory. Rates are now below pre-pandemic levels and there is still no signal from the market that this is going to change. Space and equipment continue to be fluid, however, if the downturn continues, carriers will have to be creative in how they try to keep rates from slipping.
Air Freight:
The air cargo market continues to be stagnant and due to the global economic downturn, there are no indications that there will be a strong peak season in Q4. Industry analyst CLIVE Data Services said that of the 10 major trade lanes assessed in the past month, only China – U.S. and Southeast Asia – U.S. recorded growth, with air cargo spot rates up 3% and 4% on these corridors. Rates out of China may rise slightly mid-October, with electronics giants such as Apple and Hewlett-Packard shipping in volume into North America.
For more information, contact Debbie McGuire, Director – Freight Solutions or Cathy Fong, Director – Freight Pricing.
General Export Permits – Dual-use Goods and Technology to Certain Destinations
On September 1, 2023, Global Affairs Canada announced General Export Permit No. 41 (GEP-41) has been amended to include a new category to the list of “unauthorized goods and technology” under paragraph 3(2)(e). Specifically, paragraph 3(2)(e) now prohibits the use of GEP-41 for the export or transfer of goods or technology that are intended for the development, production or use of rocket systems or unmanned aerial vehicles with a range of 300 km or greater.
This Notice should be read in conjunction with General Export Permit No. 41 – Dual-use Goods and Technology to Certain Destinations (GEP-41), introduced in 2015 and as amended on September 1, 2023, as well as the current version of “A Guide to Canada’s Export Control List”.
For more information, contact Brian Rowe, Director – Customs Compliance & Regulatory Affairs.
Canada to challenge US softwood lumber duties
On August 21, 2023, Global Affairs Canada announced they had filed notices of intent to commence judicial review of the latest U.S. decision maintaining import duties on Canadian softwood lumber.
This request for judicial review is in response to the July 27, 2023 notice from the U.S. Department of Commerce announcing the final results of its fourth administrative reviews of the countervailing and anti-dumping duty orders on softwood lumber products from Canada:
For more information, contact Brian Rowe, Director – Customs Compliance & Regulatory Affairs.
U.S. extends China tariff exclusions to December 31, 2023
On September 6, 2023, the United States Trade Representative (USTR) announced previous China Tariff exclusions, due to expire September 30, 2023, have been extended until December 31, 2023. These encompass 352 reinstated exclusions plus 77 COVID-related exclusions from the China Tariff upon import to the USA. The extension will allow the USTR further consideration under a statutory four-year review.
For more information, contact Brian Rowe, Director – Customs Compliance & Regulatory Affairs.
US TSA air cargo screening update
In 2021, the US Transportation Security Administration (TSA) first mandated 100% screening of air cargo originating in the U.S. and destined for non-U.S. locations that is transported on all-cargo aircraft. In order to help the industry meet that new regulatory requirement, TSA originally allowed an exemption for Impractical to Screen (ITS) cargo, but the agency now says that this amendment will expire on October 31, 2023.
Federal air safety regulators are expanding a program that they say will allow logistics companies to continue shipping goods via airfreight after the TSA closes this “loophole”, that currently allows ITS cargo to travel through the “secure supply chain” in October.
To ease that transition, the TSA is now expanding its Certified Cargo Screening Program (CCSP), which is designed to help logistics companies to keep moving freight without additional security screening.
Specifically, the TSA says it is actively encouraging indirect air carriers (IACs), manufacturing facilities, assembly facilities, shippers, warehouses and distribution centers to apply for and become a Certified Cargo Screening Facility (CCSF). Approved sites will be certified to assemble, pack, secure, and tender cargo for air transport in a secure manner, where no additional screening will be required.
To qualify, sites must
- adhere to stringent security requirements set by a TSA security program;
- screen cargo at the piece level;
- initiate and maintain the integrity of cargo through chain of custody measures; and
- permit on site validations and periodic TSA inspections.
For more information, contact David Lychek, Director – Ocean & Air Services.
Global Spotlight Quiz
Name the largest city in the Baltic States
- Located on the banks of the Daugava River.
- Home to the world’s first Christmas Tree, which was erected in the town square in 1510.
- Competes for having the tallest TV Tower in the European Union with Berlin, Germany.
- Has the largest concentration of Art Nouveau architecture in the world.
- The city’s old town is a UNESCO World Heritage Site.
Answer: Riga, Latvia
For more information about shipping freight to or from this city, contact Debbie McGuire, Director – Freight Solutions.
The House of the Black Heads is a popular tourist attraction in our mystery city.
Quick Tip
Save on smaller shipments by consolidating courier-type orders and using distribution hubs
Instead of sending multiple international courier packages on a daily basis, consolidate weekly and ship by the pallet to a distribution warehouse. From this point, orders can be picked & packed and on-forwarded at domestic rates.
Outsourcing this function can prove very cost effective at a minimal disruption to service levels.
At Your Service:
Tina Gilbert
US Customs Operations
Tina Gilbert joined Universal Logistics USA in February 2022, working at our Buffalo, NY office, where she is responsible for handling cross border clearances from 7:00 am – 3:00 pm. Tina has extensive knowledge handling customs clearances at all ports across the USA.
Tina an can be reached by phone (716) 882-4100, ext. 2607 or by email.
Tina Gilbert
US Customs Operations
SMART Logistics
Controlling how freight moves through your supply chain could save you thousands – or more.
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