• Hooray, after months and months of bad news and bad realities plaguing the Middle East, recent headlines hint at some calmer waters on the maritime horizon!
• In addition to the hostage swap and other terms of the recent Gaza negotiations, the Houthi rebel group has announced a ceasefire on most vessels in the Red Sea. But don’t pop the champagne just yet—because “tomorrow is just a day away.”
• Under the current agreement, attacks on most vessels utilizing the Red Sea are off the table; except for those displaying Israeli flags and/or are owned by Israeli companies.  Take a bow, Zim!
• So why is it still too early for the ‘break a leg?’ Because… IF the United Kingdom (UK), United States (US) and/or Israel decides to stir the pot (which NEVER EVER happens), you can bet your bottom dollar that attacks will restart in the thruway faster than you can belt out a glowing rendition of ‘Tomorrow’ on Broadway.
• Speaking of “bottom dollars,” the Houthis have reportedly raked in over $2 billion from ocean carrier payoffs from its nefarious activities.  What exactly is the motivation to stop?
• Let’s shift to “bottom line dollars;” If the Suez stays open and undisrupted, shippers could finally see rates plummet due to carriers’ effective overcapacity.
• Faster transits equal more access to allocation over time—and you thought e=mc2 was clever!  No successful Broadway hits about Einstein to feature here!
• Stars of the Red Sea show, like Maersk and Hapag-Lloyd, aren’t rushing back to Red Sea routings; and the supporting actors, such as cargo insurers, still have cold feet on coverage adjustments.
• A cynical observer (NOT named Shapiro!) might think the ocean carriers PREFER the dangerous route around Africa; hey, it only quadrupled financial results in 2024, after all!
• It’s also entirely possible that Lebanon and/or Iran could renew tensions with Israel, thus igniting the Houthis to “throw tomatoes” yet again!
• So, you see, dear readers and theater goers, tomorrow is indeed only a day away!

• We will briefly touch on this in our Regulatory News section, but the news is just so big that we wanted to make sure we covered every angle! With CBP cracking down on low-value imports ($800 or less), a huge array of tariffed goods may no longer qualify for duty free entry.
• With over 1 billion shipments claiming de minimis status in 2023, CBP’s proposal aims to close what they call a loophole—and what e-commerce platforms probably call “their bread and butter.”
• This move targets bad actors smuggling everything from unsafe products to synthetic opioids while also leveling the playing field for U.S. shippers and manufacturers.
• E-commerce giants aren’t sweating it too much. They’re already plotting workarounds like consolidating shipments, setting up U.S. warehouses, AND the use of AI robots to teleport products to consumers via their thoughts (yuh huh, it could happen!).
• Expect delivery times to get a little slower and prices to tick (tock) up 20%-35%, but let’s be honest: Will that really stop us from clicking “Add to Cart”?

• In case your New Years Resolution was to ignore all news-related things in 2025 (you know who you are!), US Customs and Border Protection (CBP) announced a Notice of Proposed Rulemaking (NPRM) on certain low-value shipments entering the United States to tighten up duty free exemptions.
• According to the proposal, the following changes would occur:
  • Makes certain products ineligible for the exemption, which currently allows goods valued at $800 or less into the country without paying duties or taxes.
  • Creates a new entry process for entering low-value shipments, which would allow CBP to target high-risk shipments more effectively.
  • Merchandise subject to specific trade and national security actions (ex. Sec 201, 232, and 301 duties) would no longer qualify for the de minimis exemption under the proposed rule.
  • Certain shipments claiming this exemption would also be required to provide the 10-digit HTSUS classification of the imported low-value merchandise.
• For additional information, please refer to CSMS # 63789491.

#1. Boycott Requester List

• The Department of Commerce’s Bureau of Industry and Security (BIS) published its third quarterly update of the Boycott Requester List, which notifies interested parties that there may be potential boycott-related requests.
• The parties included on this list are not prohibited from dealing with US citizens (or vice versa really); but you should take precautions if you recognize a name to ensure your past transactions aren’t “shady,” Slim.
• If you believe that you have been listed in error or would like to discuss a listing, contact the Office of Antiboycott Compliance (OAC).
• More information about this announcement can be found in the full BIS press release (which we promise is NOT full of BIS!)

#2. Framework for Artificial Intelligence Diffusion

• As previously mentioned, the BIS is amending the Export Administration Regulations (EAR) to enhance and refine its framework for applying export controls to regulate the global diffusion of the most advanced artificial intelligence (AI) models and large clusters of advanced computing integrated circuits (ICs) to protect US national security and foreign policy interests.
• In addition to the AI enhancements, the BIS is also seeking to:
  • Expand existing controls on advanced computing ICs controlled under ECCNs 3A090 and 4A090 and the corresponding items and imposing new controls on the model weights of certain advanced closed-weight dual-use AI models controlled under newly created ECCN 4E091.
  • Add License Exception Advanced Compute Manufacturing (ACM) for eligible items.
  • Make 740.29 License Exception Low Processing Performance (LPP) available for certain eligible destinations.
• Exporters, re-exporters, and transferers are not required to comply with the changes made in this rule until May 15, 2025; with a delayed compliance date of January 15, 2026 for certain items.
• This rule is effective January 13, 2025—the date that the unpublished version was originally released.
• For more details, please refer to the final ruling published in the Federal Register on January 15, 2025.

• President Trump has delayed imposing new tariffs and put a pause on new rules or regulations until they’re reviewed by his appointees. Here’s a quick rundown of what’s happening:
• A top-to-bottom review of trade policies is underway, with agency heads reporting back by April 1.
• Mexico and Canada could face 25% tariffs as early as February 1, depending on outcomes.
• Potential actions include new tariffs, additional 301 tariffs, changes to section 321 de minimis, and updates to steel and aluminum tariffs.
• NPRMs (like those affecting section 321 entries) are postponed for 60 days for further review.
• Potential 10% tariff on goods from China, also set to begin February 1.   The justification is the Chinese export fentanyl trade via Canada and Mexico, so this may have an overlap with the 1-2-3 on 321!

• Outbound truckload spot rates saw significant jumps in December, with New York/New Jersey FTL rates rising 7% to $2.38 per mile and Los Angeles trailer load rates hitting $2.77 per mile, a 26-month high.
• The surge in West Coast rates reflects a shift in cargo away from the East and Gulf coasts due to labor uncertainties, as well as freight rerouted from Canada (and her own labor mess) bolstering Seattle’s numbers.
• Shippers remain skeptical that spot rate inflation will lead to higher contract rates in 2025. Stable truck capacity and no driver shortages mean carriers are struggling to justify anything beyond modest rate increases during this year’s chess matches!
• Freight markets in Los Angeles have rebounded faster than others, with analysts predicting double-digit growth in 2025. However, shippers believe demand may shift back to East Coast ports once labor concerns and tariff uncertainties are resolved.
• Spot rates are expected to dip in January and February, as the trucking industry enters its typical winter lull.

• The California Air Resources Board (CARB) has backed off its proposed zero-emission locomotive rule, giving BNSF Railway the green light to proceed with its $1.5 billion Barstow Intermodal Gateway (BIG) project.
• They’ve effectively moved from a no carbs diet to a low carbs diet!  Bah dum dum!
• The now-scrapped rule would have required locomotives in California to produce zero emissions by 2030 and banned older locomotives from operating, raising significant concerns about the feasibility of current technology and potentially sidelining 25,000 diesel-electric hybrids.
• A key factor in CARB’s reversal was a federal ruling that paused the rule’s implementation, questioning its compliance with federal interstate commerce laws.
• BIG is set to become a BIG game-changer for the supply chain, acting as a transloading hub to shift ocean containers into 53-foot domestic containers for faster inland movement.
• This would help free up marine containers for quicker returns to Los Angeles and Long Beach ports, easing congestion and aiding exporters who rely on empty containers.
• Completion is now expected in 2027 or 2028.