Featured Headlines:
No Joke, Folks—FDA Is Not Blowing Smoke
No Dice on Paying the UFLPA Price
Railroad Hodge and Trucking Podge
It's a Girl, My Lord in a Flatbed Ford
All Not a Glow for Air Cargo Flow
Shipping Slips, Blips and Trips
No Joke, Folks—FDA Is Not Blowing Smoke
- The US Food and Drug Administration (FDA) has made it clear that products containing non-tobacco nicotine (NTN)— any nicotine product not made or derived from tobacco, such as synthetic nicotine—fall under its jurisdiction and must comply with all applicable FDA requirements.
- Per FDA law, NTN product manufacturers are required to submit a premarket application and receive authorization prior to marketing in the US.
- For assistance with product code identification, the public may refer to the FDA Product Code Builder or contact Product Code Builder Feedback via [email protected].
EPA Says Grace for New Forms
- On Tuesday, US Customs and Border Protection (CBP) announced that it will continue accepting the old Environmental Protection Agency (EPA) Form 3540-1 Notice of Arrival (NOA) through July 30, 2022; the old form was originally set to expire on June 17.
- Although the EPA has assured importers that it does not anticipate any significant disruptions resulting from the transition, officials decided to give the trade community an additional grace period to adjust.
- Importers are still encouraged to begin using the new form as soon as possible; and should note that electronic filing of the form via the Automated Commercial Environment (ACE) remains unaffected.
- Click here to read CSMS #52240521.
No Dice on Paying the UFLPA Price
- Earlier this week, the US Department of Homeland Security (DHS) released the Uyghur Forced Labor Prevention Act (UFLPA) enforcement strategy; the document was required to support the UFLPA’s rebuttable presumption that goods connected to the Xinjiang region are made with forced labor as of June 21, 2022.
- Click here to view the Forced Labor Enforcement Strategy document.
- Do any of you have to “deal with” importing a product identified on the UFLPA Entity List? If so, we encourage you to immediately undertake due diligence measures to ensure compliance with all US laws and trace supply chains for potential exposure to forced labor.
- Want more information? Find out How to Avoid Forced Labor Violations on Your Imports from our Compliance gurus.
Railroad Hodge and Trucking Podge
- Norfolk Southern Railroad (NS) has announced a $75 per container incentive for ocean carriers that balance inbound and outbound containers at rail ramps in New Jersey and Virginia. As equipment shortages stymie efforts to normalize operations in the American hinterland, NS is all but desperate to keep their railcars flowing smoothly to inland markets. Ocean carriers who can reach an 85% balance of import and export loads will earn a reward from NS beginning July 1st.
- 750 Canadian National Railway (CN) and communications workers from the International Brotherhood of Electrical Workers (IBEW) walked off the job this week; CN officials claim that they have executed a contingency plan that will allow the railroad to operate safely at normal volumes. Shockingly, IBEW spokespeople disagree and have indicated it is just a matter of time before the trade experiences disruptions and delays.
- In May, US trucking tonnage was up for the ninth straight month year-over-year (YoY)—the 3.7% uptick was the largest in a single month since April 2021; 2022 YTD tonnage is now up 2.7%.
- Despite the fuel crisis, trucking still represents over 70% of total domestic freight transportation (all modes) by tonnage. Interestingly, when evaluating domestic modes by revenue, US trucking takes home over 80% of the dollars.
- For 50 straight weeks, booking lead times for drayage are beyond 10 days for the following US ports: New York, Norfolk, Miami, Houston, Los Angeles, and Seattle. This is an unprecedentedly long period for congestion, equipment imbalances, and general inefficiency to linger at so many US ports at once.
It's a Girl, My Lord in a Flatbed Ford
- The Infrastructure Investment and Jobs Act (IIJA) was approved by Congress and signed into law on November 15, 2021; a closer look at the $1 trillion package reveals the inclusion of several provisions aimed at increasing the number of women in US trucking (and not in pick-up trucks like the Eagles song, either!).
- Did you know that women make up just under 10% of over-the-road drivers and just under 20% of office workers in US trucking? With such ample room to expand and increase representation in the industry, it’s no wonder why the Departments of Transportation (DOT) and Labor (DOL) are presenting women with new pathways into the profession.
- Such opportunities will include advertising funds, training programs, career development guidelines, safety rules, mentorship programs, and workplace harassment education.
- Interestingly, the IIJA provides apprenticeship programs for truckers under 21 to operate commercial vehicles that cross state borders. This is welcomed news for a trucking industry where the average driver is over 50 (provided this program is run with care!).
All Not a Glow for Air Cargo Flow
- With pilot positions being affected the most, airline staffing shortages are creating what can only be described as chaos for air cargo and passenger traffic. Last weekend alone, the US had 6,300 flight delays—and an eye-popping 859 were canceled altogether.
- Though it seems impossible, the United Kingdom (UK) and European Union (EU) are experiencing even more airline disruptions as measured by the percentage of overall flights affected.
- For the flights that do (eventually) make it home, air cargo’s share of belly space neared 30% in the US—a lofty increase from typical pre-pandemic allocations near 5%.
- In response to the unprecedented flight cancellation levels, the UK has presented legislation to allow air carriers to forfeit slots this summer without losing those slots permanently.
- President Biden is expected to lobby Saudi Arabia to allow Israel greater access to Saudi airspace during an upcoming trip to the Middle East. Today, Saudi Arabia severely limits commercial airlines from using their airspace for flights to or from Israel.
Coal for Christmas in Germany
- As Germany works to wean itself from Russian natural gas and coal, the world’s third largest economy is now looking to the US for greater quantities of coal. Before the war, US coal was 18% of German supply; however, Germany may need to import as much as 50% of their coal from the US in the near future.
- US railroads are already watching demand for coal cars grow. While US coal exports to Germany grew 293% in 2021, US railroads moved an additional 20,000 rail cars of coal; export volumes are expected to exceed 2.5 million tons in 2022.
- US railroad volumes have faltered broadly—especially intermodal ocean container moves—but coal cars are a bright spot for growth (one of only four commodity categories showing YoY growth in 2022).
- As you might expect, spot prices for US coal have spiked. Please note the following YoY rate trends from major US mining areas:
| Illinois Basin | + 265% |
| Central Appalachia | + 125% |
| Northern Appalachia | + 98% |
| Powder River Basin | + 37% |
| Uinta Basin | + 30% |
Shipping Slips, Blips and Trips
- Asia to US spot rates continue to tumble…Since the beginning of the year, rates are down approximately 25% for both coasts; these levels are also about 10% lower than a year ago (something we have only been able to say for about two weeks now). Rates to Houston and all IPI destinations are much more resilient due to equipment and allocation shortages and steamship commercial policies.
- Over 40,000 rail workers in the UK have taken to the picket line to protest stagnant wages in a time of inflation. The strike is believed to be the largest in 30 years in Britain; and the one-day event provoked chaos for millions of passengers and thousands of shipping containers. The rail workers union is expected to stage another walk-out this weekend and again in the future until they get the attention of the UK Parliament.
- US shipper MSRF has filed a complaint with the Federal Maritime Commission (FMC) accusing Yang Ming and Hyundai Merchant Marine of breaching contractual obligations to re-sell capacity at historic rates on the spot market. MSRF claims that the two steamship lines pocketed $2.2 million or more as a result; and the importer has further suggested that both carriers, partners in THE Alliance, colluded on pricing.
- Fire broke out on the 8,000 TEU MSC Rachele, leading to an emergency helicopter airlift for 3 crew members in France. MSC has confirmed that the Rachele has been towed to Fos-Sur-Mer after an explosion in the engine room ignited the damaging fire.
- Just as rates have softened and allocations have improved out of China, the trade is bracing for large peak season surcharge (PSS) and general rate increase (GRI) hikes, and congestion out of India. For some carriers, announced GRIs and PSS levels are as high as $2000 per container.
- MSC has reconfigured several Transpacific services with the aim of diverting more capacity to the US East and Gulf Coasts. MSC hopes to launch the Zephyr Asia-Gulf-USEC service in July. Pending regulatory approval, the planned rotation will include Ningbo, Busan, Cristobal, Houston, Port Everglades, and Savannah.
- For those of you looking for a definitive, crystal-clear update on International Longshore and Warehouse Union (ILWU) negotiations with the Pacific Maritime Association (PMA), join the rest of us! It has been almost eerily quiet in the press; and the two groups are allegedly making quiet progress, though nobody expects a deal before the expiration of the current deal on July 1st.
