Featured Headlines:
ACE is the Place with the Brand New URL
It’s a Bird… It’s a Plane… No — It’s the UFLPA!
ACE is the Place with the Brand New URL
- Did you know that U.S. Customs and Border Protection (CBP) recently launched a brand new and improved version of its Automated Commercial Environment (ACE) portal?!
- The outdated URL is still operational; however, users will only be granted access to the legacy ACE Portal.
- Using the updated URL, ace.cbp.gov/login, will allow users to log into both the modernized and outgoing ACE Portal.
- More information about the modernization can be found here: https://www.cbp.gov/trade/automated/ace-portal-modernization.
- Click here to view CSMS #56034434.
- Any questions? Feel free to reach out to our compliance experts!
It’s a Bird… It’s a Plane… No — It’s the UFLPA!
- May Day, May Day! CBP has announced that it will deploy the enhanced Form 6051D for detentions of cargo filed in ACE on May 20, 2023.
- The enhancement to Form 6051D will also include the Uyghur Forced Labor Prevention Act (UFLPA) detentions.
- With the enhanced 6051D form, importers will be able to view, search and give feedback to CBP directly in the ACE Portal via the Forms Application.
- For additional information about this announcement click here.
- Speaking of the UFLPA, CBP has released a Quarterly Statistics Dashboard that provides “data related to enforcement of the UFLPA,” as well as a UFLPA-related Data Dictionary.
- Both tools are meant to help the trade community see how many shipments have been stopped by CBP for UFLPA reasons and the actions which ensued.
- For more details on forced labor, check out How to Avoid Forced Labor Violations on Your Imports.
Jokers in Railroad Poker
- The Union Pacific Railroad (UP) has lost a stack of chips at the on-going Railroad Mexico to US Midwest Hold ‘Em Tournament. And the Omaha-based giant has Schneider National to thank!
- In what felt like a few minutes, seemingly out of nowhere, the newly formed Canadian Pacific-Kansas City Southern Railroad (CPKC) took a seat at the table and managed to forge a strategic partnership with Schneider to utilize CPKC’s new single-line domestic intermodal connections between the US Midwest and Mexico. As intelligent as this design and deal may be, we have to ask…couldn’t ANYONE come up with a better name for this railroad?!
- It was just late March when the U.S. Surface Transportation Board (STB) approved the CPKC merger, and guess who was loudly opposed and told all her besties and family members? Yup, you guessed it…Omaha’s UP Railroad.
- Speaking of Omaha, Nebraska and poker, did you know that the Reuben sandwich was invented in Omaha? Yes, Reuben Kulakofsky threw together what he could find at the Blackstone Hotel to fuel an all-night poker match in 1925. (Don’t believe us? Look it up!)
- Now…back to rail poker: Schneider’s multi-year deal with CPKC comes just 4 months after the UP and Schneider signed their own partnership. Did Schneider tell the UP that it was an open marriage?! Oh, the intrigue!
- To increase the pot of drama chips, it was the UP that kicked the CP-owned half of the CPKC out of a shared container program in Canada just a year ago. Alas, there is bad blood at this green-felt table, folks.
- The whispers in the casino point to a UP deal with Hub Group and/or the deployment of UP-owned containers in Mexico.
- The UP also just announced a creative deal with Canadian National (CN) and Ferromex to create a joint service from Monterrey and Silao, Mexico to Eagle Pass, Texas to Chicago. From Chicago, the CN links to Detroit and greater Canada.
- Guess who played the last joker?… Schneider?… Nooo…That’s right, the pesky CPKC also announced a multi-year deal with Knight-Swift Transportation to feed their own Mexico-Chicago service, which launches in about 2 weeks. Yet another trump card!
Mexico Rail Service Stakes
- The fascinating part of the railroad poker story is that the Intermodal Association of North America (IANA) tells us that only 2.5% of all current US intermodal traffic originates in Mexico! The lane is dominated by traditional trucking services, which nimbly (and expensively) connect shippers and buyers.
- Today, only 250,000 rail containers cross the border each year; however, the railroads are clearly betting on that to change and grow rapidly. The CPKC merger has changed the game, and trucking companies will certainly face fuel and insurance cost headwinds tomorrow.
- So why all the fuss over Chicago and Detroit, you ask? The IANA estimates that 70% of intermodal moves from Mexico terminate in the Midwest; and 50% stay there with 20% trucked to other US regions.
- As you have likely guessed, it is the automotive industry that drives current intermodal demand since Mexico is a major supplier for that industry. (Pssst, Detroit!)
- While the new rail connections between Mexico and the Midwest are intriguing, the rail industry has a lot of homework left on the demurrage and US logistical fronts.
- US cargo owners are still red with rage after having to pay through their red noses (thus going in the red) for record-breaking demurrage penalties at rail ramps in 2021 and 2022.
- With many of the usual suspects now alleviated, the “Keyser Soze” is our old friend, the chassis. (We tip our cap to the film, The Usual Suspects!)
- The chassis issue is complex: most truckers and all railroads work seven days a week, and most rail ramps have at least some weekend hours. However, our adorable little chassis are babysat at container depots (many of which are closed on weekends).
- Could SOMEBODY please set up a Zoom call or something?!
- Guess where the depot problem is worst? Yup, the Midwest, people! The Journal of Commerce (JOC) tells us that the cities plagued by the worst synchronization of trains, trucks, ramps, and depots are Detroit, Cincinnati, Kansas City, St. Louis, and Buffalo. Oh, come on—Buffalo is at least culturally Midwestern!
- The stakes are growing, the cargo’s flowing, the future’s glowing, but the rail system still needs sewing!
Foxy Boxy
- AELER, a Swiss firm, had a great chance to show off and brag at this year’s Sea Asia Exhibition in Singapore—though they were strictly forbidden to chew gum.
- Interestingly enough, AELER has been asking itself and all of us a perplexing question: “Why hasn’t the shipping container changed since 1956?” Hmmmm, not a bad question.
- Their prototype modern container is a 20’ named Unit One, and let us tell you…he is one handsome and sophisticated devil, folks!
- Not only is this fellow made entirely of composite plastic materials (perhaps recycled in the future), but he weighs less than his metal grandfather, while pumping 15% more iron on payload. We’re not sure iron metaphors for plastic boxes make sense, but we digress!
- Unit One is also insulated, aerodynamic, green and connected to the internet of things (IOT)! His mother says that he is a gourmet cook, speaks French, and can soothe our stress through acupuncture, though we were unable to verify all of this.
- The grandest claims AELER is making regarding our man about town, Unit One, is that using him for cargo could reduce carbon dioxide emissions by 20% and road fuel by 4%. They left out the fact that Unit One costs one million units of dollars! Just kidding, just kidding! That said, grandpa steel container costs just $2500 for a new 20’.
- AELER is not the only proud parent out there…the US’s Staxxon is also working on an accordian-style design, and India Shallow Waterways Shipping has designed and manufactured a hexagon-shaped container for holding cargo currently shipped in bulk.
- Exciting and innovative times in the maritime shipping sector!
Trouble in Sudan
- Concerned over operational risks and the well-being of crew members, Maersk and Hapag Lloyd, among other major steamship lines, have suspended service to and from Sudan until further notice.
- Hapag Lloyd also announced that all existent bookings in motion will be delivered to Jeddah, Saudi Arabia. Shippers will certainly be curious what to do once that diverted cargo arrives.
- Global supply chains have already been disrupted and compromised by the conflict between Russia and Ukraine—and the news out of Sudan is both sad for that nation and a new hurdle for supply chain professionals.
The Tides of March
- If you have been showing up to work AT ALL, you have noticed that the international freight market is in recession, though we all know that is a naughty word when describing the broader economy. By the way, if you have not noticed the decline, we hope you are enjoying that (formerly) deserted island in the Pacific!
- The John McCown Container Report tells us that total US inbound volumes shrank by 32.2% year-over-year (YoY) in March, and this set a new record, a record not unlike striking out the most times in a baseball season. Woot!
- The previous record holder, February 2023 at 27.6%, could not be reached for comment because it is celebrating the loss of the record on a deserted island.
- A closer look at March 2023 shows the West Coast down a debilitating 35.4%, and the combination of Gulf and East Coast ports dropping 28.8%…Ouch + Ouch = Double Ouch!
- Here’s where the numbers boggle and disturb; we’ll try to be gentle. March 2022 witnessed a solid 3.3% growth in imports YoY, okay…however, March 2021 established a new record with a … wait for it… 67.7% YoY growth!
- Shapiro, stop scaring us by using Covid year comparisons! Well, okay…
- For you fellow nerds, the Ides of March is a tradition that originated in 44 BC. On the 74th day of the Roman calendar (March 15th), many religious customs were observed and, just as significantly, all debts were due in Rome.
- It makes you wonder if the US government used it as inspiration for our “Ides of April,” tax-day each April 15th.
Ask About ASKs
- As we have preached (and preached) look at airline passenger realties for a barometer for future air cargo capacity and rate trends! You need to know future cargo demand as well, but passenger stats tell 50-67% of the story.
- ASK = Available Seat Kilometers. Unfortunately, this conjures images of belted passengers flying around in just a chair, but our newsletter is written by minds warped by years in the forwarding industry!
- Of course, ASKs actually measure the current potential passenger capacity for airlines.
- Let’s take a peek at ASK trends by region:
- The Globe: 92% of 2019 levels, up close to 20% since Q4 2022.
- Asia Pacific: 83% of 2019 levels, but up 63% since December 2022.
- North Am/Latin Am/Africa: 100% of 2019 levels.
- Europe/Mid East: 92% of 2019 levels.
- Globally, there were 2.61 million passenger flights in March, a 13% increase vs. February and nearly a 30% increase YoY. Just wait for the summer travel rush; air cargo will be shipping for FREE!
- Don’t just ask about ASKs, also ask about airport security. $15 million in gold and other valuables were stolen from a holding facility at Toronto’s Pearson International Airport. Interestingly, only two employees failed to show up to work the next day: one Butch Cassidy and one Sundance Kid!
