Featured Headlines:
House Rules For D&D to Promote 'Fair Play'
2022 Harmonized Tariff Schedule Review
Uyghur Forced Labor Prevention Act in Full Force
Intermodal Doing Swell to Reduce LA-LB Dwell
Truckload Rates Flying to Lofty Levels
Sinopharm Jab Not Doing the Job in China
Jumpin' Jack LNG, It's a Gas, Gas, Gas!
Are You Blanking Kidding Us (Again)?!
Heading Back East to Risk Slack Least
Air Rates Briefly Abate at Highest Levels to Date
Thanksgiving Leaves US Ports Hungry
House Rules For D&D to Promote 'Fair Play'
- In the dark and often mysterious world of D&D (demurrage and detention), where US importers feel they are always rolling the dice, the House of Representatives passed The Ocean Shipping Reform Act (OSRA) on December 8th, which allows regulators to require ocean carriers and marine terminals to certify that any D&D charge complies with US shipping law—meaning that these fees should incentivize fluid cargo movement.
- If a shipper cannot pick up or return a container due to factors beyond their control, any fee charged would be illegal.
- The FMC has been working to crack down on carriers charging unreasonable detention and demurrage since 2018 and the OSRA bill would add teeth to their efforts.
- The trade now waits impatiently for the bill to make it through the Senate and onto President Biden.
2022 Harmonized Tariff Schedule Review
- On December 23rd, the White House released its official proclamation amending the tariff schedule to implement the five year update to the World Customs Organization’s (WCO) Harmonized System tariff nomenclature.
- The changes to the USHTS will go into effect 30 days after the proclamation is published in the Federal Register.
- To view the full announcement from the White House, click here.
Uyghur Forced Labor Prevention Act in Full Force
- Today, President Biden signed the Uyghur Forced Labor Prevention Act, which will create a rebuttal presumption that goods with Xinjiang content are made with forced labor.
- The bill, championed by Senator Marco Rubio (R-Fla), awaited the president’s signature after being unanimously passed by the Senate last week.
- Agencies will now have 180 days to develop guidance for importers on due diligence and what sort of evidence would be adequate to prove goods are not made with forced labor; the shift of the burden of proof to importers will also begin in 180 days.
Intermodal Doing Swell to Reduce LA-LB Dwell
- The Ports of Los Angeles and Long Beach are urging importers to book international cargo via intermodal rail now that rail ramp dwell times have decreased significantly.
- The ports believe this will help with dwell times inside the port after many importers moved away from this practice because of compounding delays to overall transit times.
Oh, What a 'Draylief' it is!
- This week, drayage availability has shifted to “normal availability” for 25% of the 40 largest US ports and rail ramps by volume; this is the highest percentage by far since June 2021 and compares favorably to August’s 5% level.
- Dray availability is considered “normal” when bookings are possible within 48 hours.
- Unfortunately, dray availability remains extraordinarily scarce at America’s five largest seaports.
Drayage Payage Not a Relief
- A recent survey of intermodal dray providers has revealed that a full 75% intend to increase prices in 2022.
- The inability to execute turns at clogged ocean ports and rail ramps was cited as the main driver (pun intended) for 90% of survey participants.
Truckload Rates Flying to Lofty Levels
- The Cass truckload cost index has been up 10% or higher year-on-year for every single month in 2021, with December 2021 trending to be as much as 40% higher than December 2020.
- US FTL rates for the entire year are up almost 23%.
Sinopharm Jab Not Doing the Job in China
- Fueling fears of an Omicron outbreak in China, researchers from Shanghai Jiao Tong University have estimated Sinopharm’s Covid-19 booster to be 20 times less effective for Omicron than the original Covid-19 virus.
- The new report also indicates that without a booster, the original Sinopharm vaccine (like Western inoculations) is largely ineffective after 8 months without a booster.
- Sinopharm manufactures the vast majority of vaccines for Chinese citizens.
- Along with China’s CoronaVac, the Sinopharm vaccines account for almost half of the 7.3 billion COVID-19 vaccine doses delivered globally, and have been enormously important in fighting the pandemic, particularly in less wealthy nations. Thus, the Omicron concerns stretch well beyond China and Asia.
Russian Strain on Ukraine
- Citing an unnamed Biden administration official, Reuters reports that the US will heavily restrict Russia’s imports of smartphones and auto parts (among many other products) should Russia invade Ukraine.
Jumpin' Jack LNG, It's a Gas, Gas, Gas!
- The US is set to become the world’s biggest liquefied natural gas (LNG) exporter in 2022, surpassing Qatar and Australia.
- Global LNG demand has hit record highs each year since 2015, mostly due to surging demand in China and the rest of Asia.
- The US Energy Information Administration projects US LNG exports will satisfy roughly 22% of expected world LNG demand in 2022.
Are You Blanking Kidding Us (Again)?!
- A recent study indicates that the December 2021 Transpacific steamship capacity deployed—after accounting for blank sailings in the month— is less than 2% more than capacity deployed in December 2018!
- In the same time period, YTD demand for Transpacific imports is up 21%.
- This means that, theoretically, there is enough capacity in the market to adequately serve demand; it also calls into question why US ports are struggling for months on end with congestion.
- As our readers know, there are as many theories about root causes as there are blown budgets in 2021.
Heading Back East to Risk Slack Least
- Carriers and importers are shifting volumes from the US West Coast (USWC) to the US East Coast (USEC); broad November trends indicate import growth to the USWC of -7.5% and USEC imports growth of +9.9%.
- The expansion of the Panama Canal in 2016, the ongoing hardships to berth in LA, and the fact that 60% of the US population is located East of the Mississippi has greatly affected the current trend for carriers and importers to diversify their routing plans.
- Oh, and here comes a fractious labor negotiation with the ILWU. (Oh, the joy!)
- Not surprisingly, according to new data from Shifl, current transit times from China to NY are shorter than to LA; importers must be more than creative these days to get their cargo moving.
Air Rates Briefly Abate at Highest Levels to Date
- Though airfreight rates from China to US have finally softened this week, the big story for 2021 is that global air cargo rates are up 44.5% year-on-year, and export air from Shanghai is up a whopping 62.4%.
- Industry pundits believe that Omicron will prolong the period of elevated rates due to reduced belly space, more PPE and medical supplies shipping, and coming disruptions in the ocean supply chain.
Thanksgiving Leaves US Ports Hungry
- Other than Houston, volumes at the top 10 US ports dropped an average of 15% during the Thanksgiving holiday week. ,
