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Why TTU Wants to Talk Trade With You!
Batting .333 as Railroads Look to Avoid Strikeout
Why TTU Wants to Talk Trade With You!
- Did you know that the Trade Transparency Unit (TTU)—established by US Immigration and Customs Enforcement (ICE) to support its Homeland Security Investigations (HSI) division—helps officials identify trade-based money laundering (TBML) trends and conducts an ongoing analysis of the trade data provided by global partnerships?
- HSI concentrates on trade based financial investigations through information sharing agreements with foreign counterparts, making TTU trade data a valuable and effective tool for investigators to leverage when identifying any TBML related patterns or anomalies that might be apparent on either side of the transaction.
- The following table includes the list of partner countries participating in the TTU program, as well as how often each country exchanges data with HIS:
| Country | Partner Since | Frequency of Data Exchange |
| Colombia | 2005 | Monthly |
| Argentina | 2006 | Weekly |
| Brazil | 2006 | Monthly |
| Paraguay | 2007 | Monthly |
| Mexico | 2008 | Monthly |
| Panama | 2010 | Monthly |
| Ecuador | 2011 | Monthly |
| Guatemala | 2012 | Monthly |
| Australia | 2012 | Monthly |
| Philippines | 2013 | Under Renegotiation |
| Dominican Republic | 2013 | Monthly |
| Peru | 2015 | Monthly |
| France | 2015 | Biannually |
| Uruguay | 2016 | Quarterly |
| Chile | 2016 | Monthly |
| United Kingdom | 2017 | Annually |
| New Zealand | 2019 | Pending |
- TBML can lead to further investigations, charges and even jail time in certain instances…so make sure your data is always accurate and matches the documentation from all parties involved!
- If you are interested in learning more about TTU, click here!
CBP Seeks CTPAT Comments
- U.S. Customs and Border Protection (CBP) is adding data elements for all Customs Trade Partnership Against Terrorism (CTPAT) partners to improve the screening process of companies and to ensure that companies in the program are low risk. These include the following:
- Date of Birth (DOB);
- Country of Birth;
- Country of Citizenship;
- Travel Document Number (e.g., Visa or Passport Number);
- Immigration Status Information (e.g., Alien Registration Number, Naturalization Number);
- Driver’s License Information (e.g., state and country of issuance, number, date of issuance/expiration);
- Social Security Number;
- Trusted Traveler Membership Type and Number (e.g., FAST/NEXUS/ SENTRI/Global Entry ID); and
- Registro Federal de Contribuventes (RFC) Persona Fisica (only needed for Mexican Foreign Manufacturers, Highway Carriers, and Long-Haul Carriers).
- Importers are encouraged to submit comments related to this matter by November 3, 2022.
- Click here to read the official Federal Register Notice.
USA Enters MRA With Brazil
- On September 16th, representatives from US Customs and Border Protection (CBP) and Brazil’s Customs Authority signed an Authorized Economic Operator (AEO) Mutual Recognition Arrangement (MRA) to build on other agreements between the two countries and to coordinate each nation’s supply chain security and ongoing efforts to combat trade offences.
- MRAs are bilateral understandings between two Customs administrations that provide a platform for the exchange of membership information and recognize the compatibility of the respective supply chain security program.
- By signing off on this arrangement, Brazilian officials acknowledge and confirm that the security requirements and/or standards of its foreign industry partnership program— as well as its verification procedures—are the same or align with the Customs Trade Partnership Against Terrorism (CTPAT) program.
- CTPAT is committed to continue to work with all international stakeholders to strengthen and secure global supply chains and the further global standardization of AEO programs.
- Click here for more information.
Half a Mil' Chassis Drill
- The US Federal Maritime Commission (FMC) is funding a $500,000 research study to evaluate existing and potential future models for supplying intermodal chassis to the US market. Their ultimate goal is to provide recommendations for best practices for the management of on-terminal and near-terminal pools. A cynical trucking company was overheard saying, “can’t we just add the 57 chassis a half mil will buy?!”
- Despite well-publicized production delays, domestic chassis providers believe that the supply of 53-foot chassis will be sufficient after an expected injection of supply in early 2023. Some of these same companies made the same claims about ocean container chassis a few weeks ago—and we were equally skeptical then. You see, the combination of high tariffs on Chinese steel…PLUS energy rationing in China…PLUS global raw materials shortages…PLUS labor shortages for US companies…PLUS current chassis shortages ALL OVER the supply chain EQUALS dubious belief in all this chassis supply good news. See?
- Speaking of chassis, which seems to be all we do, the Union Pacific Railroad (UP) placed an order for 5,600 over a year ago…and they expect the last deliveries for the purchase to finally trickle in this October!
- Chassis leasing giant, DCLI, got all brassy about the chassis in the press. They claim they can add 40,000 to their US fleet by next summer; and the DCLI spokesperson added, “take THAT, Union Pacific… with your pathetic 5,600 measly little order that’s late.”
Batting .333 as Railroads Look to Avoid Strikeout
- One-third of the 12 rail worker unions that are reviewing modified offers from American railroads have now ratified their contracts.
- Members of the American Train Dispatchers Association (ATDA)—the fourth union to sign—recently ratified their contract. Things to note:
- The new deal calls for about $15,000 in retroactive pay with an additional $3,000 for recognition bonuses.
- 64% of ATDA members voted in favor.
- Longer-term base pay will increase 14.1%.
- The group representing American railroads in contract negotiations, the National Carriers’ Conference Committee, has indicated that tentative agreements are in place with 8 more rail labor organizations—though final ratification has not yet taken place.
- The broader trade looks on with worry and amazement since the Union of Wrench-Using Rail Workers from Wyoming and the Union of Manual Flaggers During Power Outages Due to Summer Storms do not have enough members to even ratify a deal! Let us hope these infamous unions are not needed to keep the peace between ownership and labor.
Exportant Developments
- After severe droughts in middle America, water depths along key US rivers limit payloads on barges and sometimes cause the suspension of barge transport services altogether. The situation is much like what we have seen in Germany this summer.
- American farmers count heavily on river barge transfers to seaports, especially during and right after harvests. Many US rivers may not be as deep as usual, but they are considerably narrower! Thus, barge companies are loading lighter, while also facing unique traffic challenges; overall efficiency is down about 50%, causing operators to increase prices 41% year-over-year (YoY).
- Before you barge in with your suggested solutions, please consider that for every single 12-inch reduction in water level, a barge can move 5,000 fewer bushels of soybeans, which is 10% of normal barge capacity. (Ouch!)
- Next week, the Biden Administration is expected to announce new measures to restrict Chinese companies from gaining access to high-performance computing and semiconductor technologies.
- Several Chinese government research labs, companies, and universities are expected to be subject to the new restrictions which would essentially block any firm in possession of certain US technologies from selling to the named Chinese entities. A member of the Chinese government said, “well, we’ll just send the yummy tech from one place to another at midnight once it is here, so there.”
- In a more controversial move, the Biden Administration is also said to be readying an executive order that will allow the government to closely scrutinize the national security risks posed by the investments US firms make abroad.
- Though US natural gas reserves are 9% below their 5-year average as we head into winter, the White House has already said it will not place any ban or curbs on US natural gas exports this year. When consumer advocates screamed about the expected 17% increase in US heating costs and much higher for the 50% of Americans who heat with natural gas, an administration official simply said, “chill out!” Looks like we will do just that!
- Interestingly, gas stockpiles in heavily populated northwest Europe are 6% higher than normal for this time of year. Thus, the lack of export controls on natural gas appears to be much more about future economics and displacing Russia as a dominant European supplier. In the US northeast, natural gas is used for electricity production, and area power companies have warned of a potential 60% jump in electricity costs. Folks in that region are LOUD people, and an unexpectedly cold winter may put Biden’s resolve to the test!
The Eastbound All-Around
- In just 30 weeks, greater Asia-to-US ocean freight spot rates have fallen 75%. Despite a 25% fall from the start of Black Monday to the end of Black Tuesday, it took over 100 weeks for the US stock market to shrink 75% during the Great Depression.
- US West Coast rates have declined for 13 straight weeks and now sit at the same level as June 2020, the very first month of the famous Covid cargo surge. We asked the ghost of Billy Preston for comment, and he said, “It WILL go ’round in circles!”
- For the US East Coast, rates have tumbled 60% since this spring and now equal July 2021 levels. In this case, we talked to the ghost of Tyrone Davis, and the famous singer simply smiled and said, “what goes up, must come down!”
- Facing the very real prospect of only breaking even, the ocean carriers have canceled and consolidated service strings rapidly. At the same time, after announcing just 12 blank sailings for October six weeks ago, the carriers now project a whopping 48 blanks for this month.
- As we have previously reported, the lines somewhat quietly brought more capacity to the Transpac during the surge. MSC bought dozens of used vessels; many carriers upgraded the vessel sizes in strings; all alliances launched new services; and, last but not least, the smaller independent lines re-deployed boats to join the gravy train. Thus, even after so many recent service cancellations, total trade lane capacity is currently even with one year ago, though cargo volumes are considerably lower.
- While we estimate that the Transpacific is currently over-supplied with the capacity to the tune of 70,000 TEUs a week, Golden Week did afford the carriers a small reset, with more than 50% of capacity blanked during China’s holiday. Unfortunately, we did not find a tuneful ghost for a golden oldie-inspired quote for Golden Week…(Sigh!)
- Without major corrections on the supply side, there is no current argument for rates to stop sliding in the Transpacific. In fact, many insiders believe that “yesterday’s” market share dynamics (shenanigans?) may be returning to the main stage in the larger ocean cargo drama. There are whispers that certain monolithic carriers whose names start with M want to see the independent smaller carriers scurry back to their natural habitat, leaving the big boys to use their big boats to lower per-unit costs.
