Trending Now

Shippers Frustrated as Spot rates Rise With Demand

New Articles

AAPA lauds fiscal year 2019 Energy and Water Development Appropriation

Dredging will allow ports to handle more shipments of export cargo and import cargo in international trade.
Archives, Global Logistics, Global Trade Daily, News, Ocean Ports, U.S. Ports

AAPA lauds fiscal year 2019 Energy and Water Development Appropriation

Leave a comment

Congressional leaders achieved a major accomplishment with the passage of the Energy and Water, Legislative Branch, and Military Construction and Veterans Affairs Appropriations Act, which bundles three of the 12 fiscal year 2019 appropriations bills. This marks the first time since 2004 that the Energy and Water Development appropriation was passed before the start of the new fiscal year on October 1.

The American Association of Port Authorities (AAPA) is pleased to see congressional passage of this bill.

“We applaud both the Senate and House Appropriations Committees for their successful efforts to pass this important funding bill before the new fiscal year begins said Kurt Nagle, AAPA’s president and CEO. “We very much appreciate the committees’ leadership for recognizing the nexus between water resources development and economic prosperity. Federal investments in navigation-related infrastructure are an essential and effective utilization of limited resources, paying dividends through increased trade and international competitiveness, sustainable job creation and more than $320 billion annually in federal, state and local tax revenues.”

The Energy and Water Development appropriation funds the US Army Corps of Engineers’ navigation program, including deep-draft navigation construction and maintenance. Having the appropriation enacted will enable the Corps to maximize efficient use of the funds, especially with seasonally restricted dredging events in the first and second quarters of the fiscal year. Enactment eliminates 2019 work being subject to using continuing resolutions, which provide partial funding based on the previous year’s appropriation.

The appropriations bill includes $1.54 billion for Harbor Maintenance Tax (HMT)-funded work, which is 91 percent of the estimated fiscal 2018 HMT revenues of $1.687 billion and a 10 percent increase over fiscal 2018 HMT funding of $1.4 billion. As such, the bill continues the trend of hitting or exceeding the HMT funding targets, set in WRDA 2014, for the fifth year in a row. The bill also increases funding amounts and allows new starts in both the Corps of Engineers’ studies and construction accounts. It also funds Donor and Energy Transfer ports at $50 million, the full amount authorized for the program and the amount AAPA requested in its August letter to House and Senate conference committee leaders in support of the Corps’ navigation program funding.

Trump has imposed tariffs on Chinese shipments of export cargo and import cargo in international trade.
Archives, Global Trade Daily, Imports/Exports, International Trade, News

US tech companies tried to avert latest China tariffs

Leave a comment

Four major US tech companies sent a letter to the US Trade Representative Robert Lighthizer, asking the administration to reconsider imposing the new tariffs on $200 billion worth of Chinese imports announced on Monday.

The companies, Dell, Cisco, Juniper Networks, and Hewlett Packard, are concerned the tariffs will increase the costs of their networking equipment, leading to the loss of profits and US jobs.

The new Trump tariffs, unlike the $50 billion in Chinese products the president hit in his first tariff phase  in July will affect consumer products such as appliances and furniture, and not only industrial equipment.

United States importers will start pay an additional 10-percent tariff for the specified items next week, a levy which will increase to 25 percent at the end of the year, according to published reports.

“If USTR were to impose a 10 to 25 percent additional duty on networking products and accessories, it would cause broad, disproportionate economic harm to US interests, including our companies and US workers, our customers, US consumers, and broader US economic and strategic priorities,” said the companies’ letter to Lighthizer.

“Given the enormous volume of potentially impacted trade,” the letter went on to say, “the duties would impact over $23 billion in total imports and create potential duty liability for US consumers of between $2.3 billion and $5.7 billion per year.”

The companies are also concerned that the tariffs would hinder innovations important to the US government, such as cloud computing and 5G networks.

“These tariffs are all pain, no gain for American businesses and workers,” said Freedom Partners Executive Vice President Nathan Nascimento. “Countless American employers weighed in on this idea during the comment period and told the administration these tariffs would be job-killers. Unfortunately, their pleas have fallen on deaf ears.”

The new tariffs would cover around half of Chinese goods entering the US. The Trump administration slapped 25-percent tariffs on $34 billion of Chinese imports in July and another $16 billion in August. China has thus far responded measure for measure, but Beijing’s power in this area is limited US exports to China are far lower than trade moving in the opposite direction. China says it will retaliate against the latest round of US tariffs. Trump has said he would then move to tax all Chinese imports.

If the tariffs go into effect, companies could request exemptions, but reporting on the Section 252 steel and aluminum tariffs indicate this is a very slow process.

Group takes green approach to handling shipments of export cargo and import cargo in international trade.
Archives, Global Logistics, Global Trade Daily, News, Ocean Ports

Leading port authorities combine forces to combat climate change

Leave a comment

The Port of Rotterdam Authority has announced the launch of the World Ports Climate Action Program. In this new international initiative, the port authorities of Hamburg, Barcelona, Antwerp, Los Angeles, Long Beach, Vancouver, and Rotterdam will be joining forces and working together on a number of projects that address the issue of global warming.

The World Ports Climate Action Program focuses on several specific actions. It aims to increase efficiency of supply chains using digital tools; advance common and ambitious public policy approaches aimed at reducing emissions within larger geographic areas; accelerate development of in-port renewable power-2-ship solutions and other zero emission solutions; accelerate the development of commercially viable sustainable low-carbon fuels for maritime transport and infrastructure for electrification of ship propulsion systems; accelerate efforts to fully de-carbonize cargo-handling facilities in the ports.

“The Paris Agreement set a clear target,” noted Allard Castelein, president and CEO of the Port of Rotterdam Authority. “We need to limit global warming to well below 2°C. It is vital in this context to reduce the emissions generated by maritime transport. As critical hubs in the global maritime transport network, I am convinced that ports can make a significant contribution. I am pleased to see that international port authorities have taken on a leading role in this area, committing to collaborative projects that can further advance the de-carbonization of the maritime transport sector.”

The port authorities called upon the shipping industry and other ports to join the commitment to deliver on the Paris Agreement and to work together on actions that yield measurable results.

To increase the impact of the program, the port authority network asks governments and regulators to adopt global—or, at the very least, international—policies for CO2 pricing and provide funding support to relevant R&D and pilot projects.

The participants in the World Ports Climate Action Program will work in collaboration with stakeholders inside and outside the maritime sector. As a first action, the partners will be drawing up a work plan. They will use the World Ports Sustainability Program to reach out and communicate progress of this Climate Action program.

New NAFTA would govern North American shipments of export cargo and import cargo in international trade.
Free Trade Agreements, Global Trade Daily, Imports/Exports, In The News, International Trade, News

North American boating industry: Bilateral NAFTA deal is a half measure

Leave a comment

In response to United States Trade Representative (USTR) Robert Lighthizer’s notification that the Trump Administration plans to proceed on revising the North American Free Trade Agreement (NAFTA) without Canada, Thom Dammrich, President of the National Marine Manufacturers Association (NMMA), and Sara Anghel, President of NMMA Canada, spoke out in opposition to the scheme.

“The announcement is a mixed blessing,” said Dammrich. “While the agreement between the United States and Mexico is good news for American manufacturers, maintaining the trilateral nature of the trade pact is vital to the continued growth and success of our economy and the recreational boating industry alike. As America’s second largest trading partner, and our industry’s largest export market, Canada must be included before this deal is finalized and sent to Congress for approval. As such, we urge the administration to focus on the positive momentum and goodwill generated recently to foster productive conversations with Canada.

“In addition, to deem the administration’s NAFTA refresh a success, the changes must put American workers and businesses in a position of strength,” Dammrich added. “That means promoting free and fair trade between all three countries so that American-made industries, like marine manufacturing, can flourish.

“We urge the administration to bring Canada back into the fold,” Dammrich concluded, “and swiftly finalize trilateral NAFTA renegotiations. Proud domestic industries like the recreational boating industry—and the 650,000 American jobs we support—are counting on it.”

The “announcement is a major setback for the $10 billion-Canadian recreational boating industry, which employs 75,000 Canadians,” said Anghel. “As long-standing trade partners, free and fair trade between our countries is imperative to the strength of our respective economies. In the absence of NAFTA, businesses and workers on both sides of the border will suffer.

NMMA Canada was “hopeful that continued negotiations would finally result in a better deal for Canadians, Americans, and Mexicans alike,” Anghel added. “Unfortunately, this was not the case. Negotiators must stay at the table until all parties are satisfied—ideally, in short order.”

Trump has imposed tariffs on Chinese shipments of export cargo and import cargo in international trade.
Archives, Global Trade Daily, Imports/Exports, In The News, International Trade, News

Ballcap industry alliance formed in opposition to Section 301 tariffs

Leave a comment

Can you imagine going to the big game without your favorite team’s baseball cap–the playoffs, the championships or the World Series?

According to industry executives, Section 301 tariffs will be devastating to America’s headwear industry—killing jobs and shutting down growth. The USTR’s comment period conclude recently, and the buzz in Washington is tariffs could be imposed at any time.

The Trump administration has proposed a tariff increase to the headwear category (HTSUS 6505.00) in the case being considered by the United States Trade Representative for Section 301 tariffs (Docket Number: USTR-2018-0026).

To educate decision-makers and opinion leaders about the facts, America’s baseball cap industry has created the American Headwear Alliance (AHA)—and the organization’s officials say are not going to go down quietly in this battle. The AHA includes eight companies located in Massachusetts, Texas, Maryland, Missouri, Arkansas, and Oregon.

The AHA recently sent a letter to US Trade Representative Robert Lighthizer, making the following points: that tariffs on imported Chinese-made headwear will kill the industry; the cut-and-sew industry in China can’t just move to the US; that baseball cap imports have become one of America’s biggest international trade intellectual property and human rights success stories; that the industry’s imports are low-tech and pose no risk to national security; and that Section 301 tariffs on imported headwear will not help the Trump Administration attain its goals.

According to the letter, “The majority of our imported products will increase from 7.5 percent up to 32.5 percent on average, which will result in our companies attempting to balance an enormous annual cost increase that will be difficult, if not impossible to accomplish. It’s very unlikely customers of our products can afford to—nor would they choose to—pay 25 percent more for a ballcap.”

The companies are concerned that their businesses will stagnate and decline. The infrastructure required to produce ballcaps moved overseas decades ago and it is doubtful it could be re-established in the US. “There are currently no operations outside of China that could produce the quality of goods at the volume output required by our companies,” the letter said.

Rising trade tensions jeopardize shipments of export cargo and import cargo in international trade.
Archives, Commentary, Global Trade Daily, Imports/Exports, International Trade

IMF: Global Expansion still strong but less even

Leave a comment

Rising tensions over international trade is jeopardizing the broad global economic expansion that began roughly two years. According to a report from the International Monetary Fund, the global economy has plateaued and become less balanced.

In the IMF’s latest World Economic Outlook Update, the organization continues to project global growth rates a t a healthy 3.9 percent for 2018 and 2019. The problem is that “the risk of worse outcomes has increased.”

In advanced economies, growth remains generally strong but it has slowed in places like Japan, the United Kingdom, and the eurozone. The United States economy continues to grow robustly and job creation is up, but the IMF projects that US growth will decelerate over the next few years, as the long recovery and the effects of fiscal stimulus wane. The IMF projects 2018 growth of 2.4 percent for advanced economies and 2.2 percent growth for 2019.

Emerging and developing economies are projected to grow at a 4.9-percent clip this year and 5.1 percent next year. “These aggregate numbers,” the report warned, “conceal diverse changes in individual country assessments.”

China continues to grow in line with the IMF’s earlier projections but some large economies in Latin America, Europe, and Asia are projected to grow slower than in the IMF’s April forecasts. “Supply disruptions and geopolitical tensions have helped raise oil prices,” the report noted, “benefiting emerging oil exporters (for example, Russia and Middle Eastern suppliers) but harming importers (for example, India).”

Per capita incomes in many countries in sub-Saharan Africa will rise but growth will fall short of the levels seen during the 2000s.

The risk of escalation of current trade tensions “is the greatest near-term threat to global growth,” according to the report. IMF “modeling suggests that if current trade policy threats are realized and business confidence falls as a result, global output could be about 0.5 percent below current projections by 2020. As the focus of global retaliation, the United States finds a relatively high share of its exports taxed in global markets in such a broader trade conflict, and it is therefore especially vulnerable.”

Commerce Department in investigating antidumping and countervailing duties on shipments of export cargo and import cargo in international trade.
Archives, Global Trade Daily, Imports/Exports, International Trade, News

US to investigate imports of steel racks from China

Leave a comment

US Secretary of Commerce Wilbur Ross has announced the initiation of new antidumping duty (AD) and countervailing duty (CVD) investigations to determine whether steel racks from China are being dumped in the United States and to determine if producers in China are receiving unfair subsidies.

The investigations were initiated based on petitions filed by the Coalition for Fair Rack Imports, the members of which are eight companies from West Virginia, California, Pennsylvania, North Carolina, Minnesota, Wisconsin, Virginia, and Tennessee. The petitioner estimates that imports of steel racks in 2017 were valued at approximately $200 million.

In the AD investigation, Commerce will determine whether imports of steel racks from China are being dumped in the US market at less than fair value. The alleged dumping margins range from 130.0 to 144.5 percent.

In the CVD investigation, Commerce will determine whether Chinese producers of steel racks are receiving unfair government subsidies. There are 28 subsidy programs alleged, including five preferential loan and interest rate programs, one debt-to-equity swap program, six income tax and other direct subsidy programs, two indirect tax programs, seven less than adequate remuneration (LTAR) programs, as well as seven grant programs.

Foreign companies that price their products in the US market below the cost of production or below prices in their home markets are subject to antidumping duties.  Foreign companies that receive financial assistance from foreign governments that benefits the production of goods from foreign companies and is limited to specific enterprises or industries, or is contingent either upon export performance or upon the use of domestic goods over imported goods, are subject to countervailing duties.

If Commerce makes affirmative findings in these investigations, and if the US International Trade Commission (ITC) determines that dumped and/or unfairly subsidized US imports of steel racks from China are causing injury to the US industry, Commerce will impose duties on those imports in the amount of dumping and/or unfair subsidization found to exist.

Antidumping and countervailing duty laws provide American businesses and workers with an internationally accepted mechanism to seek relief from the harmful effects of dumping unfairly priced and unfairly subsidized imports into the United States.  Commerce currently maintains 448 antidumping and countervailing duty orders which provide relief to American companies and industries impacted by unfair trade.

During Commerce’s investigations into whether steel racks from China are being dumped and/or unfairly subsidized, the ITC will conduct its own investigations into whether the US industry and its workforce are being harmed by such imports.  The ITC will make its preliminary determinations on or before August 6, 2018.  If the ITC preliminarily determines that there is injury or threat of injury, then Commerce’s investigations will continue, with the preliminary CVD determination scheduled for September 13, 2018, and preliminary AD determination scheduled for November 27, 2018.

If Commerce preliminarily determines that dumping and/or unfair subsidization is occurring, then it will instruct US Customs and Border Protection to start collecting cash deposits from all US companies importing steel racks from China.

Final determinations by Commerce in these cases are scheduled for November 27, 2018, for the CVD investigation, and February 11, 2019, for the AD investigation, but those dates may be extended.  If Commerce finds that products are not being dumped and/or unfairly subsidized, or the ITC finds in its final determinations there is no harm to the US industry, then the investigations will be terminated and no duties will be applied.

Trump has proposed tariffs on automobile shipments of export cargo and import cargo in international trade.
Archives, Commentary, Global Logistics, Global Trade Daily, Imports/Exports, In The News, International Trade

Proposed auto tariffs will hit US car buyers in the wallet

Leave a comment

President Donald Trump’s proposal to impose tariffs on imported automobiles, SUVs, vans, trucks, and auto parts prompted warnings from automakers that those measures would reverse the industry’s recent job growth. An analysis by the Peterson Institute for International Economics (PIIE) echoed that view, calculating a five-percent drop in auto sector employment if trading partners retaliate on a hypothetical 25-percent tariff. Trump has stated a preference for that level of duty, although some news reports suggest that the expected levy now stands at 20 percent. The ultimate tariff rate will be based on the recommendation of an ongoing investigation by the office of the US Trade Representative, subject to presidential approval.

A recent PIIE report examined the effects of those tariffs on consumers. Auto tariffs would come on top of tariffs imposed on steel and aluminum imports, which automakers say raise auto production costs by one percent. The proposed auto tariffs, according to the report, will raise car prices significantly, “suppressing sales and pushing some buyers with modest incomes out of the new car market entirely.”

The average price of an entry-level compact car will increase between $1,409 and $2,057, according to PIIE, while the price of a new compact SUV/crossover—the most popular vehicle in the United States—will rise by $2,092 to $3,066. Upscale versions of the compact SUV/crossover will rise by $4,708 to $6,971, “because of higher imported foreign content, and hence higher taxes paid, for the typical luxury vehicle.”

Because of crossborder automobile manufacturing supply chains, the report also noted, “there are in fact no 100 percent ‘made in the USA’ cars.” Many foreign brand cars are assembled in the United States and some contain more US content than similar vehicles bearing Detroit brands.

New reefers will carry temperature-controlled ocean shipments of export cargo and import cargo in international trade.
Archives, Global Logistics, Global Trade Daily, News, Ocean Carriers

Largest-ever order of NaturaLINE goes to MSC

Leave a comment

Mediterranean Shipping Company, one of the world’s largest ocean container carriers, will lease 2,000 containers chilled by Carrier Transicold’s innovative, natural refrigerant-based NaturaLINE refrigeration system.

NaturaLINE solves the problem of how to use refrigerants effectively and efficiently—to transport valuable items such as perishable food and pharmaceuticals—while helping to protect the environment. The system utilizes repurposed carbon dioxide (CO2), the refrigerant with the lowest global warming potential (GWP) among all container refrigerants currently in use. MSC’s new refrigerated containers—all 40-foot high-cube models—are being leased from SeaCube Containers LLC.

SeaCube Containers LLC of Woodcliff Lake, New Jersey, owns and manages dry and refrigerated shipping containers and generator sets used to power refrigerated containers. The company leases equipment primarily under long-term contracts to the world’s largest shipping lines globally.

“The NaturaLINE unit’s innovative use of CO2 is the first of its kind available on the reefer market,” said Giuseppe Prudente, chief logistics officer, MSC Mediterranean Shipping Company. “By providing higher level of performance in the minus 40 degrees Celsius deep-frozen range, we can add new capabilities for our growing customer base, particularly for seafood and other high-value frozen commodities. Shipping is already one of the most environmentally sustainable forms of cargo transportation, and we are pleased to continue to improve our environmental performance by equipping our fleet with the latest green technologies.”

The ability to achieve minus 40 Celsius was previously only attainable in container systems using a refrigerant with a GWP nearly 4,000 times higher. The NaturaLINE unit has managed this, along with high efficiency, a quiet operation and tight temperature control.

“The NaturaLINE unit, with CO2 refrigerant, takes users directly to an end state by guarding against regulations, environmental taxes and phase outs that other refrigerants will be subject to during their operational lifespan,” said David Appel, president, Carrier Transicold & Refrigeration Systems. “In addition, CO2 is non-ozone depleting, widely available, relatively inexpensive and nonflammable.”

Carrier Transicold recognized the need for refrigeration technology that would neutralize concerns over GWP—in much the same way that it led the industry away from ozone-depleting refrigerants ahead of Montreal Protocol deadlines 25 years ago.

“In taking leadership to provide a natural-refrigerant solution, Carrier Transicold created what is perhaps the most sound investment a leasing company and shipping line can make—a refrigerated container that will not become obsolete in its lifetime due to pressures from environmental legislation,” said Robert Sappio, CEO, SeaCube. “By fulfilling the NaturaLINE unit’s first order of this magnitude, SeaCube is pleased to be part of this important development for the shipping industry.”

MSC will begin taking delivery of its new containers from SeaCube later in the year. The NaturaLINE units will be supported by Carrier Transicold’s global service network.

Trump has imposed tariffs on Chinese shipments of export cargo and import cargo in international trade.
Archives, Commentary, Global Trade Daily, Imports/Exports, In The News, International Trade

Justifying Trump’s tariffs wars

Leave a comment

Is it possible to justify the Trump administration’s approach to import tariffs on the basis of a precedent that dates back to 1971?

At that time, President Richard Nixon wanted to revamp an international monetary system in which the word’s nations pegged their currency against the US dollar, yet the United States lacked the ability to change its own exchange rate. During the 1960s, the dollar became overvalued, and negotiations with other countries—especially Japan and Germany—to revalue their currencies bore no fruit. So, in August 1971, the Nixon administration slapped a 10-percent duty surcharge on all imports. At a conference in December 1971, Japan, Germany, the United Kingdom, France, Italy, and Sweden all agreed to revalue their currencies. Two days later, the import surcharge was gone.

According to Robert Dohner, a former Deputy Assistant Secretary for Asia at the US Treasury, the import surcharge were illegal for violating rules in the General Agreement on Tariffs and Trade (GATT). Yet Donner argues that breaking the rules can be justified in this instant because they were targeted at a specific behavior and were imposed for a limited period of time. And, of course, the tactic was successful.

Could the same principle be applied to President Donald Trump’s tariff war with China? Trump has correctly identified some objectionable practices of the Chinese, in their quest for technology acquisition. Among these are requiring foreign investments investment through joint ventures with Chinese firms; encouragement of acquisition of foreign technology through mergers and acquisition and investment in startups; the lack of legal redress for theft of commercial technology and trade secrets in its domestic legal system; and cyber espionage directed to the acquisition of commercial technology.

Some of these practices may be illegal under the domestic laws of some of China’s trading partners, but, according to Donner, current international rules are not equipped to deal with these actions. Little if any progress has been made to get the Chinese to cease and desist by way of negotiations.

Enter the Trump tariffs. But according to Donner, “everything that made the import surcharge effective, Trump’s trade policy toward China is not.”

First, it’s not clear what the administration wants from China. The administration’s description of its China policy has included everything from cessation of objectionable technology acquisition practices to the reduction of the bilateral trade imbalance and the reduction of Chinese production capacity to a deal to sell a large quantity of US goods to China.

The Trump administration has also squandered the opportunity to apply pressure on China through friends and allies by starting “trade fights with all of the countries that would be the most effective allies influencing Beijing.”

“Instead of a surgical strike,” Donner concluded, “Trump’s trade policy is carpet-bombing. The result has been widespread collateral damage—including to the United States—and no movement in getting China to address practices the administration has correctly identified.”