Shap Talk 05 - August, 2002

"Shap" Talk

August 2002 - Issue #5

In This Issue:

Customs Begins Phase 2 Of Customs-Trade Partnership Against Terrorism
Flow Chart Of FDA Import Procedures
Trans-Pacific Rate Hikes Planned
West Coast Strike Update
New Security Measures At Overseas Ports
Carriers From Northern Europe Expecting To Raise Rates In September
Peak Season Surcharge Continues From Asia
Airfreight Space Is Very Tight From Hong Kong/China
BWI Office Relocation
Export Rates Are Very Competitive

Trade Industry News

Customs Begins Phase 2 Of Customs-Trade Partnership Against Terrorism

U.S. Customs is now taking applications from the global transportation community for membership in the agency's C-TPAT program. C-TPAT or Customs-Trade Partnership Against Terrorism program is an initiative between business and government to protect global commerce from terrorism. Air carriers, rail carriers, and sea carriers are all invited to take part in this initiative.

The program calls upon importing businesses to establish policies to enhance their own security practices and those of business partners involved in the supply chain. Once these policies are in effect, imports by these businesses would be given expedited processing at ports of entry.

Importers: please remember that swifter processing is just one of the benefits promised to business by Customs if you participate in the C-TPAT program. Please see all of the benefits of the program listed below under the Fact Sheet and Frequently Asked Questions.

For C-TPAT Fact Sheet and Frequently Asked Questions, please refer to this link:
http://www.customs.ustreas.gov/enforcem/tpat_fact.htm

For Importer Application and information, please refer to this link:
http://www.customs.ustreas.gov/enforcem/instructimp.htm

For Air Carrier Application and information, please refer to this link: http://www.customs.ustreas.gov/enforcem/air_appl.htm

For Frequently Asked Questions for Carriers, please refer to this link: http://www.customs.ustreas.gov/enforcem/carrierfaq.htm

For Rail Carrier Application and information, please ref to this link:
http://www.customs.ustreas.gov/enforcem/rail_appl.htm

For Sea Carrier Application and information, please refer to this link:
http://www.customs.ustreas.gov/enforcem/sea_appl.htm

Ultimately, C-TPAT membership will be available for brokers, warehouse operators, and manufacturers. It is Customs intent to include the entire supply chain in the C-TPAT initiative.

For more information, please refer to http://www.customs.gov/hot-new/pressrel/2002/0709-01.htm or consulting@shapiro.com.

Flow Chart Of FDA Import Procedures

The Food and Drug Administration (FDA) has posted on its web site an import procedure flow chart explaining the entry, sampling, review, release, and refusal steps taken on import transactions. This will help everyone in your organization understand the steps and the entire process that FDA goes through on each and every import transaction subject to FDA. This document is also available in Chinese, French, German, Korean, Spanish, and Russian. Please review this entire document at: http://www.cfsan.fda.gov/~lrd/import.html.

Trans-Pacific Rate Hikes Planned

The Journal of Commerce recently reported that effective August 19, 2002 shipping lines transporting U.S. imports from Asia intend to raise their per container freight rates.

The Transpacific Stabilization Agreement (TSA), which is a discussion agreement among 14 of the largest steamship lines for eastbound Pacific routes, did not anticipate the recent dramatic increase in imports from Asia. Intermodal and all-water services from Asia have been close to capacity.

The TSA is proposing the following rate increases for containerized imports from Asia: $225 per 20-foot container, $300 per 40-foot, $340 per 40-foot high-cube and $380 per 45-foot container.

The proposed guidelines are voluntary. The discussion agreement has no enforcement power and the individual members are free to negotiate other rates with customers.

It’s important for importers to review their existing contracts for any carrier that provides service from Asia to see if any protection is provided for rate increases. Any contract absent of a rate increase clause or importers operating without a service contract should factor these potential rate increases into their final costs.

If you have any further questions, please contact Marketing@shapiro.com.

West Coast Strike Update

The PMA (Pacific Maritime Association) made an offer to the ILWU that called for a 17% wage and benefit increase; however, this offer was rejected by the Union. The ILWU is asking the union membership to vote on an authorization to strike. Further negotiations are not scheduled to resume until August 13, 2002.

The current contract expired on July 1, 2002. At this time, there has not been a noticeable delay in cargo moving from west coast ports.

New Security Measures At Overseas Ports

The U.S. Customs Service is working with various overseas ports by inspecting U.S. destined containers prior to loading on the vessel. Ports involved are Rotterdam, Le Havre, Antwerp, and Singapore with more to follow. Ultimately, shippers will have to deliver their shipments earlier to these ports rather than within 24 hours prior to sailing to allow for the additional inspection time.

Carriers From Northern Europe Expecting To Raise Rates In September

All indications are that the ocean carriers from Northern Europe are going to try and raise rates in the North Atlantic Trade. The carriers say they are losing money and vessels are overbooked. They will most likely try to raise rates by $200/20' container and $300/40' container. Samuel Shapiro & Company, Inc. and our overseas European partners have multiple carrier options at our importers' disposal.

Peak Season Surcharge Continues From Asia

Carriers are still charging Peak Season Surcharges for shipments originating in Southeast Asia. Most carriers are charging $225/$300/$340 per 20', 40' & 40' HC. However, due to capacity issues, additional increases could occur in mid-late August. Peak Season is supposed to end October 31, 2002.

Airfreight Space Is Very Tight From Hong Kong/China

The market is very strong on airfreight from Hong Kong & China. Carriers are leaving with planes near capacity. The Hong Kong - JFK lane is particularly surging.

Shapiro Products & Services

BWI Air Office Relocation

The BWI Air office of Samuel Shapiro & Company, Inc. has consolidated with our Baltimore seaport operation.

The new physical location and mailing address for Baltimore air shipments arriving at BWI is:

401 East Pratt Street
Suite 500
Baltimore, MD 21202

The new phone and fax numbers are:
(410) 539-0540 - PHONE
Kathy Marshall ext. 215
Genia Blades ext. 229
James Shapiro ext. 271
(410) 685-7231 - FAX

Please make the necessary changes to your fax machine and express courier envelopes to ensure your paperwork is received promptly. If you have any additional questions, please contact Kathy Marshall.

Export Rates Are Very Competitive

Due to weak demand for U.S. imports, capacity is very low on vessels traveling to Europe and Asia and carriers are offering very competitive rates for these trade lanes. Contact our Export Department in Baltimore at 1-800-695-9465 Ext 251 or Atlanta at 1-800-767-8089, Ext. 221 for a quotation.