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"Shap" Talk
August 2004 - Issue #28
In This Issue:
Miami Struggling with Post-Strike Backlog
Smart Containers Could Prevail
Export - FDA Notification and Recordkeeping Requirements
The ITC Posts Future Tariffs Lookup to its Web Page
The Committee for the Implementation of Textile Agreements Issues Notice on Quota Year End Procedures
Burma Sanctions Renewed for an Additional Year
Congress Approves U.S.- Australia FTA
Commerce Department Makes Announcement Regarding Copper Scrap and Copper-Alloy
Transportation Update
Shapiro Will Host International Transportation & Logistics Seminar
Trade Industry News
Miami Struggling with Post-Strike Backlog
The Port of Miami is still struggling to clear thousands of containers that stacked up during a two week strike by truckers. The port of Miami has waived some charges for the delayed deliveries of container by either extending free time or postponing the first free day of containers. Port officials predict that it could take two weeks to clear the backlog.
The trucker strike in Miami ended when a federal judge issued a temporary restraining order. The drivers in Miami are seeking higher wages and they state that long waits at the port make their $50-a-load payment insufficient. Truckers are also saying that they should not be required to pay for liability insurance, which is being deducted from their paychecks.
Truckers in Miami have raised their rates for local moves by $100 or more per container and there is no word as to when the rates will return to their normal levels there.
Source: Article from JOC, Volume 5, Issue 29. July 19, 2004
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Smart Containers Could Prevail
A number of private security companies have started using containers outfitted with sensors to detect tampering as well as temperature fluctuations inside and outside of import boxes. Published reports have also suggested that Ports in both New York and New Jersey have begun testing these so called "smart containers" in response to a growing concern on Capital Hill, that terrorists will likely use a method to infiltrate U.S. seaports.
In June of this year, due in part to the Department of Homeland Security's Container Security Initiative (CSI), several companies have been encouraged to adopt the smart container concept as reported by the Journal of Commerce last month. Smart container technology has the capacity of being tracked via satellite, and the ability of notifying authorities instantly of security breaches.
Although not mandated by Federal Authorities, "smart containers" will likely enable government officials to speed the inspection process at U.S. ports. The U.S. Customs and Border Protection has already instituted another initiative partnering business and Government called the Customs
Trade Partnership Against Terrorism (C-TPAT). As a reward for becoming certified under
C TPAT, participants enjoy reduced container inspections as suggested in the C-TPAT Fact sheet located on CBP's website.
It has been suggested by Customs officials that C-TPAT participants will be asked—or required—in the near future to use "smart containers". C-TPAT is a voluntary program between Customs & Border Protection (CBP) and the import community to reduce threat risks within their supply chains.
In order to ensure the safe passage of containers arriving into the U.S., two government initiatives have been implemented: The Container Security Initiative (CSI) and Smart and Secure Trade Lanes (SST).
CSI was created by order of the U.S. Customs Service (January 2002) in response to potential terrorist threats against imported goods delivered into the U.S. As described by Commissioner Robert C. Bonner at the US Customs Trade Symposium in 2002, CSI identifies high-risk containers at foreign ports and screens those containers in search of weapons of mass destruction.
SST was devised by the Strategic Council on Security Technology to explore new advances in security by working with Customs, various governmental agencies and port industry executives.
Customs has intensified efforts to encourage all importers to voluntarily participate in the C-TPAT program. Samuel Shapiro & Company, Inc. offers comprehensive C-TPAT assessment and consulting services. For more information, please contact consulting@shapiro.com or 1-800-695-9465, Ext. 281.
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Export - FDA Notification and Recordkeeping Requirements
The Food and Drug Administration (FDA) is considering whether to revise its regulations pertaining to export notification and recordkeeping. FDA has received a petition for reconsideration claiming that the agency lacks legal authority to inspect export records held by food and cosmetic companies. The petition also claimed that the regulations describing the types of records that should be kept to demonstrate that an exported product does not conflict with the foreign country's laws are overly burdensome. FDA is inviting comment on the issues raised by the petition. The FDA Export Reform and Enhancement Act significantly changed and simplified the export requirements for unapproved human drugs, biological products, devices, and animal drugs.
FDA issued its opinion about the records it expects companies to possess when exporting food and cosmetics. The full Federal Register Notice dated June 1, 2004 (Volume 69, Number 105) [Page 30842-30845] can be found at: http://a257.g.akamaitech.net/7/257/2422/14mar20010800/edocket.access.gpo.gov/2004/04-12271.htm
Written or electronic comments must be submitted by August 16, 2004. You may submit comments, identified by Docket No. 1998N-0583, by any of the following methods:
Federal e-Rulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments. Agency Web site: http://www.fda.gov/dockets/ecomments.
Follow the instructions for submitting comments on the agency Web site. E-mail: fdadockets@oc.fda.gov. Include Docket No. 1998N-0583 in the subject line of your e-mail message. FAX: 301-827-6870.
Mail/Hand delivery/Courier [For paper, disk, or CD-ROM submissions]: Division of Dockets Management, 5630 Fishers Lane, rm. 1061, Rockville, MD 20852.
Instructions: All submissions received must include the agency name and Docket No. or Regulatory Information Number (RIN) for this rulemaking. All comments received will be posted without change to http://www.fda.gov/dockets/ecomments, including any personal information provided. For detailed instructions on submitting comments and additional information on the rulemaking process, see section IV of the SUPPLEMENTARY INFORMATION section of this document. Docket: For access to the docket to read background documents or comments received, go to http://www.fda.gov/dockets/ecomments and/or the Division of Dockets Management, 5630 Fishers Lane, rm. 1061, Rockville, MD 20852.
For further information, please contact compliance@shapiro.com.
Source: AAEI - Volume 104 Number 25, June 28, 2004, FDA and Export Records: Call to AAEI Members for Feedback
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The ITC Posts Future Tariffs Lookup to its Web Page
The United States International Trade Commission (ITC) has posted scheduled U.S. tariff reductions to their web page. The Harmonized Tariff Schedule of the United States (2004), including supplemental changes that are effective July 1, 2004, can also be viewed from their home page.
In addition, the “General” Column 1 staged duty rate reductions for six HTS numbers are expected to continue through 2008. Various HTS chapters are:
- 1701, which provides for cane or beet sugar and chemically pure sucrose, in solid form.
- 1702, which provides for other sugars, including chemically pure lactose, maltose, glucose and fructose, in solid form; sugar syrups not containing added flavoring or coloring matter; artificial hone, whether or not mixed with natural honey; caramel.
- 2106, which provides for food preparations not elsewhere specified or included.
Certain countries will continue to benefit from column 1 “special” staged duty reductions under free trade agreements, such as the Chile FTA (CLFTA), Singapore FTA (SGFTA), and the Jordan Free Trade Agreement (JOFTA).
The ITC tariff and trade data web pages can be viewed at the following locations:
http://dataweb.usitc.gov/scripts/tariff_reduction.asp
http://hotdocs.usitc.gov/tariff_chapters_current/toc.html
Source: United States International Trade Commission Interactive Tariff and Trade Data Web: http://dataweb.usitc.gov/
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The Committee for the Implementation of Textile Agreements
Issues Notice on Quota Year End Procedures
The Committee for the Implementation of Textile Agreements (CITA) issued a notice detailing policies and procedures associated with the expiration of textile and apparel quotas on January 1, 2005. The Federal Register notice deals with visa requirements and over-quota shipments for goods exported in 2004.
The CITA notice serves to remind interested parties that charges against the limits subject to U.S. bilateral agreements, the Uruguay Round Agreements Act and the Uruguay Round Agreement on Textiles and Clothing are by “date of export” and not “date of entry”. Shipments exported in 2004 in excess of the agreed limits are in violation of the terms of these agreements.
The CITA notice is included in the Federal Register / Vol. 69, No 122 / Friday, June 25, 2004 and deals with visa requirements and over-quota shipments exported in 2004.
The Federal Register notice can be viewed at the following web sight:
http://frwebgate6.access.gpo.gov/cgi-bin/waisgate.cgi?WAISdocID=963006385134+1+0+0&WAISaction=retrieve
Sources: Committee for the Implementation of Textile Agreements, Shipments of Cotton, Wool, Man-Made Fiber, Silk Blend and Other Vegetable Fiber Textiles and Apparel In Excess of Agreement Limits, appearing in the Federal Register / Vol. 69, No 122 / Friday, June 25, 2004.
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Burma Sanctions Renewed for an Additional Year
On June 24, 2004, the U.S. Senate passed a joint resolution that renewed the economic sanctions against Burma for an additional year. The economic sanctions against Burma are imposed by the Burmese Freedom and Democracy Act of 2003, which passed after an attack on Burma’s democratic opposition party and the arrest of opposition leaders.
The Burmese Freedom and Democracy Act states that any article that is a product of Burma (Myanmar) is banned from importation into the United States until Congress is certain that Burma has made significant improvements in the areas of human rights, democracy, and other critical conditions. The Act requires Congress to review conditions in Burma on an annual basis in order to decide whether it is necessary to renew the economic sanctions.
The Burmese Freedom and Democracy Act may only be renewed for a maximum of three years and it would have expired on July 28, 2003, if not renewed.
Sources: “Congress Votes to Renew Economic Sanctions Against Burma” on U.S. International Information Programs website at http://usinfo.state.gov/xarchives/display.html?p=washfile-english&y=2004&m=June&x=20040625143054BPuH0.813183&t=livefeeds/wf-latest.html and “Import Ban on Burma Renewed for an Additional Year” appearing on International Trade Today on July 9, 2004.
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Congress Approves U.S.-Australia FTA
On July 14, 2004, the House of Representatives approved the U.S.-Australia Free Trade Agreement (FTA) Implementation Act. The U.S.-Australia FTA will eliminate duties on more than 99 percent of manufactured goods as soon as the agreement enters into force, while duties on other commodities will be phased out over a period of up to ten years.
According to the Office of the U.S. Trade Representative, trade with Australia has increased dramatically during the past decade, totaling more than $19 billion in 2001. U.S. Trade Representative Zoellick notes that, “in addition to freeing trade in industrial goods, the new FTA removes barriers to agricultural products, investment, government procurement, and services while increasing protection for intellectual property and freeing electronic commerce”.
The U.S.-Australia FTA will bring immediate benefits to U.S. manufacturing sectors, including fabricated metal products; construction equipment; electrical equipment and appliances; furniture and fixtures; medical and scientific equipment; information technology products; non-electrical machinery; and paper and wood products, among others. It is expected that the elimination of duties will result in tariff savings of about $300 million for U.S. manufactured goods exported in the first year of the agreement. In order for duties on textiles and apparel to be eliminated, the goods are required to meet the FTA’s yarn-forward rule of origin. The Agreement also calls for the eradication of a variety of non-tariff barriers that limit or alter trade flows.
Sources: “U.S.-Australia Free Trade Agreement” appearing in U.S. Trade Representative’s website at http://www.ustr.gov/new/fta/Australia/summary.htm and “Statement of U.S. Trade Representative Robert B. Zoellick Following House Approval of Australia Free Trade Agreement” appearing in U.S. Trade Representative’s website on July 14, 2004 at http://www.ustr.gov/releases/2004/07/2004-07-14-statement-ausftahouse.pdf
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Commerce Department Makes Announcement
Regarding Copper Scrap and Copper-Alloy
The Commerce Department has determined that neither monitoring nor controls on exports of copper and copper-alloy scrap are necessary.
The Copper & Brass Fabricators Council, Inc. and the Non-Ferrous Founders’ Society filed a short supply petition on April 7, 2004 requesting that the Commerce Department impose monitoring and controls on exports of recyclable metallic materials containing copper. The Commerce Department carefully reviewed and analyzed this petition in accordance with Sections 3(2)(C) and 7(c) of the Export Administration Act (EAA), as amended.
The Department’s findings regarding the five statutory determinations are as follows:
(1) The volume of exports of copper-based scrap has increased significantly over the time period presented in the petition, 1999-2003 and year-to-date 2004. Decreased domestic consumption, including the closure of the last independent U.S. secondary smelter, has been an important factor in the rise of exports. Accordingly, the increase in exports is somewhat less significant when it is considered in relation to domestic demand, as required by the statute.
(2) Copper scrap prices have increased significantly during the time period presented in the petition, 1999-2003 and year-to-date 2004. However, the evidence does not demonstrate the existence of a shortage.
(3) The world market for copper cathode, not the level of U.S. exports of copper-based scrap, is the most important determinant in the fluctuation of domestic copper scrap prices.
(4) The evidence does not demonstrate a significant adverse effect on the national economy or any sector thereof resulting from the domestic copper scrap price increase.
(5) Monitoring, export controls, or both, are unnecessary at this time in order to achieve the policy of Section 3(2) (C) of the EAA.
Although the Commerce Department did not find sufficient evidence to warrant imposing monitoring or export controls, it will work to refine the Schedule B classifications for copper and copper-alloy scrap in order to better delineate the varieties of scrap that are being exported. The Commerce Department also will work closely with the Office of the United States Trade Representative and the Department of State to address any foreign government practices that are distorting trade in copper and copper-alloy scrap.
Please refer to the BIS website for all documents relating to short supply petition
regarding copper and copper alloy scrap. http://www.bis.doc.gov/DefenseIndustrialBasePrograms/OSIES/SHORTSUPPLY/
BIS press release dated July 21, 2004. http://www.bis.doc.gov/News/2004/copperjuly21.htm
For further information, please contact compliance@shapiro.com.
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Transportation Update
FAR EAST
Space is still very tight from the Far East to the USA, especially all water service to the East Coast. The congestion at west coast ports has caused many importers to utilize all water service and the carriers do not have the capacity. .
Importers are recommended to advise their suppliers to book their shipments at least 2-3 weeks in advance of sailing to secure space.
This is the height of the Peak Season and carriers should be operating at near 100% capacity for the next two months.
BRAZIL NEWS
The situation in Brazil is still very bad. There are so many containers that need to be shipped that many carriers will not even take bookings for new shipments. It is almost impossible to obtain space at this time even with the rate increases that took place in July. Most carriers raised their rates by $500.00 per container.
The situation is still very grave in Santa Catarina state, where the ports of Sao Francisco do Sul and Itajai are domiciled. The infrastructure is not in place to handle the volume coming out of these ports.
There is hope that larger vessels will be added into the service by Mediterranean Shipping Company. All of their Brazilian Port Managers are going to their Geneva headquarters for a meeting in late July and hopefully an announcement will be forthcoming. Mediterranean Shipping is one of the few carriers that do not share their vessels with other carriers.
ARGENTINA & URUGUAY
Rates from Argentina and Uruguay will increase on par with the rates from Brazil. Space is also very tight from both countries.
EUROPE
On July 16, 2004 the bunker surcharge will increased from Northern Europe. The new level includes $ 198.00 per 20’ container and $ $396.00 per 40’ container to east coast and gulf ports. On August 20, 2004 the bunker surcharge will decrease to $160.00 per 20’ container and $ 320.00 per 40’ container.
Shipments to west coast ports will rise to $ 29700 per 20 foot container and $ 594.00 per 40 foot container. This is an increase of $60.00 per 20’ container and $120.00 per 40’ container.
MEDITERRANEAN
Most carriers did take increases on July 1, 2004; however, many carriers did increase their bunker surcharge on July 1, 2004 from $ 192.00 per 20’ container and $ 384.00 per 40’ container. Mediterranean Shipping increased theirs to $195.00 per 20’ container and $ 390.00 per 40’ container on July 15, 2004.
Carriers will increase rates from Turkey to the USA. In addition the bunker surcharge will be raised to same level as the Mediterranean ports.
Carriers have reduced capacity out of Italy to the USA; this has resulted in major congestion out of Italy. There is a surge of exports out of Italy as factories prepare for their August shutdown. (Most factories in Italy are closed from August 2, 2004 until August 23, 2004.) The reduction in capacity has added to normal chaos out of Italy at this time.
AIR NEWS
From Europe air freight is still very strong. Even with the added summer flights, belly space is very tight from all origin points to the USA.
Export air rates from the USA are still low in comparison to import. It’s a very competitive market right now as carriers try to fill up their planes leaving the USA.
EXPORT OCEAN NEWS
Fuel Surcharges to northern Europe increased in the same amount as import; they are also expected to decrease on August 20, 2004. Carriers are reporting that their vessels are going out at a higher capacity but are still below import levels.
DOMESTIC USA
There are still major rail delays from the west coast to the east coast due to a shortage of rail cars, personnel issues and surges in volume from Asia. Containers are backing up from Long Beach/L.A. to the East Coast. There have been delays reported from Oakland and Seattle/Tacoma as well. MLB transit is not as fast as usual due to these delays.
Union Pacific Corp has announced that it is taking additional measures to manage traffic growth on its rail network. It stated that it will limit car loadings and the overall inventory of railcars in key corridors, including lines between Seattle and Roseville, California; Los Angeles and El Paso; Los Angeles and Salt Lake City; and the central corridor through Iowa and Illinois.
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Shapiro Products & Services
Shapiro Will Host International Transportation & Logistics Seminar
Samuel Shapiro and Company, Inc. along with The Jones Motor Group will be hosting a half-day seminar on Thursday, August 12, 2004, from 8:30 am to 12 noon, on International Transportation and Logistics for importers and exporters. Topics will include: letters of credit, INCOTERMS, over dimensional freight, domestic transportation, understanding ocean and air freight containers and more.
Following the seminar, come join us for the Propeller Club Crab Feast. We will provide courtesy round-trip transportation from the World Trade Center immediately following the seminar.
For more information contact PJ Bennett or Denice Ziolkowski by phone; 410-539-0540 ext. 206, by fax; 410-547-6935, by email; Denice@shapiro.com or regular mail:
Samuel Shapiro Company, Inc.
World Trade Center
401 East Pratt Street, Suite 500
Baltimore, MD 21202
Seminar Location:
The World Trade Center
401 East Pratt Street
Constellation Room (21st Floor)
Baltimore, MD 21202
Cost:
$150.00 per person
$100.00 for each additional attendee from the same company
$ 45.00 crab feast ticket per person (in addition to your seminar cost)
Check In:
Check in and continental breakfast begins at 8:30 am.
Deadline: Registrations should be mailed or faxed prior to Friday, July 30, 2004. Late registration available through August 9th at an additional $25 charge.
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