September 2005 - Issue #41
In This Issue:
Wood Packing Material Enforcement to Begin September 16th
Commercial Invoice Requirements 101
Additional Tariffs Levied on U.S. Exporters
CBP Issues New NAFTA Certificate of Origin Instructions
ITC to Update Advice on Effects of Reduction / Elimination of Certain U.S. Tariffs
Product Petitions Accepted for 2005 Annual Review of GSP
New and Revised Informed Compliance Publications
Multi-Million Dollar Penalties for Improper Valuation
DR-CAFTA
Mandatory AES Electronic Export Information Filing
New Export DSP-5 Form Likely to be Mandatory on August 29, 2005
New Sealing Procedures for Inspected Containerized Cargo
CSI Now Screens More than Two-Thirds of All U.S. Bound Cargo
Transportation Update – September 2005
PierPASS Program Update
Headquarters Relocation Postponed Until October 7, 2005
Export Essentials Seminar – A Huge Success!
Trade Industry News
Wood Packing Material Enforcement to Begin September 16th
September 16, 2005 will bring full enforcement of USDA-APHIS regulations relating to importation of goods with wood packing materials (WPM). These regulations provide that all wood packing material be treated and marked accordingly. Violations of the regulations require that the goods be immediately exported.
CBP’s recently updated Frequently Asked Questions is available at:
http://www.cbp.gov/xp/cgov/import/commercial_enforcement/wpm/wpm_faq.xml.
USDA updates, announcements and media advisories are available at:
http://www.aphis.usda.gov .
"Guidelines for Regulating Wood Packaging Material in International Trade” and additional information regarding the ISPM15 is available at:
http://www.shapiro.com/WoodPackingMaterial.doc
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Commercial Invoice Requirements 101
Under the Customs Modernization or “Mod” Act, U.S. Customs and Border Protection has the obligation to provide the public with information concerning the trade community’s rights and responsibilities under Customs Regulations and related laws, and the importer of record is responsible for using reasonable care to enter, classify and determine the value of imported merchandise and to provide any other information necessary to enable Customs to assess proper duties, collect accurate statistics and determine whether other applicable legal requirements, if any, have been met. Unless specifically exempted, all merchandise imported into the United States is required to be entered. Exemptions can be found in General Note 3(e) of the Harmonized Tariff Schedules of the United States:
http://hotdocs.usitc.gov/docs/tata/hts/bychapter/0510/0510gn.pdf
When there is intent to introduce merchandise into the United States commerce, a consumption entry is filed to facilitate the release from Customs custody. Generally, formal entries are required for all shipments valued over $2,000.00. To facilitate the release of goods, in all cases, Customs will require the importer to provide a complete and accurate description of the merchandise, correct information with regard to classification and duty determination, accurate value and correct country of origin information, and accurate information for trade statistics.
As the importer of record is fully responsible for the content of the commercial invoice, we would like to take this opportunity to provide guidance to our Samuel Shapiro & Company, Inc. community, and offer a checklist of required invoice elements that will aid in determining the proper classification, valuation and admissibility of goods. Every import transaction is different, therefore this is provided for information purposes only and without warranty.
The commercial invoice should be signed by the seller or shipper, or his agent, and must be prepared in accordance with 19 CFR Section 141.86 of the Customs Regulations. The following information must be shown on the commercial invoice:
http://a257.g.akamaitech.net/7/257/2422/01apr20051500/edocket.access.gpo.gov/cfr_2005/aprqtr/19cfr141.86.htm
• The date of the invoice
• The destination port of entry for the merchandise
• Names of buyer and seller, and if a consignment, the names of the shipper and receiver
• Name and complete address of foreign individual / firm responsible for invoicing the
merchandise (i.e. - the manufacturer or seller). This will be critical information for
constructing the Manufacturer’s Identification (MID) code.
• Name of responsible individual: each invoice of imported merchandise shall identify by
name a responsible employee of the exporter, who has knowledge, or who can readily
obtain knowledge, of the transaction.
• A detailed description of the merchandise which should include the common name of the
merchandise, including the marks and numbers of the packages in which the
merchandise is packed
• Country of origin for each item
• The invoice must be in English or translated into English
• Quantities in weights and measures
• The currency of the transaction
• Value and purchase price for every item
• Terms of sale (e.g. - EXW, FOB, C&F, CIF, DDP, etc.)
• Charges such as freight, insurance, commission, packing costs, etc.
• All rebates, drawbacks, and bounties
• Any discounts, allowances, or credits
• Any interest payment
• Costs for assists. Generally speaking, assists are any materials, components, parts,
tools, dies, and molds, or any engineering, artwork, design work, plans, and sketches
undertaken outside of the United States, which the importer provides, free of charge
or at a reduced cost, for use in the production/sale of the imported merchandise.
The following is a list of frequent invoicing errors:
• The shipper assumes that a charge is “non-dutiable” and omits it from the invoice.
• The shipper uses U.S. parts in the manufacturing process and fails to state the value of
the U.S. parts on the invoice.
• The shipper does not invoice for goods shipped because they are “replacement goods”
for items damaged from a prior shipment.
• Merchandise shipped “free of charge” is not properly valued.
• Gifts or other items, which are included in the shipment, are not listed on the invoice.
Certain classes of merchandise, such as textiles, steel, or chemicals, require additional information on the commercial invoices. See Section 141.89 of the Customs Regulations for details:
http://a257.g.akamaitech.net/7/257/2422/01apr20051500/edocket.access.gpo.gov/cfr_2005/aprqtr/19cfr141.89.htm
The Department of Homeland Security’s Bureau of Customs and Border Protection (CBP) also publishes valuable resources. The agency has posted a number of updated informed compliance publications on a variety of technical subjects and processes. These guides are helpful sources of information on programs administered by CBP:
http://cbp.gov/xp/cgov/toolbox/legal/informed_compliance_pubs/informed_compliance_pubs.xml
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Additional Tariffs Levied on U.S. Exporters
As Japan and Mexico announce the imposition of Retaliatory Tariffs on U.S. Exports in Response to Byrd Amendment, The American Association of Exporters (AAEI) and Importers urges the repeal of the Byrd Amendment in its August 22nd Trade Alert.
The World Trade Organization (WTO) Appellate Body found that the U.S. "Byrd amendment," which directs the U.S. government to distribute the collected anti-dumping and anti-subsidy duties to the U.S. companies that brought the cases in the first place, is incompatible with WTO rules.
Last year, AAEI notes that the WTO authorized the European Union and other U.S. trading partners, including Brazil, Chile, Japan, Canada, India, South Korea and Mexico, to impose sanctions against the United States, equivalent to up to 72 percent of monies collected under the Byrd Amendment. Retaliation already authorized by the WTO will impact a range of industries across the United States. Exporters need to be aware of the already announced retaliatory tariffs and the possibility of other countries imposing additional tariffs on the commodities they deem appropriate.
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CBP Issues New NAFTA Certificate of Origin Instructions
The Bureau of Customs and Border Protection (CBP) has issued a Customs Directive updating instructions for the NAFTA Certificate of Origin Form 434.
The Customs Directive provides policy and responsibility guidelines for the NAFTA Certificate of Origin for importations into the United States on which NAFTA preferential tariff treatment is claimed.
Policy items include:
• Signature and date on the NAFTA Certificate
• Exporter Responsibilities
• Importer must have possession of the certificate at time of NAFTA claim
• No certificate required for importations with a total line value of $2,500.00 or less, with a certifying statement for
commercial shipments
• Single and Blanket certificates
Responsibility items include:
• CBP requests for copies of certificates
• If certificate is found to be illegible, not signed, dated, or completed properly in accordance with 19 CFR 181.22 (b), the
importer will be given a period of 5 working days to comply or CBP will deny the claim.
• Denial procedures for CBP.
• False statements and assessment of penalties as provided by law.
• The exporter’s responsibility to provide accurate and updated information on single certificates, as well as blanket
certificates.
• Importer’s responsibility to make a corrected declaration of origin when information is received that a certificate is not
valid. This must be done within 30 days of discovery.
CBP will accept three types of Certificates:
• The official CBP Form 434;
• Alternate CBP Form 434 (Alt 434); and
• Computer-Generated Alternated CBP Form 434. Procedures and formats deemed acceptable have been outlined for each
form. Computer-generated Alternate 434 forms must be pre-approved in writing by the Office of Field Operations in
Washington, DC before use.
The Certificate of Origin form is available on CBP’s website at:
https://forms.customs.gov/customsrf/getformharness.asp?formName=cf-434-form.xft
The Customs Directive can be viewed on the CBP website to ensure your company is complying with all of the new procedures. The new Customs Directive (CD) number 3810-014A dated July 26, 2005 supersedes CD 3810-014, dated 6/28/99. The Directive is available at:
http://www.cbp.gov/linkhandler/cgov/toolbox/legal/directives/3810-014a.ctt/3810_014a.doc
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ITC to Update Advice on Effects of Reduction / Elimination of Certain U.S. Tariffs
The U.S. Trade Representative (USTR) has asked the International Trade Commission (ITC) to investigate the plausible effects on the reduction of U.S. tariffs on certain items. This investigation would be an update to the advice that was provided in 2002 when the ITC investigated the effects of tariff reductions based on the 2002 Harmonized Tariff Schedule (HTS) and 2000 trade data. The request comes as U.S. imports have risen notably since 2000.
The ITC’s updated advice will included the economic effects of reducing U.S. tariffs by 75% from all trading partners for products that meet the following criteria:
• at least a 50% increase in the value of dutiable imports from 2000-2004;
• at least a $10 million increase in the value of dutiable imports from 2000-2004;
• dutiable imports valued at more than $500,000 in 2000;
• a 2004 ad valorem equivalent U.S. tariff on dutiable imports of at least 5%; and
• 2002 ITC advice for the item did not indicate a substantial adverse effect on U.S. industry as a result of U.S. tariff
elimination.
The USTR has requested that:
• the ITC base its advice on the 2005 HTS and 2004 trade data;
• the ITC include a concordance to the 1996 HTS that is being used in the World Trade Organization (WTO) negotiations;
• the report identify the five largest sources of dutiable imports, including values, for each item analyzed under the above criteria; and
• the ITC provide further analysis affecting trade and the competitive position of U.S. industry if, based on the more recent data, there is a greater adverse effect on U.S. industry than was indicated in the ITC’s 2002 report.
The ITC will forward its report to the USTR by December 13, 2005. Written statements concerning the investigation are due by 09/16/05. For additional information please contact:
ITC - George Serletis (202) 205-3315 (Industry-specific information)
ITC - William Gearhart (202) 205-3091 (Legal aspects)
Source: ITC notice (FR Pub 08/22/05) available at:
http://a257.g.akamaitech.net/7/257/2422/01jan20051800/edocket.access.gpo.gov/2005/pdf/05-16542.pdf.
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Product Petitions Accepted for 2005 Annual Review of GSP
The U.S. Trade Representative (USTR) has accepted the following product petitions for the annual review of the 2005 Generalized System of Preferences (GSP). Updates to the list of articles eligible for duty-free treatment resulting from the annual review will be announced at the end of June 2006; most changes are expected to take effect on July 1, 2006.
Petition acceptance for further review does not indicate that the products themselves have been deemed GSP eligible, only that further review to determine GSP eligibility has been accepted. Reviews will be completed by the interagency GSP Subcommittee of the Trade Policy Staff Committee (TPSC).
Petitions for Additional Product Eligibility:
1302.39.0010 Carrageenan
9102.11.10 Wrist watches not elsewhere specified or included, electrically operated, mechanical display only, 0-1 jewel, gold- or silver-plated case, band of textile material or base metal
9102.11.25 Wrist watches not elsewhere specified or included, electrically operated, mechanical display only, 0-1 jewel, case other than gold- or silver-plated, with band of textile material or base metal
9102.11.30 Wrist watches not elsewhere specified or included, electrically operated, mechanical display only, 0-1 jewel, gold- or silver-plated case, with band of material not elsewhere specified or included
9102.11.45 Wrist watches not elsewhere specified or included, electrically operated, mechanical display only, 0-1 jewel, case other than gold- or silver-plated, with band of material not elsewhere specified or included
9102.19.20 Wrist watches not elsewhere specified or included, electrically operated, with both optoelectronic and mechanical displays, 0-1 jewel, band of textile material or base metal
9102.19.40 Wrist watches not elsewhere specified or included, electrically operated, with both
optoelectronic and mechanical displays, 0-1 jewel, band of material not elsewhere specified or included
9102.91.40 Watches (excluding wrist watches) not elsewhere specified or included, electrically operated, with 0-1 jewel in the movement
Petition to Restore Status:
India 2916.39.15 Ibuprofen
Petitions for Waiver of Competitive Need Limits:
Philippines 0804.50.80 Guavas, mangoes, and mangosteens, dried
Brazil 4412.19.40 Plywood of wood sheets, not over 6mm thick each, with outer plies of coniferous wood, with a face play not elsewhere specified or included, not surface covered or with clear material does not obscure grain
Turkey 6802.21.10 Monumental or building stone and articles thereof, of travertine, simply cut or sawn, with flat or even surface
Turkey 6802.91.20 Monumental or building stone and articles thereof, of travertine, dressed or polished but not further worked, not elsewhere specified or included
At the direction of the USTR, the International Trade Commission (ITC) is investigating the product petitions. It will advise the USTR on the results of the investigation: specifically, the economic effect on U.S. industries that produce similar products, and the effect on consumers with the elimination of U.S. import duties on those products.
A public hearing will be held on September 30, 2005, with pre-hearing briefs and requests to appear before the committee due on September 12, 2005. For further information please contact:
USTR contact – GSP Subcommittee of the TPSC (202) 395-6971
ITC contact – Cynthia B. Foreso (202) 205-3348
Source: USTR notice (FR Pub 08/18/05) available at:
http://a257.g.akamaitech.net/7/257/2422/01jan20051800/edocket.access.gpo.gov/2005/pdf/05-16405.pdf.
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New and Revised Informed Compliance Publications
As part of its responsibilities under “informed compliance,” Customs and Border Protection is required to provide importers with guidance concerning the legal obligations and procedural requirements pertaining to entry of merchandise. In order to provide information to the public, Customs has issued a series of informed compliance publications (ICP) on a variety of classification, valuation, and general entry information. A complete list of these publications may be found on the Customs website at:
http://cbp.gov/xp/cgov/toolbox/legal/informed_compliance_pubs/informed_compliance_pubs.xml
Customs has recently issued a new informed compliance publication on the classification of household articles of base metal. This ICP includes what is considered table, kitchen, cooking, other household, sanitary wares and non-electric heating appliances; decorative versus utilitarian articles; what is a base metal (for example, iron, steel, copper, aluminum, etc.); classification of alloys; classification of composite articles (for example, glass and metal articles); and sets. The household articles of base metal ICP may be downloaded from:
http://cbp.gov/linkhandler/cgov/toolbox/legal/informed_compliance_pubs/general/icp079.ctt/icp079.pdf
When necessary, Customs will revise an ICP to include updated information. The ICP for footwear was originally published in January 1998 and was revised in July of this year. This ICP was prepared by the National Commodity Specialist Division as a guide for importers in the classification of footwear. The document includes details of footwear materials and components, such as uppers, tongues, foxing, as well as what is considered athletic footwear, sports footwear, slip on, open toe, and open heel shoes. The ICP also goes through each section of the Harmonized Tariff Chapter 64 for footwear and provides detailed explanations of each heading in that chapter. The footwear ICP may be downloaded from:
http://cbp.gov/linkhandler/cgov/toolbox/legal/informed_compliance_pubs/textiles/icp022.ctt/icp022.pdf
Customs cautions that importers should not rely solely in the information provided in informed compliance publications and, due to the complex nature of Customs issues, to seek the advice of an expert, such as a customs broker, who specializes in Customs matters.
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Multi-Million Dollar Penalties for Improper Valuation
In two recent Court of International Trade (CIT) decisions, Ford Motor Company was assessed penalties totaling over $20 million due to improper valuation. In the first case, Ford was fined $3 million and cited for gross negligence for not declaring correct value information to Customs at the time of entry. The Court held Ford did not notify Customs that the entered value was provisional and not the complete and final value, even though Customs had issued multiple requests for information. Ford’s internal departments did not communicate with each other regarding engineering changes affecting pricing which the Court stated showed Ford’s “reckless disregard for its Customs obligations.” The Court concluded Ford “exhibited a lack of care and indifference.” Ford was also ordered to pay the unpaid duties totaling $184,495.00.
In the second case, the CIT found that Ford failed to declare assists (items provided free of charge or at a reduced cost by the buyer to the seller for use in the production or sale of merchandise exported to the U.S.) and indirect payments (in this case, lump sum payments to Ford’s vendors after entry). The company was found negligent in its post entry processes for failing to declare to Customs the lump sum payments as soon as they were known. The CIT assessed the statutory maximum penalty for negligence - $17,151,923.60 plus interest.
What Can We Learn From This?
Importers must have established reliable procedures to know the price actually paid or payable for their merchandise. This includes rebates, indirect costs, additional payments, assists, commissions or royalties. If purchasing from a related seller, is the pricing influenced by the relationship?
Documented internal controls are a must. Because Ford had documented procedures, the Court considered this a mitigating factor in the second case in citing negligence as opposed to gross negligence (which would have doubled Ford’s penalty).
Internal communications between departments are critical. Is there a specific individual or department in your company responsible for compliance? Does this individual or department liaise with, for example, engineering, purchasing, receiving, or accounting?
If your pricing is not final at the time of importation, have you considered Reconciliation? Reconciliation allows the importer, using reasonable care, to file entry summaries with Customs with the best available information, with the mutual understanding that certain elements, such as the declared value, remain outstanding. At a later date, when the specifics have been determined, the importer files a Reconciliation entry which provides the final and correct information. To find out more about Reconciliation, please contact us at compliance@shapiro.com.
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DR-CAFTA
On August 2, 2005, President Bush signed into law the Dominican Republic-Central America-United States Free Trade Agreement, also known as DR-CAFTA or CAFTA. This legislation was passed by a slim margin (217-215) in the House of Representatives on July 28, 2005.
DR-CAFTA provides for additional duty relief for products from Dominican Republic, Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua. About 80% of goods from these countries already enter the United States duty free under the Caribbean Basin Economic Recovery Act (CBERA) and the U.S. Caribbean Basin Trade Partnership Act (CBTPA). DR-CAFTA will allow U.S. goods to receive similar treatment in those countries. DR-CAFTA also allows the President to modify or continue duties, or to impose additional duties if deemed necessary. Once in effect, DR-CAFTA countries will no longer be considered GSP and CBERA countries. Remaining tariffs with DR-CAFTA countries will be phased out over ten years.
DR-CAFTA provides for textile and apparel safeguarding measures, and strengthens protections for intellectual property, labor and environmental laws. DR-CAFTA products and services will also be eligible for U.S. government procurement. Safeguard duties on certain agricultural products can also be assessed.
DR-CAFTA is expected to expand U.S. farm exports by $1.5 billion a year. Tariffs on most U.S. farm exports will be phased out over fifteen years, with all tariffs eliminated in twenty years.
The DR-CAFTA region is the second largest market for U.S. textile fabrics and yarns. Wearing apparel made in the region will be duty free under DR-CAFTA by using U.S. or regional fabric and yarn. The agreement’s benefits for textiles and apparel will be retroactive to January 1, 2004. DR-CAFTA will provide a critical geographical advantage in competing with China and the rest of Asia.
Before DR-CAFTA takes effect, each country’s legislature must ratify the agreement. The United States must also determine that each country has brought its laws into compliance with the agreement’s provisions. The Journal of Commerce has reported that DR-CAFTA is expected to go into effect by January 2006, for all countries with the exception of Costa Rica.
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Mandatory AES Electronic Export Information Filing
Jerry Greenwell, Chief, Regulations, Outreach, & Education Branch of the Foreign Trade Division announced that the Full Mandatory Electronic Filing Final Rule should be out this fall, with full implementation in early 2006. Mr. Greenwell made his announcement at the Samuel Shapiro & Company Export Essentials Seminar on August 11th in Baltimore, Maryland. He stressed to all in attendance the importance of filing the Electronic Export Information (EEI) through the Automated Export System (AES) within the prescribed time frames.
Full implementation of this rule requires the paper SED form 7525-V to be eliminated and penalties to be assessed for non-filing of the EEI through AES within the filing time frames. Penalties will increase to $1.000.00 per day per violation. Samuel Shapiro & Company implemented full electronic filing of all export information several years ago. Samuel Shapiro & Company designed and maintains a system to file all export information through AES with checks and balances to ensure compliance. We provide this service to all of our export clients.
For more information on electronic filing through AES, please contact compliance@shapiro.com.
The entire proposed rule for full mandatory electronic filling is available on the Census website from the Federal Register dated February 17, 2005 at:
http://www.census.gov/foreign-trade/regulations/fedregnotices/fedreg-02172005.pdf
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New Export DSP-5 Form Likely to be Mandatory on August 29, 2005
The launch of the new D-Trade DSP-5 (v2.01) has been postponed until August 29, 2005, due to continued testing that has uncovered issues which must be resolved prior to the mandatory use of the form. As it stands now, and unless further delays result, the D-Trade System will be taken offline at 9:00 PM eastern on Friday, August 26th and will be returned online on Monday, August 29th by 12 noon eastern. The old format will not be accepted once the change takes place. For updated information, please refer to the D-Trade information center at: http://www.pmdtc.org/sl_dtrade.htm.
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New Sealing Procedures for Inspected Containerized Cargo
On August 9, 2005, Customs & Border Protection implemented a new procedure for the sealing of containerized cargo inspected by CBP officers. CBP officers will attach a new high security bolt seal (ISO/PAS 17712 compliant) immediately after performing the physical container inspection. This new procedure does not apply to containers undergoing a non-intrusive inspection. The appropriate parties will be notified after the inspection is performed, and will be provided with the unique serial number of the installed seal before the container is released. This seal must not be detached or replaced.
C-TPAT security criteria require that container seals must meet or exceed the current International Organization for Standardization Publicly Available Specification 17712.
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CSI Now Screens More than Two-Thirds of All U.S. Bound Cargo
On August 3, 2005, U.S. Customs and Border Protection (CBP) Commissioner Robert C. Bonner announced that approximately 70 percent of all maritime containers shipped to the United States are being screened through CBP’s Container Security Initiative (CSI). Developed in response to 9/11, CSI has rapidly expanded to 38 ports throughout Europe, Asia, Africa, the Middle East, and North America, including the 20 ports shipping the greatest volume of containers to the United States.
CSI is the only multinational program in place today protecting global trading lanes. The CSI program enables CBP officers to partner with foreign governments to identify and inspect high-risk cargo containers at overseas ports, before they are loaded onto U.S. bound vessels. CBP’s goal is to have 50 operational ports by the end of 2006; once this goal is met, approximately 90 percent of all transatlantic and transpacific cargo imported into the United States will be subjected to pre-screening.
Recently, the World Customs Organization (WCO) unanimously adopted a Framework of Standards to Secure Global Trade. The WCO Framework is based upon CSI principles and establishes a common set of standards to be implemented by 168 member states to secure international maritime cargo. Other international organizations have adopted resolutions to implement CSI security measures, including the European Union (EU), European Community (EC) and the G8.
By identifying high-risk containers through an Automated Targeting System, requiring manifests 24 hours before departure, and applying advanced radiation detection and large-scale imaging technology to perform security inspections of high-risk containers abroad, CBP is taking unprecedented steps to secure international maritime trade destined for the United States.
Source: “CBP Reaches International Maritime Security Milestone: Container Security Initiative Now Screens More than Two-Thirds of All U.S. Bound Cargo” appearing at CBP’s website at http://www.cbp.gov/xp/cgov/newsroom/press_releases/08032005.xml on August 3, 2005.
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Transportation Update – September 2005
Far East
Carriers from the Far East to the USA have reported that their vessels are still running nearly 100% full on all water service to the USA east coast. There is a very high demand and the available capacity is very limited.
Carriers servicing the USA west coast are reporting that their vessels are filling up but they are not at capacity. So far, shipments via Long Beach/Los Angeles are operating smoothly with few rail delays. We are now in the teeth of the peak season and hopefully the west coast ports will continue to operate without too many problems.
Shipments to Seattle and Tacoma are way up over last year’s level as carriers have added more direct service to northwest ports. The recent truck strike in Vancouver caused a surge of container traffic in Seattle and Tacoma. Truckers in those ports have been very busy hauling containers up to Vancouver.
Transpacific ocean carriers from Asia have imposed a new emergency rail fuel surcharge of $137.00 per container for all shipments that are via MLB service or that call on east coast ports and move inland via rail. For shipments destined to California, Oregon, Washington, and east coast ports where the ocean carrier is doing a local delivery, the charge is $40.00 per container. The effective date for most carriers was August 15, 2005. This charge will be evaluated every quarter. The next scheduled review date is October 1, 2005.
It is critical that importers give a volume forecast in order to protect space. Space on all water vessels will continue to be tight. Space to the east coast via the west coast is not as much of a problem due to capacity increases to the west coast; however, a forecast would be helpful.
Northern Europe
Bunker fuel surcharges that were increased on May 16, 2005 to and from Northern Europe to United States will remain in place through October 16, 2005.
The bunker surcharges are as follows:
• 20’ container $304.00 to the East Coast and $456.00 to the West Coast
• 40’, 40’ HC and 45’ container $608.00 to the East Coast and $ 912.00 to the West Coast.
There is still a significant shortage of open top containers throughout Europe at this time. Carriers are raising their special equipment surcharges due to this shortage. Some are as high as $1,200.00 per open top.
Space is still tight from Northern Europe as there has been a surge in traffic from Eastern European countries and Russia.
The Mediterranean
Bunker surcharges from the Mediterranean region of Italy, Spain, Portugal, Turkey and Greece will go up on September 1, 2005.
Current level September 1, 2005 level
20’ container $ 260.00 $ 323.00
40’ container $ 520.00 $ 646.00
40 HC cont. $ 520.00 $ 646.00
Space is still very tight from Italy, Spain, Portugal and Turkey; however, a new service by China Shipping will add capacity to the trade and that should help alleviate some of the congestion.
Air News
Fuel surcharges are climbing even higher. The high rates have added considerable expense.
Fuel surcharges from Hong Kong will rise to 52 cents per kilo. From Europe, most carriers will raise their fuel surcharge to EUR .50/kg. From the USA, it will rise to USD .50/kg.
Air rates from Asia have started creeping up as the peak season begins to hit. There should be strong increases in volume during September, October and November from all over Asia to the USA.
Export Ocean News
Space is still tight to both Northern Europe and Asia. Carriers are being more selective on the type of cargo they carry. The recent strengthening of the U.S. Dollar has not slowed down exports at this time.
Domestic USA
There are still reports that at the moment there are not significant delays in the southern California ports. There have been delays on the rail for shipments moving via Chicago to the east coast. There does seem to be a bottleneck in Chicago. It’s taking sometimes 5 days for containers to get by Chicago on their journey to the east coast.
Domestic fuel surcharges are climbing on a weekly basis. Some carriers are charging as much as 23%.
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PierPASS Program Update
At the launch of the PierPASS program on July 23rd, PierPASS experienced and addressed a number of technical issues. Perhaps the most significant issue was the problem on July 29th when the customer service center had a telecommunications line problem causing callers to experience longer than normal hold times. The line has now been replaced and calls are being answered within 45 seconds on average. Additionally, the customer service center has extended their hours of operation. They are now open Monday through Friday between 8:00 am and 3:00 am and on Saturdays between 8:00 am and 5:00 pm Pacific Time.
Overall though, the program has been running smoothly and PierPASS reports that during the first two weeks of operation, they handled nearly 30% of the daily cargo traffic during off peak hours. This surpasses the original goal of 15% - 20%. There have been no significant labor shortages and thousands of truckers have turned cargo out during the off peak shift. During the first two weeks, over 88,000 truck trips were logged. Marine terminals are reporting that during off peak hours an average truck turn time is 35-40 minutes once inside the gate, however there have been some reports of delays at specific terminals. PierPASS recommends that trucks avoid arriving right at the start of the off peak hours to circumvent congestion associated with the off peak shift switch.
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SAMUEL SHAPIRO & COMPANY, INC. NEWS
Headquarters Relocation Postponed Until October 7, 2005
On October 7, 2005, the Baltimore office of Samuel Shapiro & Company, Inc. will be moving to:
100 North Charles Street, 12th Floor
Baltimore, MD 21201-3895
Tel: 410-539-0540
Tel: 800-695-9465
Fax: 410-547-6935 – Import
Fax: 410-332-1274 – Export
Our phone and fax numbers will remain the same as will our extensions.
We will be closing the Baltimore office at noon on the 7th. Samuel Shapiro & Company, Inc. will be open and ready for business Monday, October 10th at our new location.
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Export Essentials Seminar – A Huge Success!
On August 11, 2005, Samuel Shapiro & Company, Inc. hosted its Export Essentials Seminar at the World Trade Center in Baltimore, Maryland. The morning seminar preceded an afternoon of networking and fun at the Baltimore Propeller Club’s annual outdoor Crab Feast. Over 4000 people attended the crab feast, including more than 40 customers and staff from all of Samuel Shapiro & Company’s East Coast operations.
The Export Essentials Seminar covered topics such as exporter responsibilities, export regulations, export enforcement, and exporter advocacy services. Our guest speakers were Jeff Brutsche from Customs and Border Protection, Gerry Horner and Jerry Greenwell from the Census Bureau, John Wanat from the Bureau of Industry and Security, and Alexander Amdur from the Export Assistance Center.
Jane Taeger, Samuel Shapiro & Company’s Compliance Manager and director of the event, was extremely pleased with the outcome. “It is very gratifying to see so many companies take a proactive interest in export compliance,” explained Taeger. “Training, which includes attending seminars such as ours, is the number one component of an effective compliance program.”
The Export Assistance Center, which is staffed by the U.S. Department of Commerce, assists firms in exporting by providing expert counseling and advice, information on markets abroad, international contacts and advocacy services. Alexander Amdur, Commercial Officer of the Baltimore Export Assistance Center, noted, “Samuel Shapiro & Company's Export Essentials seminar provided a valuable overview of export requirements. The presentation was very effective for all companies in attendance.”
Samuel Shapiro & Company, Inc. hosts public seminars, available throughout the year, for the importing and exporting communities, in addition to presenting private seminars. It is our way of creating an engaging environment for all interested parties, allowing for an exchange of ideas and information, all with the ultimate goal of strengthening our customers’ compliance programs. For more information, contact us at consulting@shapiro.com.
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