Featured Headlines:
Airfreight’s De Maximus Meltdown
Ocean Carriers’ Scrambled Legs
Straight-up Freight on the Rocks
Will the IEEPA Appeal Fall Far from the Judicial Ruling Tree?
Stuck on Sanctions? OFAC Has a Hotline—And So Do We
Euro Jam: Northern Ports Stuck in the Slow Lane
Let’s Play Domestic Portend: The Cranky Cargo Chronicle Edition
Airfreight’s De Maximus Meltdown
- Even without Ozempic, US-bound airfreight waistline from China dropped by nearly a third after the U.S. suspended “de minimis” duty-free treatment for low-value shipments early last month.
- Translation? E-commerce giants like Shein and Temu are feeling some serious turbulence—and so are the airlines that used to carry that fast, fresh, fab, fantabulous fashion directly to your doorstep.
- The removal of the exemption hit hard. Between May 2 and May 13, freight capacity between China/Hong Kong and the U.S. fell 30%, and South Korea’s lanes dropped 22%. Even the mighty air cargo kingpin, Atlas Air, reported a 28% decline.
- Cathay Pacific and China Southern saw their U.S. cargo demand fall abruptly too—although Cathay had already warned that demand would sag in May thanks to the tense and tangled tariff tussle.
- Meanwhile, last week’s tariff truce between Washington and Beijing offered some short-term optimism by lowering reciprocal tariffs…but the de minimis suspension remains. That keeps airfreight demand under pressure, especially for small parcel shipments.
- For context: low-value e-commerce accounted for 55% of China-to-U.S. airfreight last year—up from just 5% in 2018. This isn’t a small side hustle—it’s been a lifeline for Asian carriers like Cathay and Korean Air, which generate up to a quarter of their revenue from their cargo passengers who never ever ask for a pillow or a blankie.
- With the math not quite adding up anymore, retailers are rerouting. Shein is reportedly leasing a massive warehouse in Vietnam, signaling a pivot to ocean freight and regional warehousing. This means less speed, but more tariff control.
- Freight forwarders say the shakeup has already begun. More than 70 freighters went dark on the transpacific route after May 2, and some are now flying to Mexico or Latin America with a tear in their eye and their guitars on their back. So sad.
- Southeast Asia could benefit as shippers look to dodge China-origin tariffs, but the trade winds are still tricky, as many Southeast Asian countries face their own tasty tariffs and production infrastructure limitations.
- Singapore Airlines says it’s watching for new opportunities in shifting trade flows but warns that post-tariff uncertainty may be just as chaotic as a pandemic—just without the masks.
Ocean Carriers’ Scrambled Legs
- Ocean Network Express (ONE) is mulling a $2.5B order for twelve liquefied natural gas (LNG) dual-fuel 16,000 TEU ships from South Korea’s Hyundai Heavy Industries.
- Why not China? Because starting this October, calling at a U.S. port in a Chinese-built box ship gets expensive—fast.
- Here’s the new U.S. fee structure for Chinese-built ships:
- October 2025: $18/NT or $120/container
- April 2028: $33/NT or $250/container
- Plus: An operator fee—$50/NT starting October, rising to $140 by 2028, regardless of vessel origin if owned by a Chinese operator.
- ONE is reportedly absorbing an 11% price premium to dodge these U.S. surcharges—a clear sign that regulatory cost avoidance is now influencing fleet procurement.
- Not all carriers are steering clear. Cosco is doubling-down with two purchase orders for Seaspan (a Canadian shipbuilder active in China):
- Six 8,300 TEU ships from Hudong-Zhonghua Shipbuilding;
- Six 11,400 TEU ships from Shanghai Waigaoqiao Shipbuilding; and
- Seaspan may have ’preferential access’ to Chinese yards for these standard-class builds.
- Turkish carrier Arkas Line and China’s JOSCO are also still ordering from Chinese shipyards, undeterred—likely because their routes don’t touch U.S. ports, and these dudes are just rebellious bad a$$es!
- Arkas: Four 3,100 TEU ships at $50M each for 2028
- JOSCO: Four 3,000 TEU ships at $45M each for 2027
- Bottom line? If you’re calling the U.S., China-built comes with a premium—but for rest of the (rational) world, it’s business as usual.
Straight-up Freight on the Rocks
- This week delivered a one-two punch to maritime safety, as two containerships found themselves in dire straits—one literally on the rocks and another now at the bottom of the sea. We keep telling these container ships that buzzed sailing is drunk sailing!
- Off the coast of India, the MSC ELSA 3, a Liberian-flagged container vessel, sank with over 640 containers onboard, including 13 with hazardous materials and 12 with calcium carbide, a chemical that emits flammable gas upon contact with water, morphs into deadly robots, and eats puppies. Hey, we need our artificial fruit- ripening and we need it now! Yes, calcium carbide is sometimes used for THAT.
- Several containers have already washed ashore, raising alarm bells over environmental fallout and contamination. The Kerala government has declared an emergency, halted fishing in a 20-nautical-mile radius, and deployed pollution response teams to contain the spread. Kerala is a state in India known for her beautiful nature and majestic elephants.
- Meanwhile, in Norway, the NCL Salten had a close brush with catastrophe when it ran aground just meters from a residential home near Trondheim. The cause? The ship’s second officer reportedly fell asleep on duty.
- Fortunately, no cargo spilled, and no injuries occurred, and the vessel was refloated five days later without environmental damage. Unlike the drowsy second officer, the homeowner may never sleep again!
- While one ship is being salvaged and the other is now salvage itself, the message is clear: shipping risk isn’t just theoretical. From human error to chemical threats, the industry is reminded—yet again—that vigilance, training, and emergency preparedness are not optional.
Will the IEEPA Appeal Fall Far from the Judicial Ruling Tree?
- On May 28, the U.S. Court of International Trade (CIT) ruled that certain tariffs imposed under the International Emergency Economic Powers Act (IEEPA)—notably the reciprocal and fentanyl-related tariffs—are unlawful. But while the ruling could be a major legal win for some, implementation remains uncertain.
- Here’s where each key player currently stands:
- The Court of International Trade (CIT)
- Ruled that the IEEPA did not authorize the tariffs in question and ordered that the related executive orders be vacated and blocked permanently.
- Issued a 10-day compliance window, giving the U.S. government until June 7 to comply with the ruling unless delayed by appeal.
- The Executive Branch (Trump Administration)
- Immediately filed an appeal to the Court of Appeals in the Federal Circuit (CAFC).
- Requested a stay of the CIT’s order to preserve the status quo while higher courts review the decision.
- Is expected to argue for a longer-term delay to allow for additional review or potentially escalate to the Supreme Court.
- Court of Appeals in the Federal Circuit (CAFC)
- Has not yet issued a long-term decision but is currently reviewing the government’s request for a stay.
- A short-term stay is possible while the court evaluates whether the executive orders can remain in effect during appeal proceedings.
- District Court
- Ruled separately that the CIT lacks jurisdiction to rule on the IEEPA tariffs.
- Granted a preliminary injunction to block enforcement of the CIT ruling, but only for two plaintiffs—not for all importers.
- Delayed full enforcement of its own order for 14 days, allowing the government time to appeal.
- The Court of International Trade (CIT)
- Here’s what importers need to know now about the legal situation that’s unfolding:
- Tariff Collection Continues. U.S. Customs and Border Protection (CBP) will continue collecting IEEPA tariffs until further notice. No official suspension has been announced.
- Refunds Are on Hold (for Now). If the CIT’s ruling holds, importers may be eligible for refunds on affected duties—possibly retroactive to February 4th or April 5th, depending on the tariff. However, no refund mechanism is currently available, and refunds (if issued) are not expected until after entries liquidate—and likely not before late 2026 or beyond.
- PSC Filing Not Yet Available. CBP systems are not yet accepting Post Summary Corrections for impacted entries. Until an official reversal is processed, entries must remain as filed, even if importers expect a future refund.
- Protest Filing May Be Necessary. For entries that liquidate before the issue is resolved, importers will need to file protests within the standard 180-day window from the liquidation date to preserve refund rights. We strongly recommend tracking all IEEPA-related entries, including expected liquidation dates and potential protest deadlines.
- Jurisdictional Uncertainty Adds Delay. With both the CIT and District Court offering competing views on who has authority over this issue, importers must follow both legal tracks. Until jurisdiction is resolved, final enforcement remains unclear—and timing remains unpredictable.
- We are here to support importers with liquidation dates and refund claims, if available, after the appeal is settled. As the situation unfolds, Shapiro will continue to:
- Monitor court rulings and CBP updates.
- Alert clients of system changes (PSC access, protest needs, refund claims).
- Track liquidation and protest timelines for your entries.
- Help document and prepare potential refund claims when appropriate.
- If you have any questions, please contact [email protected].
- Learn more about these actions in our Tariff News section: Trump’s Trade Tariff Updates
Stuck on Sanctions? OFAC Has a Hotline—And So Do We
- The Office of Foreign Assets Control (OFAC) just released the fourth installment in its OFAC Basics video series, this time spotlighting the Compliance Hotline.
- The video provides an overview of how to contact the OFAC Compliance Hotline; and also highlights other government resources currently available to importers.
- While OFAC provides clarity, it does not offer operational guidance.
- For businesses navigating U.S. sanctions, the video is a solid intro—but getting answers is only step one.
- That’s where we come in. Shapiro’s trade experts help you interpret, implement, and stay compliant—so you’re not just informed, but protected.
- Let’s make sure you’re on the right side of the regs…contact us today!
- Want to watch the entire series? Click here.
Euro Jam: Northern Ports Stuck in the Slow Lane
- Northern Europe’s top container terminals—Antwerp, Rotterdam, Hamburg, and Bremerhaven—are bogged down with mounting backlogs, with delays potentially dragging into July.
- Current vessel wait-times stretch from a few days to over two weeks, thanks to a potent combo of industrial strikes, low Rhine River water levels and maxed-out terminal yard space. (Hello, bulging barge bottlenecks…and to another BBB acronym!)
- In Antwerp, a nationwide strike on May 20 caused a serious logjam (not to be confused with a lumberjack, long jack or jackhammer). The port authority noted that a shortage of sea and river pilots is compounding delays, as some vessels still don’t even have a scheduled berth time.
- Terminals are limiting the return of empty containers to free up space, while carriers are rerouting vessels and slapping on congestion surcharges. “Hey, if we can’t run our business efficiently, shippers, YOU pay the bill!” This reminds us of grocery stores making us ring up and bag our own groceries… huh?!
- And making matters worse? An early transpacific peak season is in full swing. Shippers are rushing cargo ahead of a potential reinstatement of US–China tariffs in July, clogging global flows even further.
- Europe’s woes aren’t isolated. Shanghai, Shenzhen, Los Angeles, and the Port of New York are also feeling the heat, with vessel queues growing as global trade surges.
- Emergency measures—like berth prioritization and tighter export delivery windows—are being deployed in Europe to reduce pressure, but they’re also stretching transit times.
Let’s Play Domestic Portend: The Cranky Cargo Chronicle Edition
- Tariff Delay? Railroads Say: All Aboard (Carefully). With the U.S. suspending higher tariffs on Chinese imports for 90 days, BNSF and Union Pacific are bracing for a mid-summer import rush. Both railroads are pulling out the playbook from peak pandemic days—beefing up staffing, repositioning equipment, and experimenting with longer, combined, and even “custom” train configurations to help avoid the chaos. The goal? No déjà vu of the supply chain trainwrecks of 2021.
- CPKC Terminals: Wylie, We Have a Problem. Canadian Pacific Kansas City (CPKC) is facing operational hiccups at multiple intermodal terminals, with the most grumbling coming from Wylie, Texas. Shippers are reporting delays and rising container dwell times, and similar complaints are echoing in from Calgary and Vaughan, Ontario. Customers are frustrated, and while the railroad hasn’t publicly detailed a fix, the hope is that it’s more than just “ride it out.”
- LTL Pricing: Sky High and Going Nowhere. The US LTL producer price index (PPI) is sitting at a lofty 259—the highest on record and equal to the peak of June 2022. Prices have stayed flat since February, but don’t let the plateau fool you: costs are still nearly 5% higher than last year, and 12% above July 2023, when Yellow’s bankruptcy kicked off a wave of pricing turbulence. This PPI includes everything—base, accessorial, and fuel rates—so shippers are still feeling the burn.
- Speak Now or Park Later: DOT Cracks Down on English Proficiency. Starting June 25, truck drivers who cannot speak English during inspections or weigh station checks will be placed out of service. That means no delivery, no driving time, and likely some tough phone calls. The Department of Transportation says it’s enforcing long-standing law around English-language proficiency, but the move could lead to capacity tightening, shipment delays, and confusion for multilingual fleets scrambling to comply.
- GPS Gets a Chassis Glow-Up with DCLI + BlackBerry. Direct ChassisLink Inc. (DCLI) is going full high-tech, outfitting 100,000 domestic 53-foot chassis with BlackBerry Radar tracking devices. This is an expansion of their existing partnership and gives shippers the sweet trifecta: real-time location tracking, usage metrics, and alerts for high-impact events (a.k.a. when your chassis hits a pothole that could end a marriage). It’s a visibility upgrade that could also reduce equipment downtime and keep freight flowing more smoothly.
