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Listen All Y'all, It's Cabotage!
The Forced Labor Cliff Notes Edition
3, 2, 1…Ready or Not, It's (Almost) Time for CPSC Fun!
Listen All Y'all, It's Cabotage!
- Before anyone emails HR: yes, we’re really doing this! The Beastie Boys’ “Sabotage” turns 32 this year, and somehow the trucking industry has gifted us the perfect excuse to dust off that 45. How many of our loyal readers owned a 45? How many know what the heck it is?!
- With the U.S. revoking thousands of visas tied to foreign commercial drivers and intensifying enforcement against cabotage violations, the phrase practically writes itself.
- So, while MCA, Mike D, and Ad-Rock were busy creating one of the greatest music videos ever filmed (inspired by 1970s police dramas), freight markets have apparently been remixing the chorus into: “Listen all y’all, it’s cabotage.”
- Here’s what happened:
- I can’t stand it! About 20,000 Mexican truck-driver visas were revoked between April 2025 and April 2026. This is 2/3 of an estimated 30,000 total revocations.
- You know they planned it. The actions stem from a broader enforcement push launched after a 2025 executive order targeting foreign-driver compliance.
- A thorn in somebody’s side. Mexican trucking groups say the lost drivers are tightening capacity and only pushing freight rates higher.
- Your crystal ball ain’t so crystal clear. Nobody seems certain yet how large the long-term freight impact will be if demand picks up.
- It’s not a mirage. DOT says Mexican carriers can deliver into the U.S. and return home, but hauling domestic U.S. freight is where cabotage sabotage begins.
- Push of your button. Transportation Secretary Sean Duffy says DOT and CBP are working together to identify violators and revoke visas.
- Switch up my channel. FMCSA has once again made English-proficiency violations an out-of-service offense.
- Keep it on and on. CANACAR has responded with expanded English-language training programs for drivers and their families.
- What you see you might not get. Roughly 3,200 visa revocations since January have reportedly been tied specifically to alleged cabotage violations.
- Listen all y’all. Canadian carriers say they haven’t seen a similar wave of visa revocations or detentions.
- Our backs are not exactly against the wall. Driver-shortage statistics deserve context. The “under-25” driver population only covers a four-year age band because CDL drivers generally can’t operate interstate until age 21.
- Oh my God, it’s no mirage. And the freight keeps rolling. Mexico remained America’s largest trading partner in April, generating more than $86 billion in two-way trade.
- Beastie bonus tracks:
- “Sabotage” was released on Ill Communication in 1994.
- The legendary video was directed by Spike Jonze before his film career took off.
- Ad-Rock once described the song as intentionally chaotic, which may also describe all conversations about cabotage enforcement.
- No evidence exists that the Beastie Boys ever wrote a trucking song, though freight markets are trying very hard to change that!
The Ayatollah's EBAF
- Iran disrupted oil markets; carriers discovered fresh ways to recover fuel costs.
- When the U.S. struck Iran on February 28, bunker prices surged nearly 90% within three weeks. Carriers responded quickly, introducing Emergency Bunker Adjustment Factors before most customers had digested the news.
- The rationale was understandable: fuel is often the single largest operating expense on a voyage. The complication was that quarterly bunker formulas were already moving higher for exactly the same reason.
- By Q3, many shippers found themselves paying emergency fuel charges alongside increased ordinary fuel charges. One fuel shock produced two recovery mechanisms, both arriving conveniently on the same invoice.
- Then came the industry’s favorite supporting exhibit: the International Energy Agency’s assessment of the crisis. Phew, the IEA didn’t call the closure significant. Nor major. Nor severe. We must have dodged a bullet, right y’all?!
- Nope, they called it the “largest supply disruption in the history of the global oil market.”
- Wait, what? “Ever” is a powerful word. Anybody remember the 1970’s?
- Iran shut down a corridor carrying roughly one-fifth of the world’s oil supply.
- For God’s sake, Qatar, a nation (!), declared Force Majeure (did we say “for God’s sake” already?), while damage at Ras Laffan sent LNG markets into immediate turmoil (“turmgas” feels better if only it was a word!).
- Asian LNG spot prices jumped 140% as traders began pricing in years, not months, of disruption.
- Sea-Intelligence estimates the conflict has added approximately $5.5 billion in bunker expense across container shipping. No reasonable observer would argue carriers should simply absorb increases of that magnitude indefinitely.
- Yet fuel surcharges were only one part of the industry’s response to the crisis. Carriers simultaneously reduced available capacity by blanking approximately seven trans-Pacific sailings each week. Let’s call that 100,000 containers on any given Monday-Sunday.
- As if you didn’t know this already (eye roll), Shanghai-to-Los Angeles spot rates climbed quickly to $4,565, while New York routings reached $5,505 per container.
- What frustrates shippers is the growing sense that every path through the crisis leads to another bill (isn’t that just déjà vu all over again!).
- The Ayatollah may have closed Hormuz, but carriers ensured the consequences extended well beyond the Gulf.
Peak-A-Boo
- We’ve looked at the recent past globally in The Ayatollah’s EBAF. Now it’s time to lace up the hiking boots, dust off the crampons and ask whether the Transpac has reached the summit or if this is just another false peak.
- Demand found its footing. May Transpacific volumes climbed 13% over April, but June has settled onto a narrow ledge, tracking roughly flat.
- Supply kept a firm belay. Blank sailings continued to offset extra-loader injections, preventing capacity from flooding the trail.
- The ascent isn’t smooth. Roll pools, vessel bunching, and equipment shortages remain the steepest part of the climb, keeping space tight.
- The expedition isn’t over. Carriers are still clearing cargo backlogs while taking fresh bookings, leaving little room to catch their breath through July.
- Rates continue their ascent. FAK levels have climbed to their highest point in a year, with another higher push planned for July.
- USWC: $6,300/FEU → projected $7,000 (July 1) / $7,000 (July 15)
- USEC: $7,600 → projected $8,100 (July 1 & 15)
- The thin air: July capacity is forecast to expand roughly 13%, which could take some altitude out of carriers’ ambitious rate targets.
- Crystal ball: June was a major step up from April and May. With very few blank sailings expected in July, the market will discover whether demand has enough oxygen to carry rates higher or whether we’re about to descend from the first summit.
- Peak season has finally emerged from the clouds. The only question is whether we’ve planted the flag or merely reached base camp for the next climb.
Prepare for Takeoff
- Something’s in the air: Global air cargo spot rates are now 48% higher than a year ago, while capacity has grown just 2%. That’s less “market correction” and more “market conviction.”
- Up in the air: Relief isn’t on the departure board yet. Global demand is running 5% higher, Asia is at 8%, and semiconductors, AI infrastructure, and early peak-season shipments continue soaking up premium capacity.
- Don’t hold your breath: A meaningful rate decline is still up in the air. Demand will need to lose altitude before pricing does.
- Put some air under it: Jet fuel prices have become another tailwind for higher costs. Even after easing from recent highs, U.S. Gulf Coast jet fuel remains roughly 70% above pre-disruption levels earlier this year, while the broader airline industry says elevated fuel costs are one of the biggest reasons profits have been cut nearly in half.
- A breath of fresh air: San Francisco International is building a 310,000-square-foot automated cargo terminal featuring three rail-guided Elevating Transfer Vehicles capable of moving Unit Load Devices both vertically and horizontally at the same time.
- Clear the air: Completion is expected in Spring 2028, with operations beginning later that year—roughly two peak seasons after shippers would’ve liked it online. Better late than never.
- Something else is in the air: As Vietnam continues strengthening its manufacturing role, Vietnam Airlines Cargo and ECS Group have formalized a U.S. cargo sales partnership centered on San Francisco while also expanding global connections through Korea.
The Forced Labor Cliff Notes Edition
- Forced labor enforcement has become one of CBP’s highest-profile enforcement priorities over the last several years. Unfortunately, understanding it has sometimes required navigating multiple authorities, guidance documents, acronyms, and enough cross-references to qualify as summer reading.
- CBP recently released an updated Forced Labor Enforcement Operational Guidance for Importers, effectively creating the closest thing we’ve seen to The Forced Labor Cliff Notes.
- The updated document consolidates the three primary authorities used by CBP into a single resource, giving importers a clearer view of how the agency approaches enforcement and compliance expectations.
- More importantly, it provides greater transparency into how CBP administers forced labor enforcement in practice—something many importers have been piecing together from webinars, guidance documents, detention notices, and enforcement actions for years.
- The guide doesn’t introduce new requirements, but it does offer a much more complete picture of how CBP evaluates compliance, reviews evidence, and applies its authorities across different scenarios.
- In other words, CBP isn’t changing the exam. They’re just giving everyone a better look at the syllabus.
- For importers reviewing supply chain due diligence programs, supplier documentation, or forced labor controls, this guide is worth bookmarking.
- Questions can be directed to [email protected].
- The updated Forced Labor Enforcement Operational Guidance for Importers can be found here: CBP Forced Labor Enforcement Operational Guidance for Importers
3, 2, 1…Ready or Not, It's (Almost) Time for CPSC Fun!
- Remember all those reminders, webinars, resource pages, FAQs, presentations, pilot programs, and gentle nudges about CPSC eFiling? Well, the countdown is almost over.
- The Consumer Product Safety Commission (CPSC) recently released its final “3…2…1… Go” webinar, completing a series designed to help importers and customs brokers prepare for mandatory eFiling requirements.
- The webinar series walks participants through the fundamentals of eFiling and provides practical guidance for getting started before the requirement becomes mandatory.
- Translation: if eFiling is still sitting on your compliance to-do list, CPSC has kindly provided the tutorial level.
- Mandatory eFiling begins July 8, 2026, which means the practice rounds are quickly giving way to the real thing.
- The full “3…2…1… Go” webinar series is available on CPSC’s YouTube channel for companies looking to brush up on requirements, processes, and filing expectations.
- Nobody can say CPSC didn’t give fair warning. The countdown clock has been running for months.
- Ready or not, July 8 is coming.
- Watch the final webinar here.
Mind the Compliance Gap
- Americans and Brits may share a language, but sanctions compliance still comes with a translation challenge.
- The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) and the United Kingdom’s Office of Financial Sanctions Implementation (OFSI) recently published joint guidance designed to help businesses understand key similarities and differences between the two sanctions regimes.
- While the two programs often pursue similar policy goals, the details can vary in ways that matter for compliance teams operating on both sides of the Atlantic.
- The guidance compares several core topics, including:
- sanctions lists
- licensing frameworks
- recordkeeping expectations
- reporting obligations
- Think of it as a side-by-side comparison rather than a harmonization effort. The goal isn’t to make the rules identical. The goal is to help organizations understand where they overlap and where they diverge.
- For companies navigating both jurisdictions, that’s particularly valuable. Nothing creates compliance headaches quite like assuming two regulators mean the same thing simply because they’re speaking English.
- The guidance provides a useful starting point, but organizations should still consult the underlying OFAC and OFSI regulations when evaluating specific transactions, parties, or sanctions obligations.
- In other words, the two countries may be standing on the same platform, but there’s still a compliance gap worth watching.
- Review the joint OFAC-OFSI guidance here.
Rails, Ramps, and Robots
- The Mode Nobody Wanted Is Now the Mode Everyone Needs
- After two-plus years of excess truck capacity and freight markets soft enough to nap on, the Iran war’s fuel shock sent shippers sprinting for the rails in March, April, and May.
- Domestic container moves jumped 9% year over year in this Spring, with Southern California volumes up more than 20% on Union Pacific alone. Intermodal rail is having its main character moment!
- Union Pacific Would Like to Charge You Extra for Noticing It’s Good Now
- UP has imposed a $500 peak season surcharge on low-volume shippers in Southern California starting June 21.
- The surcharge only hits shippers moving fewer than five loads per week, which exempts the big players while dinging exactly the smaller shippers who fled to rail to escape diesel costs.
- Welcome to intermodal. Please enjoy your surcharge.
- BNSF Is Building a $4 Billion City for Containers in the Desert
- The Barstow International Gateway, 4,500 acres, $4 billion, 130 miles northeast of Long Beach, has cleared Barstow City Council approval and is on track to break ground late this year, with an open date of 2028.
- The idea: transload ocean containers into domestic 53-foot boxes inland, eliminating the whole drayage-to-cross-dock-to-rail-terminal shuffle that currently clogs Southern California surface streets while snagging that audition as a Rube Goldberg machine. Let’s face it LA/LGB domestic might be expensive, but it is chronically late!
- It also gives BNSF an inland staging point for international freight, functioning as a pressure valve for port congestion.
