Featured Headlines:
CAPE Takes the Stage for Act III
Trains, Trucks and Highway Robbery
The World Wide Bet
- Globalization has been pronounced dead so many times that even the undertakers have stopped showing up. Tariffs, trade wars, nationalism, geopolitical hostility. Yet the corpse keeps staggering back to life, ordering merchandise and demanding more semiconductors. Welcome to The Walking Debt (streaming on the WWB).
- The World Trade Organization forecasts global merchandise trade growth of 3.9% in 2026 and 4.1% in 2027, exceeding projected global GDP growth of 2.6% and 2.9%. Since the 2008 financial crisis, international trade has rarely outpaced the world economy. Globalization, unlike the Python parrot, is decidedly not deceased.
- The unlikely hero? Artificial intelligence. According to WTO economists, AI-related products accounted for nearly half the increase in global merchandise trade value during the first half of 2026. Apparently, teaching computers to think requires an extraordinary amount of stuff.
- Semiconductors, servers, and data-center equipment are crisscrossing oceans as technology companies race to build AI infrastructure. The irony: America wants technological independence, but much of its AI hardware comes from overseas. Globalization isn’t disappearing. It’s getting plugged in.
- One Columbia University economist estimates cumulative AI infrastructure investment could approach $9 trillion by 2032, eclipsing America’s 19th-century railroad boom as a share of GDP. At least the railroads came with dining cars.
- Here’s where things get interesting. South Korea and Taiwan manufacture critical components, accumulating export earnings that partly flow back into American stocks and bonds. America buys the equipment, Asia invests the proceeds, and America borrows and spends some more. The merchandise travels west; the money makes a round trip.
- South Korean investors alone increased their net purchases of US equities from $17 billion to $69 billion on a trailing 12-month basis, according to Bloomberg. International trade and financial markets are becoming increasingly intertwined.
- The arrangement works beautifully while the music plays. But America’s debt is approaching $40 trillion, borrowing costs remain a concern, and an AI investment bust could spread losses far beyond Silicon Valley. Financial “zombie contagion” apparently has excellent international distribution.
- So, here’s the $9 trillion question: Is AI building another generation of global prosperity or inflating history’s most expensive financial bubble? Either way, globalization has returned from the dead, and this time it’s brought a very large electric bill. And perhaps a craving for live human brains.
Everybody Was Kung Fu Dumping
- Everybody was Kung Fu dumping! Those goods ship fast as lightning! From Johannesburg to São Paulo, manufacturers are discovering that competing with the world’s largest exporter is no harmless game of dodgeball.
- China’s merchandise trade surplus reached $938 billion through September, on course to surpass its record $1.2 trillion in 2025. With American tariffs restricting hall passes to the US market, Chinese exporters are finding customers elsewhere. The world’s largest factory apparently doesn’t take recess breaks.
- Consider South Africa, a nation of 65 million already battling expensive energy, failing infrastructure, and sluggish growth. Chinese exports surged nearly 30% during the first eight months of 2026 and have more than doubled since 2020.
- Moody’s Ratings identifies South Africa as Africa’s most exposed economy to Chinese manufacturing competition. Machinery and automotive components are particularly vulnerable, while producers of steel fasteners, plasterboard, and plastics are lining up outside the vice principal’s office demanding protection.
- South Africa isn’t the only kid getting shoved around. Chinese automobile brands captured 17% of Brazil’s new-car sales through September, versus 9% in 2025. September alone reached 25%. Brazilian automakers fear the next import might be unemployment.
- Europe has also had enough of the schoolyard bully. EU officials are considering safeguards against Chinese imports, including hybrid vehicles, while Germany blocked COSCO from acquiring an 80% stake in a Hamburg freight forwarder, citing security concerns and dangerous supply chain dependencies.
- Meanwhile, the US and 14 other economies pledged to confront excess manufacturing capacity. China wasn’t named, but even the substitute teacher knew who they meant.
- One delicious irony: South Africa declined to sign the statement despite its considerable exposure. Apparently, confronting the school bully gets complicated when he’s also one of your biggest trading partners.
- There’s the dilemma. Consumers and importers love inexpensive merchandise. Manufacturers and workers worry about survival. Protect domestic industry too aggressively and prices rise. Leave the doors wide open and factories may close.
- China’s factories aren’t slowing down. Trade wars don’t always require tariffs to inflict casualties. Sometimes the trouble arrives in metal containers, priced to move, with free shipping to the nearest industrial crisis.
- Everybody was Kung Fu dumping. But at least the other kids have stopped handing over their lunch money.
CAPE Takes the Stage for Act III
- The curtain rises. The Importer of Record number is in place. Somewhere backstage, 53 million entry summaries are quietly panicking.
- On October 6, U.S. Customs and Border Protection (CBP) officially deployed Phase 3 of its Consolidated Administration and Processing of Entries (CAPE) system, opening another act in the rather theatrical production known as the IEEPA tariff refund process.
- CAPE was created after the courts ruled that the IEEPA tariffs were unlawfully imposed, leaving CBP to process an extraordinary volume of potential refunds. Since reviewing millions of entries one by one would require a run longer than The Phantom of the Opera, CBP built a system capable of grouping eligible entries into consolidated refund declarations.
- The opening acts focused on entries CBP could still adjust administratively, including unliquidated and certain recently liquidated entries. Phase 3 brings a more complicated cast to center stage: certain finally liquidated entries that CBP cannot revisit without a court order directing reliquidation.
- A brief program note before anyone applauds: finally liquidated describes the legal status of the entries. It does not mean CAPE has reached its grand finale. This particular drama still has several unresolved plotlines.
- Phase 3 is also a limited engagement. It applies only to plaintiffs in Court of International Trade (CIT) cases whose entries are covered by an order directing CBP to reliquidate them without the IEEPA duties.
- Plaintiffs that supplied CBP with a valid Importer of Record (IOR) number by July 30, 2026, may now submit Phase 3 CAPE declarations. CBP notified counsel for those plaintiffs when the functionality went live.
- Those that provided their IOR numbers after July 30 remain just offstage. CBP says additional instructions are coming, but it has not yet called that group forward for its entrance.
- Even for the current cast, deployment does not make refunds automatic. Eligible plaintiffs must submit CAPE declarations through the Automated Commercial Environment (ACE), and CBP must validate the entries before reliquidation and payment can occur. No one simply walks onstage and collects an oversized refund check.
- Additional details are available in CBP’s declaration filed with the CIT.
- Act III is officially underway. Some plaintiffs have taken the stage, others are still waiting in the wings, and the curtain is nowhere near ready to fall.
Honey, I Grew the Entry
- U.S. Customs and Border Protection (CBP) has apparently decided that informal entries need to grow up.
- On October 8, CBP published a proposed rule for low-value shipments covering merchandise valued at $2,500 or less. Despite the word informal, CBP would like more data, earlier filing and considerably better manners.
- Under the proposal, Entry Type 11 filings would become fully electronic and would need to be submitted before or upon the date of importation. The current option to stroll in with a paper filing would be retired.
- Filers would also need to identify the final delivery party when it differs from the ultimate consignee. Apparently, “somewhere in America” is no longer quite enough for risk assessment.
- International mail would receive its own electronic Entry Type 13 process. The filing would largely mirror Entry Type 11 but would add mail-specific information, including the sender’s identity and address.
- Carriers transporting international mail would also need to provide the shipment’s Universal Postal Union tracking number on the inward manifest. CBP could then match the arriving package to its entry and determine whether the paperwork arrived on time, which is more than can always be said for the package.
- Certain consignees that are not the owner or purchaser—including carriers, freight forwarders and postal operators—would need to appoint a licensed customs broker to act as the Importer of Record.
- Proposed bonding requirements would apply to affected Entry Type 11 and Entry Type 13 filings. A shipment that once needed little more than a modest value and a mailing label may therefore require an electronic entry, additional parties, more data and either a single-transaction or continuous bond. They grow up so fast.
- Mail shipments that arrive without a proper entry would remain in CBP custody. If nobody files within 15 days, CBP proposes treating the package as voluntarily abandoned, after which it may be returned or destroyed under U.S. Postal Service procedures. The dead-letter office just got considerably more final.
- These changes are still proposals, not immediate filing requirements. CBP is accepting public comments through December 7, 2026.
- The shipments may still be low value. Under CBP’s proposal, the paperwork is ready for a growth spurt.
Typhoon Missed Again?!
- Global container shipping reliability collapsed to just 27% in September (!), its fourth consecutive monthly decline. Successive Asian typhoons have battered sailing schedules, congested major ports, and turned estimated arrival dates into increasingly imaginative works of fiction.
- Average vessel delays reached six days globally, with every major carrier reporting its worst delays in a year. On the Far East-to-Europe trade, reliability plunged to a breathtaking 4%, with vessel delays averaging nearly ten days behind schedule. That’s not a schedule. It’s a suggestion.
- The trouble doesn’t end when the skies clear. Vessel queues, missed connections, and congestion at transshipment hubs like Singapore spread delays across entire carrier networks. Mother Nature may have started this mess, but the dominoes keep falling long after she’s gone home.
- This is a Category 5 assault on shipping schedules, cargo planning and shipper sanity!
- There are encouraging signs. Waiting times at Shanghai and Ningbo improved substantially from their August peaks, suggesting the worst congestion may be easing. Unfortunately, restoring a shipping network is considerably harder than disrupting one.
- For you shippers, the consequences are anything but amusing. Missed retail windows, production interruptions, mounting inventory costs, and frustrated customers are real business problems. And when three out of four vessels are late, even the best logistics planning can feel like an exercise in organized helplessness.
- Typhoon Missed Again may be moving offshore, but its forecast remains painfully familiar: scattered delays, widespread frustration, and a stubborn chance of “absolutely no idea.”
What Could Possibly Go Wrong?
- What the hell is happening in the Middle East? Ocean carriers are returning to the Red Sea and Suez Canal just as Houthi-Saudi hostilities are escalating. Large container ship transits could soon exceed 50 per week, with a broader return anticipated by early 2027. Apparently, the shipping industry’s definition of improving conditions differs from everyone else’s.
- Recent drone and missile attacks on Saudi airports and energy facilities have disrupted aviation, with Riyadh’s international airport reportedly closed through October 17. Airlines are adjusting services, and freight forwarders are examining alternative gateways through Dubai, Abu Dhabi, and neighboring Gulf states.
- Meanwhile, the Strait of Hormuz remains a maritime headache, war-risk insurance is an expensive guessing game, and the renewed enthusiasm for Suez depends on a security situation that could deteriorate overnight.
- So, to summarize: carriers are returning to a region where hostilities are intensifying, air cargo is being rerouted, and insurers are recalculating their exposure. The good news? Everyone seems to have a plan. The bad news? So do the Houthis.
Trains, Trucks and Highway Robbery
- America’s railroads have a dream: convince millions of truckloads to abandon the highway and take the train. Industry estimates suggest 2.5 million additional domestic intermodal loads could move by rail over the next five years. The railroads agree there’s a fortune to be made. Naturally, they disagree about where to find it.
- Union Pacific believes its proposed $85 billion marriage to Norfolk Southern could lure 1.2 million truckloads onto rail within three years, primarily on routes exceeding 2,000 miles. J.B. Hunt and Swift see opportunity on shorter hauls, with Hunt identifying a whopping 7–11 million potential conversions. Apparently, everyone’s discovered the same pot of gold, but nobody agrees where the rainbow ends.
- Meanwhile, in Houston, trucking companies have dispensed with the dreaming and gone straight to the billing. Spot container drayage rates jumped 34% year over year in late September, nearly twice the national increase of 18%. Everything’s bigger in Texas, including the invoice.
- Houston’s loaded imports climbed 5% through August to a record 1.4 million TEUs, while imports from Asia surged nearly 12%. More containers are also heading farther inland to feed Texas manufacturing plants and data centers. Artificial intelligence may be the future, but apparently it still needs a truck driver named Bubba.
- Exporters are piling on. Gulf Coast polyethylene and polypropylene shipments jumped 29% as buyers sought alternatives to Middle Eastern resin supplies disrupted by the Strait of Hormuz crisis. That’s a lot of plastic competing for the same trucks. Houston, we have a pricing problem.
- Trucking conditions may improve in 2027, but Houston’s elevated drayage rates could become the starting point for next year’s contracts. Meanwhile, the railroads are busy calculating how many trucks they might someday replace. The truckers, bless their diesel-powered hearts, are busy calculating how much more to charge today.
