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Use the Forced Labor Comment Process!

Upcoming CBP Formality Changes

Jumping Gas Gas

Canuck This!

Trucking Labored

Trading (With) Places

The Fund is No Fun

Jiangsu to the Rescue

Charleston Chews Through Backlog

Yantian Can’t Free on Five

Use the Forced Labor Comment Process!

As required by the Uyghur Forced Labor Prevention Act, the US Department of Homeland Security is seeking public comments on how best to ensure that goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part with forced labor in the People’s Republic of China are not imported into the United States.

The list of suggested questions for commenters to consider includes, but is not limited to, the following:

  1. What are the risks of importing goods, wares, articles and merchandise mined, produced, or manufactured wholly or in part with forced labor in the People’s Republic of China, including from the Xinjiang Uyghur Autonomous Region or made by Uyghurs, Kazakhs, Kyrgyz, Tibetans, or members of other persecuted groups in any other part of the People’s Republic of China?
  2. To the extent feasible, as part of the assessment of risks, what mechanisms, including the potential involvement in supply chains of entities that may use forced labor, could lead to the importation into the United States from the People’s Republic of China, including through third countries of goods, wares, articles and merchandise mined, produced, or manufactured wholly or in part with forced labor?
  3. What procedures can be implemented or improved to reduce the threats identified in Question 2?
  4. What forms does the use of forced labor take in the People’s Republic of China and the Xinjiang Uyghur Autonomous Region? For example, what “pairing assistance” and “poverty alleviation” or other government labor schemes exist in the People’s Republic of China that include the forced labor of Uyghurs, Kazakhs, Kyrgyz, Tibetans, or members of other persecuted groups outside of the Xinjiang Uyghur Autonomous Region? What similar programs exist in which work, or services are extracted from Uyghurs, Kazakhs, Kyrgyz, Tibetans, or members of other persecuted groups under the threat of penalty or for which they have not offered themselves voluntarily?
  5. What goods are mined, produced, or manufactured wholly or in part with forced labor in the Xinjiang Uyghur Autonomous Region or by entities that work with the government of the Xinjiang Uyghur Autonomous Region to recruit, transport, transfer, harbor, or receive forced labor?
  6. In addition to cotton, tomatoes, and polysilicon, are there any other sectors which should be high priority for enforcement?
  7. What unique characteristics of such high-priority sector supply chains, including cotton, tomato, and/or the polysilicon supply chains, need to be considered in developing measures to prevent the importation of goods mined, produced, or manufactured wholly or in part with forced labor in the People’s Republic of China?
  8. How can the United States identify additional entities that export products that are mined, produced, or manufactured wholly or in part with forced labor in the Xinjiang Uyghur Autonomous Region or by entities that work with the government of the Xinjiang Uyghur Autonomous Region to recruit, transport, transfer, harbor, or receive forced labor?
  9. How can the United States most effectively enforce the UFLPA against entities whose goods, wares, articles, or merchandise are made wholly or in part with forced labor in the People’s Republic of China and imported into the United States?
  10. What efforts, initiatives, and tools and technologies should be adopted to ensure that U.S. Customs and Border Protection can accurately identify, and trace goods entered at any U.S. ports in violation of section 307 of the Tariff Act of 1930, as amended?
  11. What due diligence, effective supply chain tracing, and supply chain management measures can importers leverage to ensure that they do not import any goods mined, produced, or manufactured wholly or in part with forced labor from the People’s Republic of China, especially from the Xinjiang Uyghur Autonomous Region?
  12. What type, nature, and extent of evidence can companies provide to reasonably demonstrate that goods originating in the People’s Republic of China were not mined, produced, or manufactured wholly or in part with forced labor in the Xinjiang Uyghur Autonomous Region?
  13. What tools could provide greater clarity to companies on how to ensure upcoming importations from the People’s Republic of China were not mined, produced, or manufactured wholly or in part with forced labor in the Xinjiang Uyghur Autonomous Region? To what extent is there a need for a common set of supply chain traceability and verification standards, through a widely endorsed protocol, and what current government or private sector infrastructure exists to support such a protocol?
  14. What type, nature, and extent of evidence can demonstrate that goods originating in the People’s Republic of China, including goods detained or seized pursuant to section 307 of the Tariff Act of 1930, as amended, were not mined, produced, or manufactured wholly or in part with forced labor?
  15. What measures can be taken to trace the origin of goods, offer greater supply chain transparency, and identify third-country supply chain routes for goods mined, produced, or manufactured wholly or in part with forced labor in the People’s Republic of China?
  16. How can the U. S. Government coordinate and collaborate on an ongoing basis with appropriate nongovernmental organizations and private sector entities to implement and update the strategy that the FLETF will produce pursuant to the UFLPA?
  17. How can the U.S. Government improve coordination with nongovernmental organizations and the private sector to combat forced labor in supply chains, and how can these serve as a model to support implementation of the UFLPA?
  18. Is there any additional information the FLETF should consider related to how best to implement the UFLPA, including other measures for ensuring that goods mined, produced, or manufactured wholly or in part with forced labor do not enter the United States?

Comments are due by March 10, 2022; click here to view official Federal Register Notice.

Upcoming CBP Formality Changes

  • Beginning January 29th, trade users will no longer be able to submit responses to certain requests/notifications from US Customs and Border Protection (CBP) directly through the ACE Portal.
  • Instead, electric responses will only be available through the Document Image System (DIS)—or via EDI submission—for CBP Forms 28, 29 and 4647.
  • The new ACE forms application will be deployed in April 2022, which will allow users to directly respond through the new application.

Jumping Gas Gas

  • The average price of unleaded fuel (combining all types) increased another 5.5 cents and now sits at $3.78— the highest average price since September 2014.
  • The average cost of diesel is 40% higher than one year ago; similarly, unleaded is up 35% in the past 12 months.
  • Shippers can expect increases in fuel surcharges for all modes of trucking, especially long-haul moves.

Canuck This!

  • A convoy of Canadian truckers has descended in Ottawa, Canada to protest the new vaccine requirements on both sides of the (lengthy) US-Canada border.
  • Ottawa police have indicated that protestors have cooperated with officials and have been largely peaceful; however, the Canadian government is preparing for potential violence.
  • The “Freedom Convoy” has raised $2.5M to date; they are calling for the delay or cancellation of recent vaccine mandates that will reduce border trucking capacity by as much as 15%.
  • Many shippers are sympathetic due to immediate rate hikes and capacity constrictions. It is estimated that 25,000 Canadian truckers who specialize in cross-border remain unvaccinated, and the number of US drivers affected is even higher.

Trucking Labored

  • When analyzing all modes of transport, truckers still handle over 70% of American transportation by value. As we have all witnessed, retail and grocery shelves are increasingly bare, and trucking plays a huge role.
  • Since the pandemic—and despite unprecedented growth in consumer demand—the US trucking industry has lost 6% of the total trucker population.
  • Industry observers have noted a plunge in job satisfaction and more wage competition in other industries; during the pandemic, truckers have faced chronic supply chain congestion, quarantines, and demoralizing Covid complications for pick-ups, deliveries, meals, and rest areas.
  • For port truckers, the chronic congestion equals fewer daily turns and a lowering of real wages even after increased pay per turn.
  • The American Trucking Association estimates that the current shortage has doubled in the past year and currently eclipses 80,000 drivers.

Trading (With) Places

  • While December’s results have not been announced, the US Commerce Department announced that the US merchandise (total goods) trade deficit established a new monthly of $97.8B in November.
  • November’s jump was a full 17.5% higher than October, with the total value of imports climbing 5% in just one month.
  • US imports for the month totaled $252.4B; while the press all but scolds Americans for current consumer demand, consumer products represented just 26.7% of November imports, with industrial supplies and raw materials dominating the total numbers.

The Fund is No Fun

  • The International Monetary Fund (IMF) has reduced economic growth estimates for the United States, Germany, and the UK. Globally, the IMF has reduced their forecast for economic growth from 4.9% to 4.4%.
  • In related news, the IMF also increased their forecast for global inflation from 2.3% to 3.9%, with food and energy costs of particular concern.
  • The IMF predicts that Omicron will fade rapidly as an economic obstacle in Q2, but the snarled global supply chain problems will persist into Q3, 2022.
  • Also of great concern— especially in highly developed economies— is the chronic shortage of semi-conductors which greatly hinders expansion for automobiles and high-end electronics.
  • After falling 3% in 2020, global economic growth was just above 6% in 2021.

Jiangsu to the Rescue

  • Several mid-sized airports in China’s Jiangsu province, a coastal region just north of Shanghai, have combined to grow 489% since the pandemic.
  • Growth in medical products (including PPE) and the greater need for critical raw materials (both import and export) have contributed to the growth.
  • Airports in the region include Nantong, Sunan Shuofang, Lianshui, Guangfu, Nanjing Lukou, and Lianyungang. With the famous airports in Shanghai, Ningbo, and Beijing struggling mightily with congestion, quarantines, and labor shortages, Jiangsu airports provide shippers with lift and flexibility during this time of shipping chaos.
  • Only Nanjing directly increases capacity to the US, but the other regional airports support raw materials and regional shipping that positively impacts Chinese exports to the US.

Charleston Chews Through Backlog

  • After a heavy ice storm last weekend, the vessel backlog at Charleston grew to 20 as of Wednesday (January 26).
  • Omicron labor shortages have made it difficult to catch up, but the local port authority has emphasized on-port container congestion as the main hurdle in re-establishing normal operations.
  • Unlike most US ports, Charleston had largely avoided vessel backlogs in 2021.

Yantian Can’t Free on Five

  • Yantian International Container Terminal, which handles 50% of the total container cargo in Shenzhen has reduced export receiving time to 4 days before vessels berth.
  • Authorities describe the port as completely full, as vessel on-time performance slipped below 20% and average delays eclipsed 7 days. When vessels are late, containers are stuck on port for longer and longer periods.
  • Nearly 25% of export container trade between China and the US flows through Yantian, and the restricted gate-in rules, coupled with chronic delays associated with Covid testing, will certainly create challenges for shippers looking to ship before Chinese New Year (CNY).
  • Shenzhen and Yantian Terminal are certainly not alone; berthing delays, yard congestion, and labor shortages are also being reported in Shanghai, Ningbo, Tianjin, and Dalian.