Over the last week, many events in international trade and the global supply chain have occurred. Below is a recap of the critical things you should know:
Challenges continue with trade to and from China. Ocean carriers are issuing blank schedules into March in and out of China and air carriers are looking at the end of March before resuming regular service. Ocean carriers are expecting to have a full recovery by the end of March/early April. The ability to move cargo from the factories to the ports is hampered by government restrictions on road traffic, truck drivers and port workers.
Exporters may soon begin to feel the sting of limited container availability as containers are stacked in the Chinese ports but not moving. All port and terminal operations are business as usual for major cities in China and Hong Kong, except for Wuhan and Lianyungang. In Wuhan, some carriers have begun to accept bookings, while most continue to suspend service. Some carriers in Lianyungang are experiencing a diminished supply of forty-foot containers.
China is still in the early stages of restarting production amidst the coronavirus outbreak, which has impacted the container shipping industry more than ever in its 60-year history. At the time of publication, the Beijing government continues to work with factories on resuming cargo production and is assessing the local trucking capacity to prepare for the increase in exports. It has been reported that several factories have returned to or are close to returning to production. North and South China are approximately 70 percent operational, while the Zheijang Province is roughly 90 percent operational. However, production country-wide remains limited due to continuing travel restrictions that are halting migrant labor returning to work.
As anticipated, the demand for airfreight has increased, which has also increased rates. The next round of rate increases is expected to occur on February 28, 2020. Air travel between the U.S. and China is operating on Chinese airlines with limited capacity for air cargo, while U.S. airlines continue to suspend flights to and from China. More than 40 percent of the overall trucking capacity in Ningbo has resumed. Approximately 45 percent of trucking capacity has returned in Shanghai, compared to 50 percent in Shenzhen.
CBP’s Cargo Systems Messaging Service (CSMS) has recently released several updates. CBP issued CSMS #41721636 and CSMS #41630831, regarding U.S. Fish and Wildlife Service Implementation into ACE. CSMS #41703608 was issued regarding New Draft CATAIR instructions for e214 for testing to begin in late March or early April 2020.
Exclusions granted from List 1 (July 6, 2018) have been extended to October 1, 2020. A Federal Register notice on February 20, 2020, announced that 47 List 3 items were granted exclusions to the S301 duties ranging from flooring to desk accessories of medium-density fiberboard (MDF), cotton fabrics, digital scales and other various articles from Chapters 84 and 85. The latest exclusion also amended three previously excluded items, including product exclusion for dog and cat leashes, which is now limited to only dogs.
In other international trade news, Canadian rail service has been stifled due to the ongoing blockades that have the Canadian National Railway’s eastern network shut down. Ocean Carriers are opting to dock in New York and Baltimore to run cargo inland on U.S. railways. The blockade has been set up since February 6, 2020, in protest of a natural gas pipeline that has been planned to pass through tribal lands in British Columbia.
We will provide you with additional updates as we receive them. If you have any questions or concerns, please contact our team.