December 2023

Worse drought since 1960’s causing delays at Panama Canal (Various sources)

The Panama Canal Authority has reduced the number of ships allowed through from 38 to 24, and they warn they may reduce it to 16. Several hundred ships are backed up, and some have paid up to US$4MM to move to the head of the queue. The normal transit time is 8-10 hours, but is now taking 1-2 weeks. Forty percent of container traffic to the US uses the canal. The rainy season in Central America does not start until summer, so please expect delays up to 5-6 weeks in containers transiting the canal and an increase in surcharges as the Authority contemplates transit rate increases.

2024 container shipping outlook (FreightWaves)

Not only is the Panama Canal a choke point, but several other factors cause a rising concern of delays next year.  Many lines have switched to the Suez Canal, where the Bab-el-Mandeb Strait in the Red Sea is a choke point.  Also, the ILA, the union that represents dockworkers on the East and Gulf Coast ports, is threatening a strike when their current contract expires in October.  Further, many lines are cancelling sailings for financial reasons as rates remain low. 

Ed. note:  We urge you to plan for delays in 2024, and significant delays if your cargo is transiting the Panama Canal.

Certain products from China may lose exclusion on Jan 1 (From Sandler Travis & Rosenberg)

Importers of numerous goods from China could face higher tariffs starting Jan. 1, 2024, if hundreds of Section 301 tariff exclusions expire as scheduled Dec. 31. These include more than 300 exclusions of various products (click here for full list) as well as exclusions for 77 medical care products needed to address the COVID-pandemic. These exclusions are currently available for any product that meets the specified HTSUS numbers and product descriptions, regardless of whether the importer filed an exclusion request.  Any reimposed tariffs would join those that remain in effect on hundreds of billions of dollars’ worth of imports from China, which are expected to remain in effect regardless of the results of a review of those tariffs the Biden administration expects to conclude by the end of this year. However, U.S. Trade Representative Katherine Tai has said some changes are possible, including removals and/or additions, as well as a new exclusion process.