China Section 301 duty increase to 25% delayed (From CBP)
On February 24, 2019, the President directed a further delay in the duty increase. Until further notice, the duty rate for the goods covered by the September 21, 2018 Federal Register notice, as amended, will remain at 10 percent. The Section 301 duties currently only apply to products of China, and are based on the country of origin, not country of export. For more info, please go to
http://www.federalregister.com/Browse/Document/usa/na/fr/2019/3/5/2019-03935
GSP Eligibility for India, Turkey to be Terminated (From Sandler Travis)
President Trump announced March 4 his intent to terminate the eligibility of India and Turkey as beneficiary developing countries under the Generalized System of Preferences. These changes will not take effect until at least May 3 and will be enacted by a presidential proclamation. Once that proclamation takes effect, thousands of products imported from these two countries will no longer be eligible for duty-free treatment under GSP. For more info, please go to
https://www.strtrade.com/news-publications-GSP-India-Turkey-terminate-duty-030619.html?mkt_tok=eyJpIjoiWlRFeE5tSTRNREE0TldVMSIsInQiOiJ6QVczeCtKMFUxWVNrT0dEblZsZm42TFBlNHNBOTNiM1FUMkpUdG9MR0xrVW5seXlCWm8wVHgxM3NIWmJtc3lYWUhCWjVsZzNxMTF5T1I5cWp4NkkwZjIxMGIxcitaU25Bc1g2Y08wN24rdkhVRzJVZndhOVpYSzVvYWJ0aFRYZCJ9#utm_source=tradereport&utm_medium=email
Analysts forecast double-digit increase in trans-Pacific contract rates (From Journal of Commerce)
Early indications are that freight rates on US imports from Asia will increase 20-25 percent in the contracts that take effect on May 1. Alan Murphy, CEO and partner at SeaIntelligence Maritime Consulting, said that based on a SeaIntel model that uses current spot rates as an indicator, he predicts a 20 percent increase in 2019-2020 service contract rates from last year’s level of about $1,200 per FEU to the West Coast and $2,200 per FEU to the East Coast. Conversations with several non-vessel-operating common carriers (NVOs) and another industry analyst peg the West Coast rate at about $1,350 for the largest retailers and $100 or higher for other importers, although some carriers are reportedly still holding out for a base rate closer to $1,500 per FEU to the West Coast. Those projected base rates do not include a bunker fuel surcharge that carriers will most likely add around Jan. 1, 2020, when the International Maritime Organization’s (IMO’s) global mandate for use of low-sulfur fuel takes effect. Most of the 2019-2020 service contracts that US importers have already begun to negotiate with carriers will run from May 1 through April 30, 2020. Note next article.
Maersk and Hapag-Lloyd will require floating bunker charges in all 2019 -2020 contracts (From American Shipper)
The challenges presented by the mandate by the
International Maritime Organization that ships start using low-sulfur fuel
beginning on Jan. 1, 2020,
were addressed on March 5 by Søren Skou,
CEO of Maersk, and Rolf Habben Jansen, CEO of Hapag-Lloyd. Both said Tuesday that their companies will
insist on floating bunker clauses as they negotiate contracts with shippers in
the transpacific for the 2019-20 contract year. Skou said about half of
Maersk’s business is done through contracts.
For more info, please go to
https://www.americanshipper.com/magazine/daily/?year=2019&month=3&day=6&page_number=1&via=asdaily
Marine insurance very important!
The recent fire on the Yantian Express and subsequent general average (GA) has highlighted the need for marine insurance on every shipment. When GA is declared, the carrier hires an adjuster to assess the damage, then each container is assessed a portion of the cost to repair or replace the vessel in proportion to the value of your cargo. A recent GA resulted in an assessment of 42.5 percent of the CIF value of each container plus an 11.5 percent security deposit. This means that a shipment valued at US$50,000.00 would have to put up US$28,000.00 in security. If you have valid marine insurance, the carrier will release the cargo as soon as the situation allows (which still may be several months). If you cannot provide proof of insurance, the carrier will require a deposit of AT LEAST that much, usually more, before they will release it, and then there is usually a delay while the carrier processes the funds. Please keep in mind that this is in ADDITION to any damage done to your merchandise! Further, the carrier can require additional payments to move the container from the place the GA is declared to its original destination. This is FAO the cargo (importer) and is NOT covered by marine insurance. Our open marine policy is with Lloyd’s of London, and if we insure your shipments, you are well covered! Please call us if you have any questions on marine insurance.
Reminder: Imported Composite Wood Products Must be TSCA Compliant as of March 22, 2019 (From February newsletter)
For more info, please go to:
https://www.strtrade.com/news-publications-imported-composite-wood-products-121318.html?mkt_tok=eyJpIjoiTVRGbE9XWm1PVEEwTURBNSIsInQiOiIyYlwvYTFFOEFHOHhVenB0UmxSbHZhVXJUbGdOWTZHOHZYQlhWaGhLNEdoRUEySEpOdmlQSm04b1wvOWF6RmR3bENUYVE1WjhzZHNoRTRFXC9qV
Brexit
It is still very much undecided, but our UK agent says that exports from the UK to the US should not be significantly affected.
Contact us with any questions.
Lee Hardeman LeeH@LHCB.com Direct: 404-477-3452
Sandy Cato SandyC@LHCB.com Direct: 404-477-3454
If you do not wish to continue to receive our newsletter, please email me at leeh@lhcb.com and put “Unsubscribe” in the subject line.