Market Updates

UWL Logistics Roundup | July 2019

July brought us a brief respite from the escalating trade tensions between the U.S. and China.  While the two nations have yet to reach an agreement, there has been a ceasefire on new tariffs (for now) and talks are expected to continue in September. 

That doesn't mean this year's trans-Pacific peak shipping season will go on without a hitch, however.  The looming IMO 2020 low-sulfur fuel regulations which come into force on Jan 1 could cause disruptions as carriers ready their vessels and new fuel surcharges begin to take effect.  As we head into peak season, keep an eye out for blank sailings.  

Now, let's take a look at some of the major events that happened last month in global trade and shipping. 

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International Trade, Regulatory & Compliance News

 

Trump says he will seek U.S. trade accord with Brazil

Brazil and the U.S. are working on a free trade agreement, Trump told reporters outside of the White House on July 30. Marcos Troyjo, Brazil’s deputy economy minister for foreign trade, told Reuters his country has “ambitious” goals to facilitate trade and boost investment between the two countries, especially in infrastructure.

Keep reading >>

 

U.S.-China Tariffs: Consider Changing Your Supply Chain

Here are 5 tips from SupplyChain 24/7 for minimizing negative effects from the China trade tariffs on your supply chain:

  1. Start With The Big Picture: Head over to the Automated Commercial Environment system (ACE) to analyze your import data, and look into the Harmonized Tariff Schedule (HTS) codes of your products and their components.

  2. Find Alternatives To Your Current Supply Chain Partners: Identify alternative sources for components and raw materials in areas outside of China, like other Southeast Asia countries including Indonesia, Vietnam, or the Philipines.

  3. Consider Domestic Partners: Advantages of working with domestic manufacturing partners include greater IP security, lowered transportation costs, and high labor standards. 

  4. Smaller Partners Can Produce Bigger Results: Smaller companies can avoid regulatory costs because their small size enables them to move quickly. They are often more agile and flexible than larger counterparts. 

  5. Rethink Technology In Your Product Design & Development: Consider product redesigns or alternative components that can be used while still maintaining product quality. 

Read the full article here >>

 

China's average tariff rate increases for US goods, falls for everyone else

The Peterson Institute for International Economics released a report analyzing China's retaliatory tariff actions throughout the U.S.-China trade war.  

Figure 1: China’s average tariff rate is climbing on US goods and falling for the rest of the world

"China has increased tariffs on US exports to an average 20.7 percent. But also striking for American farmers, companies, and workers is that China has reduced tariffs on competing products imported from everyone else to an average of only 6.7 percent," the report stated. 

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Guatemala agrees to new Asylum rules, avoiding tariffs

After President Trump threatened to impose tariffs on Guatemala, tax money that Guatemalan migrants in the United States send back to family members, or to ban all travel from the country, Guatemala signed a "cooperative agreement" that would make Salvadoran and Honduran migrants ineligible for protection in the United States if they had traveled through Guatemala and did not first apply for asylum there. 

Read more >>

 

Regulatory Updates from the USTR

  • USTR has announced the exclusion of several crystalline silicon photovoltaic (CSPV) cells and other products from the Section 201 Solar Products Safeguard Measure, effective June 13, 2019 at 12:01AM EDT.  Read more >>

  • USTR has announced another round of product exclusions for List 1 of the China Section 301 tariffs. Products include certain types of heat exchangers, power and water pumps, propane powered forklift trucks, parts and assemblies for seeders or spreaders, check valves, and more. These exclusions apply as of July 6, 2018 and will extend for a year after the July 9, 2019 notice.  View the notice here >>

  • USTR has announced product exclusions for List 2 of Section 301 tariffs on Chinese goods. The list covers 69 product descriptions from chapters 39, 84, 85, and 90, including various polyethylene products, motors/engines, pet collars, pumps, electrical equipment and more. View the notice here (list on pg 6) >>

  • List 3 Exclusion Process opened on June 30.  This time around, the Section 301 tariff exclusion request process for List 3 will be done through an online portal which opened at noon EDT on June 30, 2019.  Visit the Exclusion Requests Portal >>

  • EUROPE: USTR has proposed an additional 89 tariff subheadings, including food products, whiskies, chemicals, copper and brass, valued at nearly $4 billion that could be subject to additional Section 301 duties in its ongoing dispute with the EU over subsidies on large civil aircraft.  Read more >>

 

More trade stories

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Industry News: Automotive, Manufacturing, Retail & More

 

Image result for toys r usToy 'R' Us announces first new stores, but you might not recognize them

The toy retailer is teaming up with next-gen retail and tech company, B8ta, to open two new stores this fall.  The stores will be small with toys on display for kids to play with and spaces for toy demonstrations and events, Forbes reports.

Read more >>

 

From Old Navy to Madewell: How sub-brands grow up to eat their parents

Some stores began as a way for retailers to expand their customer base. Then they took over. This story from Retail Dive explores what happens when sub-brands grow up to dominate their parent brand.

Read more >>

 

Auto Parts Makers Must Change With Times as Autonomous Tech Evolves

The car industry is "reinventing the wheel" to prepare for autonomous vehicles.

“Autonomous driving is a challenge for carmakers, but it’s a bigger challenge for conventional parts makers,” said Zhou Lei, a partner at Deloitte Tohmatsu Consulting in Tokyo. “They are striving to become the ‘five senses’ of the vehicle so they can remain relevant.”

This article from Transport Topics takes a look at some of the latest innovations in the space. 

Read more >>

 

More Industry News

 
 
 
 

Around the World:  Current Events

 

Shipping Disruptions (Congestion, Strikes, & Protests)

  • INDIA: Heavy traffic congestion near JNPT/Nhava Sheva is causing delays affecting in and out movement of containers to and from the port. 

    The JNPT Worker's Union has also proposed a port strike at Bharatiya port & dock Mazdoor Mahasangh (BMS) on Aug 5.  If the strike does occur, delays are expected.  We will be monitoring this situation.

  • CAMBODIA: Sihanoukville Port is experiencing some congestion which has caused productivity at the terminal to deteriorate. Feeder services and turnaround times are affected and feeder space is tight. The port is building an extended yard to help improve productivity, but expect congestion to continue until it is complete.

  • Protests and strikes occured throughout July in Puerto Rico, Mexico, Australia, and Chile

 

Brazil pension reform boosts markets, passes lower house of Congress

Support for Brazil's new pension reform bill is gaining momentum as it makes its way through commitee and on to Congress. The news has markets and investors celebrating!

On July 10, Brazil's lower house of Congress voted 379 to 131 to approve base text of the bill, clearing a major hurdle.

Read more >>

 

Despite widespread flooding, Louisiana was spared the brunt of Barry's wrath

The first hurricane of the 2019 Atlantic hurricane season, Tropical Storm Barry made landfall on July 13 on Marsh Island and Intracoastal City, Louisiana as a Category 1 hurricane before weakening back into a tropical storm.  Barry caused an estimated $500-900 million in damages.

Read more >>

 

Tension rise in the Strait of Hormuz prompting War Risk Surcharges

A narrow shipping route in the Persian Gulf has become the center of rising tensions between Iran and the UK and U.S. after several oil tankers were hit with blasts in the Gulf of Oman.  Due to these maritime incidents, carriers have implemented a "war risk surcharge" for cargo bound for the Middle East and Arabian Peninsula (Bahrain, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, United Arab Emirates, Israel, Jordan, Sudan).

Check out this article from BBC to learn more about the Strait of Hormuz and the current crisis in the Persian Gulf. 

Read more >>

 

More Current Events News

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Logistics News

 

IMO2020: The ‘biggest change in oil market history’ is less than six months away

On January 1, 2020, the International Maritime Organization (IMO) will enforce new emissions standards designed to significantly curb pollution produced by the world’s ships.  With less than six months to go before the new rules on marine fuels come into force, this article from CNBC takes a look at the far-reaching consequences of the coming changes.

Read more >>

 

Upward pressure on low-sulfur fuels raises shipper risk

How will #IMO2020 impact shippers? Fuel costs are expected to rise around 20% for ocean freight. We will also see more slow steaming as carriers try to reduce their fuel consumption and lower costs. This could lead to longer transit times and schedule unreliability in Q1. 

Read more >>

 

WATCH: JOC Chassis Primer

Everything you wanted to know about the chassis shortage explained in under 5 minutes, thanks to Ari Ashe from JOC.com

 

 

The Panama Canal is thirsty. That's a problem for ocean carriers.

Check out this deep dive from Supply Chain Dive on the drought conditions impacting the Panama Canal. We've been following the draft restrictions throughout the dry season. This article takes a look at the economic impact of the drought on the canal and explores possible solutions.

Read more >>

 

More Logistics Stories

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Port News  

 

US ports running smoothly ahead of expected ‘normal’ peak

🚢 Vessel space in Asia imports is expected to be strong in August through October, but year-over-year growth each month will be about 2 to 5 percent, JOC.com reports on this year's peak season expectations.

Read more >>

 

LA, Long Beach see Southeast Asian trade growth

Imports were up from Cambodia by 45% or 5,172 TEUs; from Vietnam by 21.9% or 40,056 TEUs; from Thailand by 10.6% or 8,984 TEUs. Exports were up to Malaysia by 51.7% or 11,159 TEUs; to Singapore by 43.2% or 6,791 TEUs; to South Korea by 27.3% or 24,223 TEUs; to Japan by 17% or 15,490 TEUs; and to Indonesia by 12.4% or 5,482 TEUs, reports American Shipper.

Read more >>

 

Port of Savannah moves record 4.5M TEUs

The Port of Savannah moved a record 4.5 million twenty-foot equivalent container units in the fiscal year that ended June 30, an increase of more than 305,000 TEUs, or 7.3 percent.

“Our ports are firing on all cylinders,” said Governor Brian Kemp. “This success is a testament to the men and women who work throughout our entire supply chain and make a difference for Georgia and the nation every day. Because of their commitment, our factories, farms and logistics providers are creating opportunity and prosperity in every corner of our state.”

Read more >>

 

More Port News

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Company News

 

Learn more about our land transportation solutions

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UWL provides reliable land transportation services throughout the United States, with cross-border intermodal rail services to Canada and Mexico.  Our nationwide reach, vetted partners, and efficient, reliable service ensure that every move, regardless of size, is handled with precision and urgency. 

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Thinking about expanding your business into Brazil but not sure where to begin?

Our Sales & Ops Manager, Barbara Echelmeier, answers your burning questions about our Brazilian office, challenges of shipping to Brazil, and the benefits of choosing UWL as your Brazilian 3PL partner.

Read the FAQ >>

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