- Major retailers continue their attempts to reduce inventories that built up at West Coast ports during the recent port labor dispute, “potentially dampening prospects for a surge in shipping heading into the holiday season,” according to the Wall Street Journal. The National Retail Federation anticipates “only modest growth in container imports at US gateways this fall.”
- Interestingly, the Journal of Commerce* reports that, in August, West Coast ports experienced a notable increase in Asian imports “to take back market share they had lost to East Coast ports during the aforementioned labor dispute. This continues a trend of a redirection of cargo back to the west, from a peak of East Coast market share (34%) in the first quarter of 2015. (*JOC site registration required)
- The JOC also reports that the Port of Long Beach stated that much of its market share lost over the past year was regained. The port also does not expect any significant loss of cargo to the East Coast once the Panama Canal expansion is final in 2016.
For the last several years, pundits have argued whether 3D printing would transform traditional supply chains. Recently, however, the sentiment now seems to support change. According to American Shipper (September 2015)*, widespread adoption of 3D printing could affect the transportation industry in several ways:
- Transport companies might use 3D printers to support their own operations. For example, Maersk is researching the placement of 3D printers on its own tankers or oil rigs to make spare parts on-site, saving shipping time and costs.
- Companies could create services that cater to users of 3D printers. UPS has established a center with 100 3D printers which allows customers to upload a design for a product and have it delivered by UPS.
- Raw materials used by 3D printers could become an important commodity to be transported. There has been a significant increase is the use of 3D printing materials, such as polymers, plastics and metal powders, all of which must be delivered to the printing entity.
- Use of 3D printers could result in the manufacture of products closer to their point of consumption, perhaps reducing the need for transport of some products. Some experts see this only as a future possibility, viewing 3D printing as supplemental to traditional manufacturing, until such time as technology improves and prices drop, enabling more micro factories.
(*Site registration required)
US Customs has announced two more opportunities for the trade to assist with the ACE rollout as it relates to Partner Government Agencies (PGAs).
- CBP seeks additional participants to file ACE Cargo Release transactions that require National Highway Traffic Safety Administration (NHTSA) data to be submitted. Details available in CSMS #15-000691.
- The International Trade Data System (ITDS) Committee of the Trade Support Network (TSN) is creating a working group to discuss the technical solution and data elements to be required by the Drug Enforcement Administration (DEA) in new cargo release and control functionality in ACE. Details available in CSMS #15-000692.
California’s prohibitive “Made in the USA” label requirements have been relaxed by an amendment to state law. As reported by the law firm of DrinkerBiddle, effective September 1, companies are now allowed “to label their products as ‘Made in the USA’ if less than 5% of the product’s wholesale value is from foreign components, or if less than 10% of the wholesale value is from foreign components which are unavailable in the United States.”
Now California’s law is more closely aligned with Federal Trade Commission’s “Made in the USA” standard, although the state has actually set forth objective standards which will be used to evaluate claims (the FTC continues to evaluate claims on a case-by-case basis without a quantitative standard).
What will peak season mean for ocean freight rates this year?
According to the Journal of Commerce, although carrier rates have been “depressed” for quite a while, the last couple of weeks has seen some spikes in the Asia-Europe trade routes. And carriers have begun to reduce capacity on certain routes, betting that higher demand will justify increased pricing.
But does that ensure higher rates? Hard to say. The world economy, lead by China’s current slowdown, is still sluggish. But, per the JOC, there are many outside factors swirling around this issue:
“Maybe the stock market correction has run its course. Maybe the lower import prices that come with China’s August devaluation of the yuan will stimulate imports. Maybe historically low fuel prices will convince consumers to spend. Maybe the seven-year low in U.S. unemployment rates will do the same. And maybe ocean carriers will reverse the course they’ve taken during the last five years by effectively managing capacity, thereby sustaining rate levels that, along with cost-cutting efforts, staunch the deep losses that, as an industry, they’ve suffered.”
Bottom line: Experts are hedging their bets on whether ocean carrier rates will rise. Stay tuned.
On September 16, 2015, US Customs’ Los Angeles Field Operations Unit will host a trade forum for the importing community on fines, penalties and forfeitures processes and procedures at the Los Angeles/Long Beach seaport complex. Reservations are first come, first served. Details are here: CBP LA Trade Forum on Fines, Penalties & Forfeitures (FP&F) Processes and Procedures.