Freight Market Update: July 15, 2020
Ocean and air freight rates and trends; customs and trade industry news plus COVID-19 impacts for the week of July 15, 2020.
How will demand recover from COVID-19? And how can you ensure your cargo is moving to keep up with it? Visit Flexport’s COVID-19 Trade Insights for information and analysis.
Want to receive our weekly Market Update via email? Subscribe here.
Ocean Freight Market Update
Air Freight Market Update
Freight Market News
House Introduces Maritime Relief Bill Two US representatives submitted the Maritime Transportation System Emergency Relief Act last Thursday. The Maritime Executive reports the bill would provide funds to ports and other maritime supply chain stakeholders to help with payroll, debt payments, repair costs, cleaning, and PPE.
Borders Open for Seafarers The US and 12 other countries have recognized seafarers as essential personnel, ending months of contract extensions caused by COVID-19 border restrictions and allowing hundreds of thousands of seafarers to finally come ashore. The Wall Street Journal notes China has not joined the agreement, but most Asia crew changes occur in Singapore or Dubai.
IATA Pushes for Sustainable Air Fuel Transportation Today reports that The International Air Transport Association is advocating for an investment of private funds and government stimulus in sustainable aviation fuel (SAF), noting the potential of an energy transition as an economic-recovery driver after COVID-19.
Meanwhile, this week, Flexport Chief Economist Dr. Phil Levy noted the following economic highlights:
- Weekly jobless claims were 1.314m, the 15th consecutive week above 1m.
- Bankruptcies and layoffs have been accumulating at a rapid pace. Chapter 11 bankruptcy filings were up 26% in the first half of 2020. United Airlines warned of 36k potential layoffs within months.
- State and local governments will face serious budget pressures, potentially inducing layoffs.
Customs and Trade Updates
USTR Announces Section 301 Tariffs on French Handbags, Cosmetics & Soaps
The USTR released a notice that they will impose a 25% Section 301 tariff on French cosmetics, handbags, and soaps starting on January 6, 2021 in response to the Digital Service Tax (DST) France imposed on the US earlier this year. After a comprehensive investigation of the DST, the USTR concluded that the tax was unfairly targeted at US tech companies.
100 Section 301 Exemptions to Tranche 1 Expire
On July 9, 100 Section 301 tariff exclusions from the first tranche expired, and only 12 were granted extensions. The extended exemptions will last until the end of 2020.
APHIS Extends Acceptance of Forms Electronically
In a CSMS Message, APHIS announced that, due to the pandemic, they will continue to accept PPQ and phytosanitary certificates electronically until September 30, 2020. Importers can upload them directly into ACE via DIS.
For a roundup of tariff-related news, visit Tariff Insider.
Please note that the information in our publications is compiled from a variety of sources based on the information we have to date. This information is provided to our community for informational purposes only, and we do not accept any liability or responsibility for reliance on the information contained herein.