Freight Market Update: June 24, 2020
Ocean and air freight rates and trends; customs and trade industry news plus COVID-19 impacts for the week of June 24, 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.
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Ocean Freight Market Update
Air Freight Market Update
Freight Market News
Warehouse Demand Rises YOY Demand for warehouses of 100,000 square feet or more is up by 2.8% over this time last year. The Wall Street Journal points to a fundamental change after the initial scare of COVID-19: Consumers are likely to keep ordering groceries and other essentials online, as retailers and grocers pad inventory in case of future sales surges.
Air Stabilizes as Supply Chain Shifts Airfreight rates appear to have finally descended from elevated levels caused by loss of passenger bellies and urgent demand for PPE. FreightWaves reports that planes are now full of home renovation or outdoor recreation goods.
EU Funds 5G Logistics Study A 28-member consortium of government and private institutions, including the European Union, is funding research into the use of 5G technology to remotely steer trucks and vessels. The three-year study starts in September 2020 between the North Sea and Antwerp ports, according to The Maritime Executive, with a goal of creating a blueprint for global application.
Meanwhile, this week, Flexport Chief Economist Dr. Phil Levy noted the following economic highlights:
- US data rebounds. Retail sales and several additional measures showed some improvement in the US economy. The Conference Board’s Leading Economic Indicators rose 2.8% in May, after declines of 6.1% in April and 7.5% in March.
- Japanese exports fell by 28.3% in the year to May, the largest drop since September 2009. US-bound exports halved, due to a drop of more than 70% in automotive.
- The FDI is expected to fall as the UN Conference on Trade and Development (UNCTAD) predicts that global Foreign Direct Investment flows would fall 40% in 2020. FDI can drive subsequent trade flows.
Customs and Trade Updates
New Exclusion Granted to Section 301 List 3 CBP announced an exclusion to motorboats that were subject to the Section 301 duties on List 3 goods from China. This exclusion will fall under an already created subheading 9903.88.48. It applies retroactively to the September 28, 2018 implementation date and will remain in effect until August 7, 2020.
Remote COAC Meeting on July 15 CBP published a Federal Register notice stating the next meeting with the Commercial Customs Operations Advisory Committee will be held virtually on July 15. Comments are due by July 14. The COAC will hear from numerous sub-committees and working groups including: USMCA, IPR, Forced Labor, Trusted Trader, AD/CV, Bond, In-Bond, Cargo Processing, Emerging Technologies, and the Next Generation Facilitation.
Civil Monetary Penalty Increases On June 17, the Department of Homeland Security updated their civil monetary penalty amounts to adjust for inflation. The new penalty amounts will be effective for any penalty assessed after June 17, 2020 on violations that occurred after November 2, 2015.
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.