Freight Market Update: May 13, 2020
Ocean and air freight rates and trends; customs and trade industry news for the week of May 13, 2020.
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Ocean Freight Market Update
Air Freight Market Update
Freight Market News
Seafarers Stuck at Sea or Jobless As travel restrictions trap thousands of seafarers on cargo ships or in port cities far from their homes or next jobs, another contingent is landbound. Those at sea are overworked to exhaustion, while those on land are unemployed, according to the WSJ. The International Maritime Organization has called for governments to declare seafarers essential and allow them to travel.
Oil Storage Panic Subsides A worldwide oil glut and storage shortage is slowly improving thanks to combined efforts, including intense negotiations to reduce output and creative storage solutions like rail cars as receptacles, reports Bloomberg. Saudi Arabia agreed on May 11 to additional output cuts.
Meanwhile, this week, Flexport Chief Economist Dr. Phil Levy noted the following economic highlights:
- A Chinese export increase comes as a surprise, after forecasts that exports would shrink sharply. Instead, Chinese exports were up 3.5% in April over a year earlier. Imports fell 14.2% year-over-year, more than expected. The report followed weak March numbers, and Chinese trade is down 7.5% year-to-date, with exports falling more than imports.
- US trade contracted in March. Exports fell by $20 bn vs. February (9.6%) while imports dropped $15.4 bn (6.2%). The biggest import decreases were in consumer goods and automotive. Capital goods imports rose.
- IMF offers a grim outlook as its Managing Director says global economic numbers are coming in below a pessimistic World Economic Outlook forecast released in April.
- The Bank of England forecasts its worst slump since 1706.
Customs and Trade Updates
Section 301 List 4 Product Exclusions Granted
The USTR issued a new list of product exclusions for the fourth tranche of Section 301 tariffs on goods from China. There were three full HTS numbers listed along with five specifically prepared product descriptions. These exclusions granted will apply retroactively to the September 1, 2019 implementation date and stay in effect until September 1, 2020.
Updates to Section 301 List 3 Product Exclusions
The USTR also put out two additional notices which corrected previous exclusions. The first notice modified the language stated in US note 20(q)(184) & US note 20(q)(228) from the first tranche of tariffs. The second notice modified the language in US notes 20(v)(2), 20(v)(8), 20(v)(78), and 20(y)(83) from the second tranche of tariffs.
Free Trade Agreements
To assist with the trade agreement entering into force on July 1, CBP is launching a "USMCA Center" with experts from operational, legal, audit disciplines, and representatives from Canadian and Mexican customs. The center is the "cornerstone of CBP’s USMCA implementation plan and will serve as a central communication hub for CBP and the private sector community, including traders, brokers, freight forwarders, and producers.”
US-UK Trade Talks Officially Begin
A press release from the USTR stated that the US and UK have had formal talks about a trade agreement between the two countries. Due to the pandemic, many of the initial meetings over the next couple of weeks will be held virtually. Also, a release from the US Chamber of Commerce stated how it would like to see the deal structured.
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.