Market Update

Freight Market Update: October 30, 2019

Ocean and air freight rates and trends; customs and trade industry news for the week of October 30, 2019.


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Freight Market News

Tariff Avoidance Puts New Spin on Boxed Wine A Florida company that imports French wine has found a way to avoid the 25% levy that went into effect last week as part of the Airbus vs Boeing trade battle. As NPR reports, the new tariffs apply to wine in bottles of 2 liters or less. To get around the tariffs, the company is importing wine in large shipping containers that are lined with giant pouches to hold the liquid. From there, it bottles the wine at its Florida-based plant.

Finding Good Last-Mile Warehouse: Easier Said than Done FreightWaves reports that when it comes to many urban locations, finding a good warehouse can be challenging. Part of the reason, they say: “Urban neighborhoods are populated with older buildings that are not designed for super fast-cycle sortation and delivery.” In addition, the article references a study by real estate services firm JLL, which cites another problem with older buildings: Clear heights of fewer than 20 feet don’t support today’s vertical racking systems needed for e-commerce. Add to that the fact that new construction in many cities is limited due to space constraints and the problem becomes even thornier.

Customs and Trade Updates

More Section 301 List 3 Exclusions Granted The USTR posted more granted exclusions to 83 specific HTS numbers with detailed product specifications. These Chinese products will have the additional 25% Section 301 duties cut down to 0%. Just like the other exclusion lists, the exemption can be applied retroactively to the September 24, 2018 implementation date, remaining in effect until September 24, 2019.

First Section 301 Exclusion List Extension Under Review The first of multiple lists of exclusions for Section 301 List 1 was granted on December 28, 2018—and is soon coming up on its one-year term. With that, the USTR is now seeking comments on extending those first granted exclusions for another exclusion of up to another 12 months. The notice states that the exclusions will be dealt with on a case-by-case basis, similar to how the original requests were submitted and reviewed. The USTR will be accepting submissions from November 1-30.

GSP Announced Changes Changes to the Generalized System of Preferences (GSP) program were recently announced by the USTR. Most notable for importers is the removal of nearly a third of the products that Thailand had GSP privileges on. The action comes as a result of its failure to address labor rights issues during the past six years. Ukraine, meanwhile, will regain eligibility on some items for passing new legislation that toughens laws around Intellectual Property (IP) protection.

For a roundup of tariff-related news, read our Tariff Insider.

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