Port Congestion Surcharge Returns! (November 21, 2014)

As expected, carriers are starting to announce the return of the Port Congestion Surcharge. Carriers postponed the PCS earlier this week due to concern from the FMC. However the carriers are indeed struggling with the congestion at the ports. As long as congestion continues, it is of no surprise that the carriers would try to find a way to implement the PCS.

Here is the latest breakdown from the various carriers and where they currently stand. I have indicated in bold below the carriers that have confirmed the PCS again. Please be careful to distinguish the effective dates and whether they are based on the Gate-In date at the port of origin or whether it is base don the discharge date at the destination port.

I do believe other carriers will soon be jumping back in and assessing the PCS. I will keep everyone updated.

US PORT CONGESTION SURCHARGE 2014 Last update Nov 21 2014
Carrier Applicable on shipment Discharge or Via $20 40′ HQ 45′ Effective Date on/after Remark
APL All US Ports 800 1000 1125 1265 TBA Gate in Date at origin (based on last container gate in date in B/L)
CMA LGB/LAX Ports 800 1000 1000 1266 Suspend the implementation until further notice Discharge Date at USWC Ports
COSCO All US Ports + Canada Ports 800 1000 1125 1266 TBA Discharge Date at Ports
CSCL USWC Ports 800 1000 1125 1266 Postpone until further notice Discharge Date at Ports
EMC USWC Ports 800 1000 1125 1266 21-Dec-14 Discharge Date at USWC Ports
Hamburg USWC Ports 800 1000 1125 N/A Suspend the implementation until further notice Discharge Date at Ports
Hanjin USWC Ports + Canada Ports 800 1000 1125 1266 26-Nov-14 Gate in Date at origin
Hapag Lloyd USWC Ports 800 1000 1125 1266 Postpone until further notice Discharge Date at Ports
Hyundai USWC Ports 800 1000 1125 1266 Postpone until further notice Discharge Date at Ports
K-line All US Ports 800 1000 1125 1270 TBA Gate in Date at origin
Maersk USWC Ports + Canada Ports 800 1000 1125 1266 Postpone until further notice Discharge Date at Ports
Matson USWC Ports 500 500 500 500 3-Dec-14 ETD of the Vessel at Origin
MSC USWC Ports 800 1000 1125 N/A 26-Nov-14 Gate in Date at origin
NYK USWC Ports 800 1000 1000 1000 26-Nov-14 Gate in Date at origin
OOCL USWC Ports + Canada Ports 800 1000 1125 1265 Postpone until further notice Gate in Date at origin
PIL USWC Ports 800 1000 1125 - Postpone until further notice Gate in Date at origin
UASC USWC Ports 800 1000 1125 - Delay the implementation until further notice Discharge Date at Ports
WANHAI USWC Ports 800 1000 1125 1266 24-Dec-14 Discharge Date at Ports

-Jimmy Ting
Great World
t: 650-873-9050 x1019
jimmyting@gwlcorp.com

Port Congestion Surcharge Postponed (Update – November 19, 2014)

As reported late yesterday, carriers began announcing that they were postponing the Port Congestion Surcharge. We received confirmation today from all remaining carriers that had announced a PCS that they would be postponing the fee. The reason for the postponement is apparently due to intensive scrutiny from the FMC. The FMC sent out a notice on November 17th that they would be closely reviewing the application of the PCS.

The fact that the carriers have postponed the PCS gives a brief breather to importers who are now seeing their containers finish arriving at the peak of the shipping season. However importers and exporters should not assume that the PCS has gone away. From reports, carriers seem intent on finding a way to charge the PCS. Carriers are still sustaining losses due to the extreme congestion they are facing at U.S. West Coast ports. Whether it is through a formal PCS or a General Rate Increase, carriers are looking for ways to pass along the added operation cost that has resulted from the port congestion. In fact, two carriers (Matson and Wan Hai) have given specific dates (Dec.3 and Dec.18th respectively) for charging the PCS again. Those dates will apply based on discharge dates at the destination port. I would not be surprised if other carriers follow this lead and announce a PCS to be implemented sometime in mid-December.

In the meantime, terminals continue to operate slowly. One week away from the Thanksgiving holiday, there is no real timeline for improvement.

-Jimmy Ting
Great World
t: 650-873-9050 x1019
email: jimmyting@gwlcorp.com

Port Congestion Surcharge Update (November, 18, 2014)

The situation regarding the Port Congestion Surcharge (PCS) remains fluid and changing on a seemingly daily, if not hourly basis. We received confirmation overnight from carriers (Maersk and MSC) who had as of yesterday not made a decision yet regarding the the PCS that they would indeed begin charging the PCS. This left APL, Cosco, and K-Line as carriers who had not confirmed the PCS. However we also learned today that Evergreen and CMA-CGM would be postponing the PCS. We have also heard that other carriers may consider postponing the PCS as well. We expect to be hearing more updates throughout the next 24 hours and will keep you posted.

Please keep in mind that the congestion at the ports remains an EXTREMELY serious problem. We are seeing delays throughout the USWC ports. Therefore importers/exporters should be conscious of the fact that the PCS could be reinstated at any time.

I did review a letter from the FMC indicating that they are investigating the PCS very closely. It is possible that the FMC is the reason why carriers are announcing the postponement of the PCS. If that is indeed true, we may see carriers look for alternative ways to implement the PCS in the near future.
-Jimmy Ting
Great World
email: jimmyting@great-world.com
tel: 650-873-9050 x1019

Carriers Begin Collecting Port Congestion Surcharge (PCS) as USWC Ports Continue to Teeter Along, November 14, 2014

Carriers Begin Charging Port Congestion Surcharge
As expected, steamship lines have begun announcing that they will begin charging the Port Congestion Surcharge. We received announcements from the following carriers that they will begin charging the PCS for all containers arriving at U.S. West Coast Ports on or after November 17, 2014.

  • Evergreen
  • Hyundai -
  • CMA-CGM
  • Hanjin
  • NYK

The amount of PCS that we are seeing applied to IMPORT containers is currently as follows:

  • $800/20′
  • $1000/40′
  • $1125/40′HQ
  • $1266/45′HQ

The original PCS that most carriers announced gave them the latitude to levy the charge on containers at all U.S. ports. However currently, the announcements we have seen are only applying to West Coast IMPORT containers. We are expecting most of the other carriers to join in and begin collecting the PCS.

For EXPORT containers, thus far we have only seen Evergreen announce a PCS ($240/20′, $300/40′, and $375/45′). I would imagine other carriers might be joining in to announce a PCS on export containers as well.

Current Status of the USWC Ports
The USWC port terminals are open and operating today. Reports have come out that the Teamsters have been striking at six Los Angeles / Long Beach terminals. However thus far, the ILWU has not honored the picket line and have kept the terminals in Southern California open.

In Oakland, all four major terminals are open today. SSA remains a terminal of concern as we have seen the terminal close twice in the past week. Heavy congestion and backlog remain.

The PMA sent out the following message yesterday, critical again of the ILWU’s behavior in recent weeks. With this message, we are seeing a continued escalation of tensions at the USWC ports.

We are still monitoring this situation closely and will provide updates as soon as we receive them.

-Jimmy Ting
Great World
t: 650-873-9050 x1019
email: jimmyting@gwlcorp.com

USWC Terminal Update on the Day After Veterans Day

We expected to see more congestion than normal on the day after Veterans Day. As of 10:55am, we already have our first terminal closure. SSA Terminal in Oakland has shut down for the day due to ILWU labor issues. This is the second time in the past week that the terminal was shut down. As many of you are aware, SSA Terminal in Oakland also shut down last Friday afternoon due to ILWU labor issues.

We have not heard of any closures yet in Los Angeles/Long Beach or Seattle/Tacoma. However we do know that carriers are already limiting or not accepting exports through various terminals due to extreme congestion. Furthermore there was news yesterday of potential trucker demonstrations in Los Angeles/Long Beach ports.

As I mentioned last week, the situation at the ports is extremely tenuous. We know the many reasons for congestion at the ports. However the labor contract negotiation between ILWU and PMA should be taking center stage right now as it threatens to completely shut down USWC ports.

I also wanted to remind importers that the carriers have within their contracts port congestion surcharges that they can assess if there is a shutdown at the ports. The port congestion surcharge for most carriers is listed at $800/20′, $1000/40′, and $1125/40′HQ. We have heard that there carriers are in serious discussion about whether or not to start assessing the surcharge.

-Jimmy Ting
Great World
t: 650-873-9050 x1019
email: jimmyting@gwlcorp.com

USWC Terminals Open and Operating as of This Morning

The good news is that as of 11:20am this morning, USWC terminals are open and operating. Various terminals are still experiencing congestion. However, no longshoremen have walked off the job. That is the good news. The situation is still tenuous.

Tomorrow is Veteran’s Day. The terminals, for the most part, will NOT be operating as most carriers have not selected to pay to keep the terminals open on the holiday. There are a few select terminals that will be open for select carrier business.

I will keep everyone updated.

-Jimmy Ting
Great World
t: 650-873-9050 x.1019
email: jimmyting@gwlcorp.com

Crisis at West Coast Ports

BREAKING NEWS Update: 5pm, November 7, 2014

Los Angeles / Long Beach – 4 of 11 terminals shut down today due to ILWU walkout

Oakland – SSA Terminal shut down today at 2pm due to ILWU walkout

I would be surprised to see longshoremen working on Monday. Let’s keep our fingers crossed and hope for the best.

_____________________________________________

For months now, importers and exporters at U.S. West Coast ports have been dealing with massive congestion that has only gotten worse during the peak season. There are quite a few articles written recently detailing the numerous contributing factors that have led to the current logjam at the ports. Of these factors, the one that now threatens to tip the ports from massive congestion to complete standstill is the ILWU – PMA contract stand-off.

The ILWU has been working without a contract since July 2014. The ILWU and PMA have maintained press silence since that time. However the PMA broke the silence when they announced earlier this week that the ILWU was purposely slowing down productivity in the Pacific Northwest ports (Seattle / Tacoma). This slowdown purportedly began last weekend.

What is more dangerous, if what we are hearing is true, is that similar slowdown tactics have spread to Los Angeles / Long Beach terminals in recent days. Los Angeles / Long Beach terminals are already on the verge of collapsing under the weight of all the containers they are trying to process. We already have seen regular vessel delays in Los Angeles of at least a few days for each vessel.

The greatest fear right now is that if the slowdown does spread, the PMA and terminal operators may feel that they have no alternative but to lock out the ILWU. This would lead to a disastrous port shutdown, similar to the one experienced in 2002.

Importers and exporters are advised to ship with extreme caution and understanding of the fragility of the current situation at the U.S. West Coast ports. Those who have the option to ship via other ports would be wise to begin doing so until this current unrest settles.

The situation is one that may be changing daily. I will keep everyone updated. Let’s keep our fingers crossed and hope for the best.

-Jimmy Ting
Great World
t: 650-873-9050 x1019
email: jimmyting@gwlcorp.com

Time to Re-register Your Food Facilities With FDA

For those who import food products, it is time to re-register your food facilities with FDA. Starting in 2012, companies were required to re-register their food facilities with FDA on a biennial basis. The re-registration period is from October 1 through December 31 of each even-numbered year.

Re-registration can be down via the FDA Food Facility Registration website. Please note that “renewing” your registration is different from “updating” your registration. If you recently “updated” your registration, you still need to go into the FDA Food Facility Registration website to “renew” your registration.

Remember that the FDA Food Facility re-registration requirement applies to both food importers as well as their overseas manufacturers. Please remind your food manufacturers to renew their FDA Food Facility registration before the end of the year. As your food manufacturers go through the renewal process, please also be aware of the U.S. Agent appointment process. Domestic food facilities are not required to appoint a U.S. Agent. However foreign food facilities are required to appoint a U.S. agent. It is extremely important for U.S. Agents to remember that under the FDA Food Safety Modernization Act (FSMA), the U.S. agent is responsible for paying for any FDA re-inspections of foreign food facilities. FDA’s fees are not cheap. FDA will be billing for foreign travel at a rate of $305 per hour. Therefore I would HIGHLY recommend that U.S. food facilities think twice before accepting responsibility to be the U.S. Agent for foreign food manufacturers.

Food facilities have until the end of this year to get re-registered. Please do not waste time and get your re-registration completed early to avoid being denied import privileges by FDA.

Let me know if you have any questions.

-Jimmy Ting

GWL Corp

Great World Customs Service

jimmyting@gwlcorp.com

tel# 650-873-9050 x1019

Update on the Solar Panel AD & CVD Landscape in the United States

A lot has happened in the past few months to make the solar panel AD & CVD landscape even more convoluted. I’ve created a diagram to help illustrate what I believe to be the current situation regarding AD and CVD duties on solar panels.

SolarPanelAD&CVD_Diagram

There are a couple of flavors of solar panels that may be imported and depending on the details, may be subject to AD and/or CVD.

1.) Solar panels manufactured in China using Chinese solar cells are covered under A-570-979.

2.) Solar panels manufactured in anywhere (including China) using Taiwanese solar cells are covered under A-583-853.

3.) Solar panels manufactured in China using solar cells that have their essential material background in China (example: ingots and / or wafers) fall under a new AD & CVD case (A-570-010 and C-570-010).

4.) Solar panels manufactured in China using solar cells that are completely of origin other than China or Taiwan are currently excluded outside the scope of any of the cases mentioned above. HOWEVER, it is the importer’s responsibility to be able to prove that the solar cells are completely made in a country other than China or Taiwan. Most recently, Customs has begun requesting documents and information such as the following:

  • Name and address of the actual manufacturer of the solar panels
  • Country of origin of the solar cells
  • Production records / bill of materials related to the manufacture of the goods (including solar cells)
  • Manufacturer purchase invoices related to the materials incorporated into the goods with particular focus on the cells incorporated into the goods,
  • Cell lot number(s)
  • Cell manufacturing date
  • Plant location of the cells
  • Serial numbers for the cells
  • Cell specification sheets including cell physical dimension and cell material type
  • Purchase orders and contracts
  • Certificate of Origin for the solar cells

The AD & CVD landscape may be changing even further as the DOC looks into possibly closing loophole#4 mentioned above.

Feel free to contact me with questions.

 

-Jimmy Ting

Great World Customs Service

jimmyting@gwlcorp.com

t: 650-873-9050 x1019

 

 

ILWU Contract Negotiation Update, July 2, 2014

The ILWU contract expired on June 30th and thus far we have not seen any major labor action. The ILWU and PMA issued a joint statement yesterday indicating their intention to continue keeping cargo moving until a new agreement can be reached.

If you have any questions, feel free to contact me.

Jimmy Ting
jimmyting@gwlcorp.com