Month: September 2012

FDA- Multiple Locations and Medical Establishment Registration

Now that FDA has indicated that they will be charging importers for Establishment Registration, some importers have asked me to clarify whether they need to register each and every facility that receives goods. For example, the importer may have a head office in Chicago and satellite distribution offices in Seattle, Oakland, Los Angeles, Dallas, Chicago, New York and Miami. If each satellite office had to register as a distinct Establishment, the importer would potentially have to pay the registration fee ($2575 starting October 1, 2012) SEVEN times. If the importer has even more offices throughout the United States, the registration costs could end up being quite onerous.

I contacted FDA’s Establishment Registration email address (they responded surprisingly quickly) and was initially told that yes, each facility would need to register for a separate Establishment number. I then asked how an importer should declare their Establishment for a shipment that was sent on a “direct-ship-to-customer model” where a shipment bypasses the importer’s distribution warehouses entirely. As the importing community is well aware, one of the best ways to reduce cost is to be able to directly ship goods from the manufacturer to the end customer, thereby reducing warehousing costs along the way. This question stumped the FDA Registration clerks. The question was elevated, and I received a very quick response from someone higher up in FDA. They clarified the following:

  • If the importer has one head office and multiple branch offices that receive goods, they only need to register the Establishment of the head office.
  • The shipping documents at the time of import should clearly indicate the head office’s name with Establishment registration information clearly listed on the paperwork.
  • The shipping documents can then indicate a delivery address that is different from the head office that has the Establishment registration.

This information was of great relief to my importers of medical devices. I would like to applaud FDA and their quick response to my questions.

Feel free to contact me if you have any questions.

-Jimmy Ting

jimmyting@great-world.com

New Requirements for FDA Medical Device Establishment Registration and Listing

As I mentioned in a previous blog, FDA is updating their requirements for Medical Device Establishment Registration and Listings. The changes begin in four days, starting October 1, 2012. The two biggest changes that I initially noted were as follows:

  1. ALL establishments (including initial distributors / initial importers) will need to start paying the registration fee. In the past, initial distributors/importers were exempt from paying the registration fee.
  2. The registration fee will be increasing from $2029 to $2575.

One thing I forgot to make note of was another new requirement for initial distributors/importers. They must now “Identify manufacturers of products being imported. This may be done by listing number or searching and identifying the manufacturer in FURLS.”

The official response from FDA’s FAQ page on the new requirements has this blurb about identifying the manufacturer:

16. As an initial distributor/importer who is now required to provide the manufacturer information for devices I will be importing, must I update this information in FURLS as new firms are added or I decide not to distribute for a particular manufacturer?

FDA recommends that importers keep their manufacturer information current at all times. Failure to keep your information current may lead to your device undergoing manual review when imported, which may slow importation of your device.

We all know how bogged down and slow FDA’s response has become over the last few years. Most FDA offices are way underfunded and overworked. One thing that FDA continues to repeat to the importing community is that the best way to help them speed up the process is by making sure all the information provided to them is up-to-date. Keeping manufacturer information up to date on FURLS is just one such action that every importer should be taking.

-Jimmy Ting

jimmyting@great-world.com

90 Day Extension on Labor Negotiations at East Coast Ports!!!

I’m sure many of you have already heard the good news that the collective bargaining agreement between the longshormen on the East Coast (ILA) and the East & Gulf coast port terminals received an 90 day extension. The original contract was set to expire on September 30, 2012. The extension allows for negotiations to continue through December 29, 2012 without any work stoppage. You can read the formal statement from the Federal Mediation and Conciliation Service on the following website: http://fmcs.gov/assets/files/Public%20Affairs/2012%20Documents/AA_USMX-ILA_Release_Draft-_9-20-12.pdf

In the meantime, the question to ask is “what does this mean for the shipping community?” Let’s start off with the obvious.

  • Anyone with shipments going to East and Gulf Coast ports can immediately start booking their containers with all-water vessels. Rates on all-water vessels were at a slight discount the last few weeks due to a decrease in demand as importers shifted their bookings to West Coast + Rail service. If you move fast enough, you might still be able to take advantage of some discounts.
  • Importers who were holding off on shipping for fear of having to pay the Port Congestion Surcharge get a temporary reprieve and should start shipping their containers immediately.

There is no crystal ball that can help determine whether a labor negotiations will succeed or fail in the next three months. The message from the FMCS seemed to imply that there was “progress” made in the negotiations. However these negotiations could easily go south. I would therefore take a worst-case scenario approach to planning. Which leads to the less obvious action importers should be taking. If importers are able to forecast in advance, try to push forward the shipping of goods to arrive prior to the end of December. From talking to various importers, this may or may not be possible for various reasons ranging from capital to production time to warehouse space. Importers do not want to be facing a situation where they have shipments on the water and a strike actually takes place on December 30, 2012.

I will continue to keep you updated.

-Jimmy Ting

jimmyting@great-world.com

Still no new contract for Longshoremen working the East Coast.

As of this afternoon, the ILA and the East Coast & Gulf ports still do not have a new contract. We are coming down to the wire with eleven days left before the current contract expires.

We have already seen importers reroute their goods to the West Coast. This rerouting on top of the October 1st holiday in China could lead to extra congestion on vessels coming to the West Coast.

We also are continuing to receive reports from truckers on the East Coast that various terminals are “slowing down” productivity. Truckers are unable to pick up as many containers at the terminals in a single day as they were prior to the “slow down”.

-Jimmy Ting

jimmyting@great-world.com

Update on East Coast Port Labor Dispute – Worker Slowdown

As of today, September 11, 2012, there is still no contract for the longshoremen on the East and Gulf ports. I have read that Federal mediators are trying to restart the contract talks.

One lesson that we learned from the 2003 West Coast strike was that the longshoremen have another tool they can use (besides a strike) to show their displeasure. In previous cases of longshoremen discontent, they have initiated “slowdowns” at the port. We have seen this happen numerous times. The “slowdown” is framed through the rhetoric of following all safety rules. The result is a dramatic loss of efficiency at the ports. This applies both to the unloading of containers off vessels as well as making the containers available for pick up. Truckers have taken twice as long (or even longer) to pick up containers.

From news that we are receiving from truckers in New York this morning, we are already starting to see “slowdowns” take place at the very least at the ports in New York/New Jersey.

Jimmy Ting

jimmyting@great-world.com

Port Congestion Surcharge – update 9/7/2012

I have no positive news on labor dispute between the longshoremen and the East Coast ports. I am surprised that the potential strike hasn’t made more headlines and isn’t getting the attention of our Federal government. Even a “short” one to two week strike could have huge implications on our national economy, especially during the peak shipping season.

More carriers have filed a Port Congestion Surcharge in case of a labor dispute. Here is the latest that we have seen:

Carrier Item

20′

40′

40’HC

45’HC

APL Congestion Surcharge

$320

$400

$450

$505

ANL/US Line Port Congestion Surcharge

$800

$1,000

$1,125

$1,266

CMA Port Congestion Surcharge

$800

$1,000

$1,125

$1,266

CSCL Port Congestion Surcharge

$800

$1,000

$1,125

$1,266

ZIM Port Congestion Surcharge

$800

$1,000

$1,125

$1,266

UASC Port Congestion Surcharge

$800

$1,000

$1,125

n/a

Maersk Congestion Surcharge

$800

$1,000

$1,125

$1,266

Cosco Congestion Surcharge

$800

$1,000

$1,125

$1,266

EMC Congestion Charge At POD

$800

$1,000

$1,125

$1,266

NYK Port Congestion Surcharge

$1,000

$1,000

$1,000

$1,000

Hanjin Port Congestion Surcharge

$800

$1,000

$1,125

$1,266

K Line Congestion Surcharge

$800

$1,000

$1,125

$1,266

YML Port Congestion Charge

$800

$1,000

$1,125

$1,266

HMM Port Congestion Surcharge

$1,000

$1,000

$1,000

$1,000

Hamburg Sud Port Congestion Surcharge

$800

$1,000

$1,000

n/a

Matson Port Congestion Surcharge

$500

$500

$500

$500

Please keep in mind that the surcharge will only take effect in the event that a labor related slowdown/stoppage occurs (strike / lockout / etc.).

We are seeing more importers change their all-water US East Coast bookings to the US West Coast. This has resulted in increasing congestion on vessels coming to the US West Coast.

-Jimmy Ting

jimmyting@great-world.com

 

Port Congestion Surcharge Filings for US Inbound/Outbound Containers

As mentioned in my previous blog, the East Coast ports are in the midst of a labor dispute. With the longshoremen’s contract set to expire on September 30, 2012, many in the shipping community are bracing themselves for a strike.

Many carriers have announced Port Congestion Surcharges (PCS) to be implemented only if a labor dispute does affect operations at the ports. Here is a list of the surcharges that we have seen carriers file thus far:

Carrier Item

20′

40′

40’HC

45’HC

UASC Port Congestion Surcharge

$800

$1,000

$1,125

n/a

Maersk Congestion Surcharge

$800

$1,000

$1,125

$1,266

Cosco Congestion Surcharge

$800

$1,000

$1,125

$1,266

EMC Congestion Charge At POD

$800

$1,000

$1,125

$1,266

NYK Port Congestion Surcharge

$1,000

$1,000

$1,000

$1,000

Hanjin Port Congestion Surcharge

$800

$1,000

$1,125

$1,266

K Line Congestion Surcharge

$800

$1,000

$1,125

$1,266

YML Port Congestion Charge

$800

$1,000

$1,125

$1,266

HMM Port Congestion Surcharge

$1,000

$1,000

$1,000

$1,000

Matson Port Congestion Surcharge

$500

$500

$500

$500

What many in the shipping community may not be aware of is that the way the PCS was filed by many carriers, it sounds like the surcharge may be applicable to ALL US inbound and outbound cargo if a port-strike occurs. My initial thought when I first heard about the PCS was that it would be applicable only to US East Coast containers that were passing through the US East Coast ports. However if I am reading the PCS correctly, the carriers will charge the PCS to containers passing through all US ports (West Coast included). This makes some sense as we have already seen various customers begin to divert their US East Coast containers away from all-water service to East Coast Ports. They have begun to book these containers via rail service through the US West Coast. In the likelihood of a port strike, there is bound to be congestion on the West Coast.

Importers and exporters alike should be preparing themselves for the likelihood of the strike as well as the resulting surcharge.

-Jimmy Ting

jimmyting@great-world.com