The World Customs Organization (WCO) has published the agreed amendments to the Harmonized System (HS) nomenclature.  These amendments will go into effect on January 1, 2012.  Environmental and social issues of global concern are the main catalyst for the HS 2012 amendments.

Importers should start preparing now for the implementation of these new changes to ensure compliance on January 1st.

The proposed WCO amendments can be found at: http://www.wcoomd.org/files/1.%20Public%20files/PDFandDocuments/HarmonizedSystem/HS%20Overview/NG0163B1.pdf

For a copy of WCO’s correlation tables for the 2007 and 2012 versions of the HS can be found at: http://www.wcoomd.org/files/1.%20Public%20files/PDFandDocuments/HarmonizedSystem/tools_instruments/HS_Correlation_Tables_Introduction.pdf

The Animal and Plant Health Inspection Service (APHIS) has issued an updated Federal Order (DA-2011-28) regarding Canadian firewood. This Federal Order replaces DA-2008-69, which was issued on October 17, 2008.

All imported Canadian firewood, including softwood firewood, and spruce logs imported from Nova Scotia, now require heat treatment. Both commercial and non-commercial importations are subject to the treatment and certification requirements.

These new measures are being implemented to prevent the entry of certain pests into the United States and went into effect May 22, 2011.

For complete details, the Federal Order can be found at: http://www.aphis.usda.gov/newsroom/hot_issues/firewood/downloads/FederalOrderCanadaFirewood.pdf

The US Department of Agriculture (USDA) announced that domestic manufacturers and softwood lumber importers voted to approve the creation of a softwood lumber research and promotion program. USDA’s Agricultural Marketing Service (AMS) held a referendum from May 23 through June 10, 2011 to determine whether to implement the Softwood Lumber Research Promotion, Consumer Education and Industry Information Order.

As previously mentioned in a Deringer Trade Alert, An assessment of $0.35 per thousand board feet, collected by US Customs, will be required on imported softwood lumber classified in chapter 44 of the Harmonized Tariff Schedule of the US. The fee will apply to both domestic and imported softwood lumber shipments. Exceptions include:

• Manufacturers who domestically ship or import less than 15 million board feet during a fiscal year would be able to apply for a certificate of exemption prior to the start of the fiscal year.
• Manufacturers who domestically ship or import more than 15 million board feet during a fiscal year would pay the assessment on the first 15 million board feet, but then would be able to apply for a refund on the monies paid on the first 15 million board feet.
• Shipments of softwood lumber by domestic manufacturers to locations outside the US would be exempt.
• Domestic manufacturers who only make and ship softwood lumber that is eligible to be labeled as 100% organic, under the National Organic Program, would be exempt after they apply for exemption from the board.

The AMS press release can be found here.

The Federal Register is available here.

As more information becomes available, Deringer will provide updates.

The Senate Committee on Commerce, Science, and Transportation recently recommended the Commercial Seafood Consumer Protection Act (S.50) be referred to the Senate.

The intent of this bill is to strengthen the Federal consumer protection programs to ensure that commercially distributed seafood in the U.S. meets the food quality and safety requirements of applicable Federal laws.  The agreements would strengthen interagency cooperation on seafood safety, seafood labeling, and seafood fraud.   Highlights of the proposed bill include:

• Cooperative arrangements for examining and testing seafood imports.
• Inspections of foreign facilities.
• Standardizing data on seafood names, inspection records, and laboratory testing
• Collection, storage, analysis, and dissemination of all applicable information, intelligence, and data related to the importation, exportation, transportation, sale, harvest, processing, or trade of seafood in order to detect and investigate violations.
• Expediting imports of seafood into the U.S. from foreign countries and exporters that consistently adhere to the highest standards for ensuring seafood safety.
• Enhancing labeling requirements and methods of assuring compliance with such requirements to clearly identify species and prevent fraudulent practices.
• Sharing of information concerning observed non-compliance with U.S. seafood requirements domestically and in foreign countries and new regulatory decisions and policies that may affect regulatory outcomes.
• Sharing, to the maximum extent allowable by law, all applicable information, intelligence, and data related to the importation, exportation, transportation, sale, harvest, processing, or trade of seafood in order to detect and investigate violations under applicable Federal laws, or otherwise to carry out the provisions of this Act.
• Outreach to private testing laboratories, seafood industries, and the public on Federal efforts to enhance seafood safety and labeling and information on how these entities can work with appropriate Federal agencies to enhance and improve seafood inspection and assist in detecting and preventing seafood fraud and mislabeling.

Also included in this bill is the requirement for annual reporting on the implantation of the agreements.  In addition to these reporting requirements, the Secretary and the Chairman of the Federal Trade Commission (FTC) shall submit a joint report to Congress on consumer protection and enforcement efforts with respect to seafood marketing and labeling in the U.S.  Furthermore, the National Oceanic and Atmospheric Administration (NOAA) shall report deceptive seafood marketing and fraud to the FTC.

For complete details, this bill can be found at: http://www.govtrack.us/congress/bill.xpd?bill=s112-50

It is important to note that this Act is not law.  To become law, the House and Senate must pass the same version and then the President must sign it into law.  Deringer will provide updates as they occur. 

The 2011 U.S. Harmonized Tariff Schedule (HTS) was recently updated.  This update included 676 ABI records and 134 harmonized tariff records. Also included in the update are the modifications for the dairy import assessment, which will become effective August 1, 2011.

For complete details, the HTS can be found on the International Trade Commission’s website: http://www.usitc.gov/tata/hts/bychapter/index.htm

The Lacey Act was amended by the Food, Conservation and Energy Act of 2008 to require importers to submit a declaration at the time of importation for certain plants and plant products.  It makes it unlawful to import, export, transport, sell, receive, acquire, or purchase any plant or plant product taken in violation of a US state or any foreign law that protects plants to help curb illegal forestry throughout the world.  Declarations became effective on December 15, 2008 and since then issues have surfaced with declaring some of the required information.   

The US Department of Agriculture’s Animal and Plant Health Inspection Service (APHIS) has recognized that revisions to the Lacey Act declaration form should be made in order to improve its effectiveness and remove unnecessary burdens on the trade community.  APHIS is requesting public comments by August 29, 2011 on the following issues.  

• Whether an exception from the declaration requirements for products containing small amounts of plant material could be developed that would be less burdensome while still carrying out the intent of the Lace Act amendments.
• How importers may comply with the declaration requirement when importing composite plant products when the genus, species, and country of harvest of some or all of the plant material is very difficult or prohibitively expensive to determine.  
• How to accommodate products made of re-used plant products, or plant materials harvested or manufactured before the 2008 Lacey Act amendments, and for which identifying country of harvest, and possibly species, would be difficult if not impossible.
• Whether to revise the import declaration to substitute a new term, “harvest location”, for the term “country of harvest”, which experience has indicated is so similar to the Customs term “country of origin” as to be confusing.  
• Whether groups of species commonly used in commercial production, could be given a separate name that could be entered on the declaration form as a type of shorthand identification of genus and species, such as the currently recognized “SPF” acronym for “spruce, pine, and fir.”

To submit comments and view the APHIS advanced notice of proposed rulemaking, please visit: http://www.regulations.gov/#!documentDetail;D=APHIS-2010-0129-0001   

Effective July 1, 2011, the 10% export charge levied on softwood lumber products originating from Option B regions of Canada will be terminated.  Option B regions include Quebec, Ontario, Manitoba, and Saskatchewan.  A refund process is available to reimburse overpayments of this charge.

The export charge was originally ordered in 2009 when the London Court of International Arbitration (LCIA), ruling in favor of the United States, determined that Canada did not properly apply the adjustment factor as ordered by the Softwood Lumber Agreement.  The breach of Agreement took place during the first six months of 2007.  The LCIA imposed the 10% export charge on softwood lumber products from this region until the remedy amount was collected.  The Canada Revenue Agency (CRA) has determined that the full remedy amount of C$68.26 million has been satisfied.

The CRA will determine the amount of export charge overpayments and provide refunds to exporters based on their pro-rata share of the overpayment per month.  Exporters will not be required to file a refund application.

The Canada Revenue Agency announcement regarding the export charge termination can be found in the softwood lumber product notice SWLN39 on their website.

The Food and Drug Administration (FDA) is seeking comments about preventive controls and other practices used by facilities to identify and address hazards associated with specific types of food and specific processes.  FDA will use the information in the development (where appropriate) of guidance required by the Food Safety Modernization Act (FSMA) on preventive controls for facilities that manufacture, process, pack, or hold human food or animal food/feed.   

The FDA is seeking input on the following categories with respect to human food or animal food/feed:

• Conducting a hazard analysis to determine the hazards associated with specific human food or animal food/feed and processes (e.g., the procedures used to determine potential hazards and to assess whether they are reasonably likely to occur.  
• Implementing process controls (e.g., processes employed to prevent, eliminate, or reduce to acceptable levels the occurrence of any hazards that are reasonable likely to occur).
• Validating food/feed safety controls (e.g., information on procedures used to determine that control measures are capable of controlling the identified hazards).
• Implementing sanitation controls (e.g., procedures and practices utilized to minimize the risk of contamination) for human food and animal food/feed.
• Implementing supplier controls. (e.g., procedures and practices used to ensure raw materials and ingredients are safe for their intended use).
• Allergen control (human food) including procedures to ensure that ingredients are accurately declared on the label, procedures to ensure the proper label is applied to the food, and procedures and practices to prevent the unintentional incorporation of a major food allergen into a food by cross contact during manufacturing, processing, and holding food.  
• Environmental monitoring for Salmonella and for Listeria monocytogenes for specific types of food facilities (e.g., ready-to-eat food facilities, pet food facilities).
• Microbiological and other testing used to ensure the safety of specific human food and animal food/feed.
• Specific biological, chemical, radiological, and physical hazards and controls for food types such as spices, nuts, ready-to-eat food, bakery products, fresh-cut produce, milk products, and medical food.
• Specific biological, chemical, radiological, and physical hazards and controls for animal food/feed including feed ingredients.  
• Preventive control approaches and practices (e.g., for validation, supplier controls) that are practical for small and very small businesses to implement.  

To submit a comment, please visit: http://www.regulations.gov/#!submitComment;D=FDA-2011-N-0238-0001

Deringer will continue to keep customers abreast of new rules enacted under the FSMA.  Recent changes resulting from FSMA, frequently asked questions, and other information are available on the new FSMA web page of FDA’s website.  Previously submitted comments can be viewed online.

On July 13, US Customs and Border Protection (CBP) released a Cargo Systems Messaging Service (CSMS) announcement announcing that new Importer Security Filing (ISF) capabilities were deployed via the Automated Commercial Environment (ACE).  Importers now have access to the ISF progress reports through ACE, which up until now have only been available via email.  Additionally, importers who file 12 or fewer ISF transactions per year are now able to file and track their ISF transactions directly through the ACE portal, without the need to file via the Electronic Data Interchange (EDI).

 ACE will continue to deliver additional ISF capabilities later in 2011, including the capability to query the status of an ISF transaction by transaction number and by bill of lading.  Additionally, Tier 3 C-TPAT members will be able to query individual ISF transactions.

The CSMS can be viewed here

The Food and Drug Administration (FDA) recently released guidance to the industry on when a premarket safety notification for a dietary supplement containing a new dietary ingredient (NDI) is necessary and in preparing premarket safety notifications (also known as NDI notifications). In a question and answer format the document addresses the following topics:

• What qualifies as an NDI
• When an NDI notification is necessary
• Procedure for submitting an NDI notification
• Data that FDA recommends companies to consider when evaluating the safety of a dietary supplement containing a NDI
• What should be included in a NDI notification
• Definitions that can affect whether a particular substance may be marketed as a dietary ingredient in a dietary supplement.

FDA's guidance documents, including this guidance, do not establish legally enforceable responsibilities. Instead, guidances describe the Agency's current thinking on a topic and should be viewed only as recommendations, unless specific regulatory or statutory requirements are cited. The use of the word should in Agency guidances means that something is suggested or recommended, but not required

To read the complete guidance document, please visit: http://www.fda.gov/Food/GuidanceComplianceRegulatoryInformation/GuidanceDocuments/DietarySupplements/ucm257563.htm

For more information, please contact your local Deringer representative.

The Consumer Product Safety Commission (CPSC) recently voted in favor of the 100 parts per million (ppm) lead content limit for children’s products as of August 14, 2011, as required by the Consumer Product Safety Improvement Act (CPSIA). This change will affect all children’s products sold, offered for sale, manufactured for sale, distributed in commerce, or imported for sale in the United States, including existing inventory, unless if not otherwise excluded. The Consumer Product Safety Improvement Act (CPSIA) states that, as of August 14, 2011, children’s products may not contain more than 100ppm of lead, unless the Commission determines that this limit is not technologically feasible. CPSC made this determination after requesting comment and seeking information from the trade. The previous lead limit, enacted in 2009, was 300 ppm. For complete details, the draft notice can be found at: http://www.cpsc.gov/library/foia/foia11/brief/lead100tech.pdf

The Consumer Product Safety Commission (CPSC) recently voted unanimously in favor to extend the stay of enforcement for children’s toys until January 1, 2012. The Consumer Product Safety Improvement Act (CPSIA), enacted in 2008, required the toy industry to comply with the American Society for Testing and Materials (ASTM) F963 standards, but did not require third party testing and certifications. Children’s toys fall under the ASTM F963-08 standards and toy chests fall under the ASTM F963-07 standards. This extension of the stay will allow the ASTM toy committee time to complete the 2011 version of the standard. Also, the extension will align the lifting of this stay with the date of the lifting of the testing and certification stay for lead in children’s products. To read a news release from CPSC, which includes links to three commissioners’ statements in regards to these changes, please go to: http://www.cpsc.gov/cpscpub/prerel/prhtml11/11282.html

The Consumer Product Safety Commission (CPSC) launched www.saferproducts.gov in March 2011.  The website contains a database of consumer complaints for potentially dangerous products.  The new website is a requirement of the Consumer Product Safety Improvement Act and will assist the CPSC in quickly identifying product hazards as well as provide safety information to consumers.  

Consumers have the ability to submit complaints about a particular product.  CPSC then submits a notice to the manufacturer, importer, or private labeler about the claim, and they have 10 days to respond to the CPSC.  If the company fails to respond, the database will be populated with the manufacturer, product ID, and the complaint.  If the company replies within the 10 window with comments and claims, the entire report will be posted on the new website.  

It is recommended that manufacturers and importers register with www.Saferproducts.gov if they have not done so already.  Registered companies will receive alerts when a complaint is filed.  To register, please visit http://www.saferproducts.gov/CPSRMSPublic/Industry/Home.aspx.    

The Department of Agriculture’s Agricultural Marketing Service (AMS) has issued a final rule that, effective September 30, 2011, will increase the assessment rate of cotton tax paid on cotton and cotton-containing imported products.  The assessment is mandated under the Cotton Research and Promotion Order.  The assessments are increasing from $0.01088 per kilogram to $0.012665 per kilogram, an increase of approximately 14%.  The AMS advises that this assessment increase reflects the increased weighted average price of Upland cotton received by US farmers during 2010.

The final rule also revises the assessment conversion factor used to determine the raw fiber equivalents of imported cotton-containing products. The collection of the cotton import assessments by Harmonized Tariff Schedule (HTS) number is detailed in the final rule published in the Federal Register on August 31, 2011.  Additionally, the AMS is also expanding the quantity of HTS numbers subject to the assessments.  The list of affected HTS numbers has expanded from 706 to 2,371.
 
The Federal Register states that the assessment adjustments are required on imported cotton and cotton-containing products because the same assessments are collected on domestically produced cotton.

On September 7, 2011, the House of Representatives is expected to renew the Generalized System of Preferences (GSP) program through July 31, 2013.  GSP is a trade program impacting imports into the US from many developing countries.  The GSP renewal will be retroactive to December 31, 2010, the program’s expiry date.  Once the House approves the program extension, it will go to the Senate.  The Senate is expected to amend the bill to include an extension of the Trade Adjustment Assistance program including changes introduced in 2009.  Since other Senate issues will take precedence over the GSP/TAA renewal, it is unclear when the bill will meet approval in the Senate.  The GSP extension bill includes a merchandise processing fee increase from 0.21% to 0.3464%.  Trade sources speculate that the GSP/TAA momentum might also prompt President Obama to submit to Congress the legislation to move forward the Korea, Colombia, and Panama free trade agreements.

Deringer will continue to monitor the progress of the bill and provide updates.  For more information, please contact your local Deringer representative.

On September 22, 2011, the US Senate passed H.R. 2832, which would retroactively renew the Generalized System of Preference (GSP), and temporarily increase the Merchandise Processing Fee (MPF), as well as add an amendment extending the Trade Adjustment Assistance (TAA) program.  

MPF for formal entries would be adjusted as follows:

October 1, 2011 through November 30, 2015 – MPF would increase from 0.21% to 0.3464% ad valorem.

December 1, 2015 through September 30, 2016 – MPF would return to 0.21% ad valorem.

October 1, 2016 through September 30, 2019 - MPF would be decreased to 0.1740% ad valorem.

Due to the TAA amendment, H.R. 2832 must be passed by the US House of Representatives again before it can be signed by President Obama and passed into law.  

The bill and amendment are available at:
 http://thomas.loc.gov/cgi-bin/bdquery/z?d112:h.r.2832:    

Deringer will continue to monitor the progress of the bill and provide updates.  For more information, please contact your local Deringer representative.

On Monday, October 3, 2011, President Obama sent three pending free trade agreements (FTAs) to the US Congress.  The United States negotiated the FTAs individually with South Korea, Panama, and Colombia about four years ago.  Certain US industries have long been awaiting the passage of these FTAs because Canada and the European Union have already passed trade agreements with these countries, putting US companies at a disadvantage until now.

Combined, the FTAs represent almost $3 billion of additional agriculture exports to South Korea, Panama, and Colombia.  In particular, the FTAs are expected to positively impact the US red meat, pork, soy, and coarse grain industries.  The US Commerce Department estimates that implementation of the US-South Korea FTA may lead to an estimated $11 billion increase in annual US exports, supporting at least 70,000 American jobs.  The House Ways & Means Committee is expected to discuss the FTAs on Wednesday, October 5, before moving them to the floor.

The Agricultural Marketing Service (AMS) recently published a final rule to create a Softwood Lumber Research, Promotion, Consumer Education, and Industry Information Order that will impose a fee beginning January 1, 2012.  The new fee will affect both domestic manufacturers and importers of softwood lumber.   

The following Harmonized Tariff System (HTS) numbers will have a $0.1483 per cubic meter fee applied to shipments.

4407.10.01
4409.10.05
4409.10.10
4409.10.20
4409.10.90
4418.90.25

For more background on the fee, please review our trade alert posted on June 24, 2011.  

On Friday, October 21, 2011, President Obama signed into law the long-awaited free trade agreements (FTAs) between the US and South Korea, Panama, and Colombia.  Additionally, legislation was passed extending the much-anticipated Generalized System of Preferences (GSP) and Trade Adjustment Assistance (TAA) programs.  An increase in the merchandise processing fee (MPF) accompanies the reinstatement of GSP and TAA.

By reducing tariffs, the FTAs are said to be worth billions to US exporters.  An estimated 70,000 to 250,000 jobs are expected to be created as a result.  The FTAs, negotiated approximately four years ago, include language relating to labor rights, the environment, and intellectual property to help protect American interests.  The European Union and Canada already had trade agreements in place with these countries, so the new FTAs are expected to make trade between the US and these countries more competitive.

The GSP and TAA programs were also reinstated and will be retroactive to January 1, 2011, the date GSP expired.  The renewals are through July 31, 2013.  GSP is a trade program impacting imports into the US from many developing countries.  US Customs & Border Protection (CBP) will provide additional instructions for the refund of duties on goods that would have been eligible for GSP between when the program expired and now.

Along with renewal of GSP/TAA, the MPF was increased from 0.21% ad valorem to 0.3464% ad valorem.  The MPF increase will apply to entries retroactive to October 1, 2011, and will apply to imports through June 30, 2021. Although MPF is capped at $485, importers previously reached the cap at $230,952 but will now reach it at $140,011 and higher.  The minimum MPF of $25 is still applicable.  Currently, CBP is updating its systems to accept the new MPF rate.  CBP will notify the trade when they can begin submitting entries with the new MPF rate.  Congress and CBP are also determining how the retroactive MPF payments will be collected.

Deringer will continue to monitor updates on the refund of duties for goods that were eligible for GSP and the collection process for MPF retroactive to October 1, 2011.  When more information becomes available, Deringer will provide direction on how to apply for refunds and pay retroactive MPF.  For more information, please contact your local Deringer representative.

On October 21, 2011, H.R. 2832 was signed into law changing the Merchandise Processing Fee (MPF) from 0.21% (0.0021) to 0.3464% (.003464).  The minimum charge of $25 and maximum charge of $485 did not change.  The new legislation made the change retroactively effective to October 1, 2011. US Customs and Border Protection's (CBP) systems will be ready to accept the new MPF rate on Saturday, November 5, 2011, at approximately 7:30AM EDT.  The system update will allow the trade to submit the new MPF rate for summaries that have a duty computation date of October 1, 2011 or later.

Congress and CBP have not yet provided guidance on how the retroactive MPF payments will be collected.  Deringer will continue to monitor updates on the collection process for MPF and will provide more information when it becomes available.  For more information, please contact your local Deringer representative.

The advice offered above is strictly an informal opinion of A.N. Deringer, Inc. and is based solely upon information provided. Reliance upon this advice does not constitute reasonable care under the Customs Modernization Act. In order to exercise the highest degree of reasonable care, A.N. Deringer, Inc. recommends that our clients perform a complete review, which may include application for a binding ruling from U.S. Customs and Border Protection.

Transpacific carriers are currently announcing general rate increases (GRI) and peak season surcharges (PSS). All 15 members of the Transpacific Stabilization Agreement (TSA) have announced GRIs effective January 1, 2012, as shown below.  An identical PSS has been announced as well, with an effective date of December 15, 2011; however, there is some speculation regarding whether the market will bear the increase for that time frame.

20’ Container: US$320
40’ Container: US$400
40’ High Cube Container: US$450
45’ Container: US$510

In an attempt to reduce revenue losses, some carriers are reducing capacity and removing services.  For instance, CYKH suspended their all-water AW5 service causing a tighter supply on the East Coast, especially since the service utilized 5,500 TEU ships.  Although carrier forecasts for December are quite strong, a capacity shortage is anticipated between now and Chinese New Year (January 23, 2012).

Deringer will continue to monitor the rate increases and capacity constraints but advises companies to start planning their shipments accordingly.  For more information, please contact Bob Kavanaugh, Route Development Manager Asia/Pacific/Africa.

The Occupy Wall Street movement has called for a West Coast ports shutdown on December 12, 2011.  At this time, the potential impact is unclear.  The Ports are working with public safety officials to be fully prepared to deal with any potential disruptions.  It is important to note that the call to shut down the ports is not sanctioned by the International Longshore and Warehouse Union (ILWU).  As more information becomes available, we will send updates.

The leaders of the US and Canada agreed to implement the Beyond the Border and the Regulatory Cooperation Council Action Plan agreements yesterday. The goal of the plans is to streamline travel and trade between the two countries and enhance security, in part by aligning regulatory approaches and processes. The initiative addresses four key areas of cooperation including addressing threats early, trade facilitation, integrated cross-border law enforcement, and critical infrastructure and cybersecurity.
 
Some of the 29 initiatives included are:

• Quicker border crossings for commercial traffic
• Posting wait times for border crossings
• Establishing a common framework for trusted trade partner programs, such as the United States' Customs-Trade Partnership Against Terrorism (C-TPAT) and Canada's Partners in Protection (PIP).  This would include better benefits and a streamlined application process.
• Approval of consumer health products more quickly in Canada if previously approved in the US.  Adjusting labeling and sharing information to more easily market products in both countries.
• Integrating border and law enforcement efforts, including joint investigations

Pilot projects are anticipated to begin as early as spring of 2012. To submit comments and for additional details, please read the Department of Homeland Security docket. Additional background information can also be found on the Government of Canada's website. As additional details become available, Deringer will provide updates.

Recent trade legislation, H.R. 2832, was signed into law on October 21, 2011, changing the merchandise processing fee (MPF) rate for formal entries from 0.21% (.0021) to 0.3464% (.003464), retroactively effective October 1, 2011. (Deringer's 10/24/11 trade alert available here.) The minimum and maximum fees, $25 and $485 respectively, did not change. US Customs & Border Protection (CBP) put programming changes in place and began accepting MPF at the new rate on November 5, 2011.  CBP is currently in the process of issuing bills for entries filed in the interim period.

Deringer has begun to receive the first notices, and we would like to remind our clients that they will be receiving invoices soon.  If Deringer filed a CBPF4811 on behalf of your company, Customs will forward the bills to our attention for tracking and processing.  In this case, no action is needed as Deringer will bill you for the increased MPF and pay CBP on your behalf.  If we have not filed a CBPF4811 on your behalf, please be on the alert for bills which will come directly from CBP.  Please note that CBP recently changed the format of their bills to a full sheet invoice, as opposed to the “pink bills” they previously used.  CBP will disregard differences of less than $20.  

Should you have any questions regarding this matter, please feel free to contact compliance@anderinger.com  or call (518)298-8281 and ask for the Compliance Department.

Effective January 1, 2012, the US Fish and Wildlife Service (FWS) will be increasing inspection fees.  This is the final scheduled increase that was established on December 9, 2008, when a final rule was published in the Federal Register that set import/export inspection fees for the period 2009-2012. 

Groups affected by the fee adjustment include commercial importers/exporters; noncommercial importers/exporters; anyone importing/exporting live wildlife and/or protected species; and anyone requiring overtime services. 

The new inspection fees are as follows and will remain in effect indefinitely.

Designated port base inspection fee - $93
Staffed non-designated port base inspection fee - $145
Non-staffed non-designated port base inspection fee - $145
Premium inspection fee for protected species at any port - $93
Premium inspection fee for live wildlife at any port - $93
Overtime inspection fee for inspection beginning less than 1 hour before normal work hours - $53
Overtime inspection fee for inspections after normal work hours, including Saturday and Sunday - $105 minimum for 2 hours plus $53 for each additional hour
Overtime inspection fee for inspection on Federal holidays - $139 minimum for 2 hours plus $70 for each additional hour

Additional information can be found at http://www.fws.gov/le/ImpExp/Info_Importers_Exporters.htm

Refunds for GSP-eligible entries, filed before the duty preference program was retroactively reinstated (between January 1 and November 4, 2011), are currently being processed by US Customs and Border Protection (CBP). CBP is processing refunds for those entries filed via the Automated Broker Interface (ABI) with the Special Program Indicator (SPI) A.

Claims for retroactive GSP duty refunds, for non-ABI entries or entries filed without SPI A, must be filed by April 18, 2012.  CBP recently changed the deadline from May 3, 2012, to this earlier date in their CSMS#11-000310 message dated December 13, 2011.  A post-entry request is required to receive refunds for those GSP-eligible entries filed without SPI A, between January 1 and November, 4, 2011.

If you have questions regarding GSP eligibility or refund claims, please send an email to compliance@anderinger.com.

Softwood Lumber Board Officials have stated that the new softwood lumber fee on imports of $0.35 per thousand board feet will not be collected by US Customs and Border Protection (CBP) via the Automated Broker Interface (ABI).  Instead, starting January 1, 2012, the fee will be submitted by importers directly to the Softwood Lumber Board, on a quarterly basis.  The Board plans to provide instructions on the fee’s submission in the coming month. 

The Board has stated that due to the exemptions in the Agricultural Marketing Service (AMS) final rule, only approximately 100 of the estimated 1000 importers of softwood lumber will have to submit payment for the fee.  The Board has recognized all affected importers and plans to issue invoices in late March or early April, 2012, for the first quarter payment. 

For more information, please review our recent trade alert at http://www.anderinger.com/regulatory-center/trade-alerts/41         

US Customs and Border Protection (CBP) continues to consider textiles a Priority Trade Issue (PTI) in 2012.  Due to the enforcement of Free Trade Agreements and legislative mandates, the textiles and apparel industries are very politically sensitive.  The textile industry represents more the $94 billion in annual imports, made up of approximately 68,000 importers, and accounting for 47% of all duties collected by CBP.  The average duty rate is 16% and over $17 billion of entered textiles and apparel claim preferential tariff treatment, resulting in textiles and apparel to continue being considered at high risk for non-compliance. 

In fiscal year 2011, CBP seized over $14 million worth of textiles for Intellectual Property Rights (IPR) and Quota/Visa violations.  Additionally, CBP issued 48 penalty actions valued at $27 million.  More than 10,000 physical exams were executed, over 1,300 textile samples were examined by labs, and 36 audits were initiated. 

Textile Production Verification teams (TPVTs) conduct on-site verification of foreign textile and wearing apparel manufacturers.  The teams review and verify production and compliance with the terms of trade preference programs.  The visits help educate foreign governments and manufacturers as well as deter circumvention of the program requirements.  In 2011, CBP visited 165 factories in 9 countries.  27% of the reviews showed a violation of the trade preference program claimed on the entry and 22% showed a discrepancy related to illegal transshipments.

CBP also continues to look at the undervaluation of textile and wearing apparel by entities with no legal right to make entry into the US.  Goods are being imported under false identities, which make it difficult for CBP to collect additional duties or penalties.  Additionally, misclassification of wearing apparel, often to avoid high duty rates, is an area of high risk.  In 2011, 48% of textiles sampled by labs were misclassified. 

 Another area that CBP is scrutinizing is the illegal transshipment of goods through the US into Mexico.  These goods, falsely claiming US origin, are exported to Mexico under false NAFTA claims.  The exports typically range from finished apparel that is using a US origin claim to avoid Mexico’s dumping duties against China, to fabric used to produce goods.  The fabric exports are then used in production of apparel imported back into the US under false NAFTA claims. 

For more information on additional PTIs for CBP, please visit http://www.cbp.gov/xp/cgov/trade/priority_trade/

On February 3, 2012, changes to the US Harmonized Tariff Schedule (HTS) will take effect reflecting modifications recommended by the World Customs Organization (WCO) as part of Presidential Proclamation 8771.  An unofficial version of the New HTS, showing chapters 1 through 97, is currently available online (toward the bottom of the document).  The official electronic and printed versions will not be released until February 3.  A document containing the WCO-recommended changes are posted in an International Trade Commission report available here.  

Deringer recommends that importers review their product classifications, including a close review of the 2012 changes.  Import paperwork should reflect tariff changes.  For inquiries or additional information regarding the HTSUS, please send an email to compliance@anderinger.com.

The transpacific ocean carriers, who serve inbound trade lanes from the Indian sub-continent and Asia to the US and Canada, have recently implemented a General Rate Increase (GRI) for all North American bound cargo as follows:

USD $8 per CBM
USD $320 per 20’ STD
USD $400 per 40’ STD
USD $450 per 40’ HC
USD $510 per 45’ HC

The increases will be automatically applied to all invoices for cargo received by the ocean carrier after January 1, 2012.

Please contact your Deringer representative if you have any questions.  

US Customs and Border Protection recently advised Customs – Trade Partnership Against Terrorism (C-TPAT) members that the current International Organization for Standardization (ISO) mechanical seal standard (ISO/PAS 17712) will be replaced with a new ISO standard, ISO 17712:2010.  The new standard will go into effect March 1, 2012.  CBP has stated that C-TPAT participants do not have to discard any of high security container seals that do not comply with the new standard due to the cost involved.  They are recommending companies to purchase the new compliant seals when their current stock is depleted.  CBP also recommends that when companies transition to the new compliant seals that they request documentation to confirm the seals comply with the new ISO 17712:2010 standard.  

The new seal standard includes the following requirements:

• Testing to determine a seal’s classification for physical strength (as a barrier of entry)

• Process auditing of the manufacturer’s security related business practices

• Testing (pass/fail) of a seals ability to indicate evidence of tampering

• A new 18mm minimum width diameter for bolt seals

Benefits of the new seal standard include:

• Reduced possibility of cargo theft or tampering

• Reduced possibility of unauthorized material being inserted into containers or other instruments of international traffic

• Reducing shipping delays that result when seals are missing or broken

• When inspecting seals for signs of tampering, tamper evident seals should allow personnel, with appropriate training, to detect compromised seals easier

Since the issuance of the previous notice, C-TPAT has learned that the tamper evidence element of the ISO 17712:2010 requirements (Clause 6) cannot be met.  To date, no accredited independent laboratories have been willing to test and certify seals as complying with the tamper evidence requirement.  Consequently, C-TPAT has determined that implementation of the new standard is not viable by the March 01, 2012 deadline. 

C-TPAT has also become aware that the ISO is working to amend ISO 17712:2010 to address the issue with this standard.  Therefore, implementation of the new ISO 17712:2010 standard for mechanical seals will be delayed until C-TPAT receives definitive information that ISO has resolved this issue.  C-TPAT partners will be advised when the ISO has resolved the tamper evidence issue with the ISO 17712:2010 standard.

Since the ISO 17712: 2010 (18 mm) certification for high security seals is attainable without the Clause 6 testing portion of the standard, C-TPAT encourages partners to buy seals that meet this part of the standard.  If C-TPAT companies decide to transition to seals that meet this portion of the new ISO standard, they should request documentation to confirm that the purchased seals comply with the current testing requirements for ISO 17712: 2010 (18 mm) certification. 

On Wednesday, February 22, 2012, US Customs and Border Protection (CBP) published a notice of proposed rulemaking that would make significant changes to the way in-bond shipments are processed.  Currently, in-bond cargo may be transported through the US without the appraisement or the payment of duties, provided that the appropriate bond is obtained and a transportation entry is filed with CBP.  The transportation entry accounts for the cargo while en route in the US. The in-bond merchandise is then entered for consumption, entered for warehouse, or exported. The proposed rule would tighten up the in-bond process to enable better tracking of cargo and ensure the payment of duties if dutiable merchandise is not exported as reported in the in-bond entry paperwork. According to a 2007 US Government Accountability Office (GAO) report, in-bond shipments account for 30 to 60 percent of all imports that move through US ports.

Under the new regulation, carriers or their agents would be required to report additional information, file in-bond applications electronically, and implement other in-bond shipment process changes. Some of these changes are noted below:

• In-bond entries will be filed electronically; paper applications will not be accepted with the exception of merchandise transported by pipeline.
• Additional information required would include the six-digit Harmonized Tariff Schedule (HTS) number, when available, and information relating to the safety and security of the goods being shipped.
• A 30-day maximum time frame to transport goods between US ports, for any mode of transportation except pipeline, would be established.
• Carriers deviating from their declared destination port would be required to report the destination port change electronically. Currently, notification of port change is not necessary.
• Within 24 hours of arrival at the destination port or port of export, carriers would be required to report the arrival and location of goods.
• Assessment of liquidated damages against carriers or other authorized parties for the unauthorized removal of a container/truck seal (in-bond movements require a seal).

At this time, CBP is not proposing to change the in-bond procedures found in the air commerce regulations at 19 CFR part 122, subparts J and L, except to change the specified maximum transit and export times to conform to the proposed changes in Part 18. Any other proposed changes to those subparts will be done in a separate rulemaking.

Further upgrades to CBP’s Automated Commercial Environment will be necessary to implement these reforms. The impetus for the rulemaking comes from the 2007 GAO report identifying that CBP had difficulty closing out bonds and collecting duty for these types of shipments because a systematic process was not in place. Comments from the public are currently being accepted by CBP and must be filed by April 23, 2012. Deringer will continue to monitor the progress of this rulemaking.  

For the complete version of the proposed rule or instructions on submitting comments, please visit the Federal Register.

The transpacific ocean carriers, who serve inbound trade lanes from the Indian sub-continent and Asia to the US and Canada, will be implementing a General Rate Increase (GRI) for all North American bound cargo as follows:

USD $8 per CBM
USD $240 per 20' STD
USD $300 per 40' STD
USD $340 per 40' HC
USD $510 per 45' HC

The increase will be automatically applied to all invoices for cargo received by the ocean carrier after March 15, 2012.

Please contact your Deringer representative if you have any questions.

On March 15, 2012, the US-Korea Free Trade Agreement (KORUS FTA) will go into effect.  Under the agreement, almost 80 percent of US industrial product exports to Korea will become duty-free.  Within 5 years, nearly 95 percent of bilateral trade in consumer and industrial products will become duty free with the balance becoming duty free within 10 years. Some of the goods included in the agreement include aerospace equipment, agricultural equipment, auto parts, building products, chemicals, consumer goods, electrical equipment, environmental goods, footwear and travel goods, paper products, scientific equipment, and shipping and transportation equipment.  Nearly two-thirds of US exports of agricultural products to Korea will also gain duty-free status, including wheat, corn, soybeans for crushing, whey for feed use, hides and skins, cotton, cherries, pistachios, almonds, orange and grape juice, and wine.  The pact also includes measures not relating to the tariff, such as obligations regarding motor vehicle safety and environmental standards, enhanced regulatory transparency, standard-setting, technology neutrality, customs administration, labor rights, and strengthened protections for intellectual property rights.

KORUS is part of a Presidential goal to double US exports in 5 years.  The US International Trade Commission estimates that the tariff cuts provided by the agreement will increase exports from the US by $1 billion.

KORUS documents from the Office of the US Trade Representative are available online.  To learn more about KORUS eligibility and compliance, please contact Deringer’s Logistics Consulting Group at consulting@anderinger.com.

In strict enforcement of wood packaging material (WPM) requirements outlined in the International Standards for Phytosanitary Measures (ISPM15), US Customs and Border Protection (CBP) is turning away some trucks at the US-Canada border.  In particular, trucks carrying cargo across the Blaine, Washington, border have been turned back numerous times over the past month. While WPM from Canada is still exempt from ISPM 15 requirements, goods originating in a country other than the US or Canada are bound by the regulation even when they are transported from Canada into the US.  For example, Chinese origin merchandise that is unloaded in Vancouver, British Columbia, and then trucked to the Blaine port of entry must have WPM that is in compliance with ISPM15.  Furthermore, truckloads containing pallets that are both marked and unmarked, when the country of origin is other than Canada, will be denied entry into the US unless the packaging meets ISPM15 requirements. CBP and the US Department of Agriculture provided clarification on the regulation by stating that wood packaging is considered to have the same country of origin as the goods that accompany them. 

Deringer advises companies to ensure their WPM meet ISPM15 requirements.  For now, Canadian origin goods are exempt from ISPM15.  Deringer will continue to provide updates and guidance regarding ISPM15 enforcement.  Please visit CBP’s FAQ on ISPM15 for a refresher on the reason, exemptions, and requirements of the rule.  Additional information can be found on the WPM page of CBP’s website and in the ISPM15 document found on the International Plant Protection Convention’s website.

The Transpacific ocean carriers, who serve inbound trade lanes from the Indian sub-continent and Asia to the US and Canada, will be implementing a General Rate Increase (GRI) for all North American bound cargo as follows:

USD $8 per CBM
USD $320 per 20'
USD $400 per 40' STD
USD $450 per 40' HC
USD $505 per 45'

The increase will be automatically applied to all invoices for cargo received by the ocean carrier after April 15, 2012.

Please contact your Deringer representative if you have any questions. 

On May 4, 2011, US Customs and Border Protection (CBP) and the European Union (EU) signed a Mutual Recognition Decision between CBP’s Customs-Trade Partnership Against Terrorism (C-TPAT) program and the EU’s Authorized Economic Operator (AEO) program.  By signing the decision, each recognizes compatibility between the two cargo security programs.  Customs authorities for the US and EU will treat members of each security program as it would treat their own program members. 

The US currently has Mutual Recognition of security programs with New Zealand, Canada, Jordan, Japan, and Korea.  Additionally, the US is currently working with Singapore to develop a Mutual Recognition Decision. 

C-TPAT is a voluntary government-business initiative to build cooperative relationships that strengthen and improve overall international supply chain and US border security. C-TPAT recognizes that US Customs and Border Protection can provide the highest level of cargo security only through close cooperation with the ultimate owners of the international supply chain such as importers, carriers, consolidators, licensed customs brokers, and manufacturers.

For more information on C-TPAT, please click here or email ctpat@anderinger.com. 

The transpacific ocean carriers, who serve inbound trade lanes from the Indian sub-continent and Asia to the US and Canada, will be implementing a Peak Season Surcharge (PSS) for all North American bound cargo as follows:

USD $480 per 20' STD
USD $600 per 40' STD
USD $675 per 40' HC
USD $760 per 45' HC

The increases will be automatically applied to all invoices for cargo received by the ocean carrier after June 10, 2012.

Please contact your Deringer representative if you have any questions.

US Customs and Border Protection announced yesterday that they will commence full enforcement of HQ Ruling H026715 effective December 28, 2012.  This ruling will require the manifesting of containers (Instruments of International Traffic – IIT) with residue, as well as empty containers.  

According to the ruling, all IIT imports containing residue may no longer be treated as empty.  IIT loaded in the US with goods that are exported and subsequently returned to the US with any quantity of residue below the manifest threshold limits (see below) will now need to file an eManifest indicating that the IIT contains residue.  If the container has been cleaned prior to return to the US, then the container must be manifested as empty.

• For truck IIT – a quantity of residue not to exceed 3% of the IIT’s total capacity
• For rail IIT – a quantity of residue not to exceed 7% of the IIT’s total capacity

Furthermore, should the amount of residue exceed the limits cited above, the shipment will require an entry as a commercial transaction and will not be considered residue.

CBP will provide a modified enforcement period of 90 days to allow the trade to refine their systems and business practices to come into compliance. Deringer will continue to provide information on the enforcement of this regulation. For additional information, please consult the IIT with Residue FAQ posted on CBP’s website or email us at compliance@anderinger.com.

Canadian Pacific (CP) Railway suspended its Canadian service as locomotive engineers and conductors went on strike at 12:01AM on May 23, 2012.

CP Railway and the Teamsters Canada Rail Conference Union were unable to agree on a contract by the midnight deadline.  The parties could not come to agreement on pension plans and fatigue management. 

The Canadian Federal Labour Minister Lisa Raitt said in a statement, "The government is concerned about the national economic significance this will have, and we are prepared to act in the interest in the national economy."  An extended labour dispute would have a negative impact on Canadian businesses, the economy and families, Ms. Raitt expressed.  CP is urging government to step in and impose binding arbitration, though negotiations are expected to resume Wednesday morning.

Deringer is working closely with carriers in an attempt to minimize delays and deliver cargo as quickly as possible.  We will continue to monitor the situation and provide updates. 

PierPass, Inc. announced, effective August 1, 2012, the Traffic Mitigation Fee at the Ports of Los Angeles and Long Beach will increase $1.50  to $61.50 per TEU (twenty-foot equivalent unit) and $123 per forty foot container.  The fee was increased to address labor cost increases scheduled to take effect on July 1, 2012. 

The Traffic Mitigation Fee helps pay for night and Saturday marine terminal shifts created by the PierPass OffPeak program, which was instituted to relieve day time congestion in and around the ports.  It provides financial incentive to move cargo during off-peak hours.  For more information, please visit www.pierpass.org. 

US Customs and Border Protection (CBP) announced, on June 15, 2012, that they will begin billing for the retroactive increase to the Merchandise Processing Fee (MPF).  The MPF increase was retroactive to October 1, 2011, but CBP did not begin accepting the new MPF rate until November 5, 2011.  CBP could not begin the retroactive billing process for MPF-eligible merchandise, entered between October 1 and November 4, until refunds had finished processing for other trade agreements that were retroactively renewed (i.e. Generalized System of Preferences, Andean Trade Preference Act, and the Andean Trade Promotion and Drug Eradication Act).

To generate a bill for the additional MPF due, entries will be liquidated with a future date.  Differences of less than $20 will not be processed for retroactive MPF.  Entries flagged for reconciliation will have the MPF increase accounted for via the reconciliation entry.  The liquidation process began the week of June 11, 2012.  CBP anticipates liquidating approximately 20,000 entries per week.

The June 15 notice from CBP, CSMS #12-000217, can be read on their Cargo Systems Messaging Service page.  For additional information, please contact Deringer’s Compliance Department.

A June 19, 2012 message from the Office of International Trade (OT), of US Customs and Border Protection (CBP), stated that CBP ports may require additional revenue security in the form of single transaction bonds (STBs) for shipments subject to anti-dumping/countervailing duty (AD/CVD).  When a CBP port has reason to believe that a transaction subject to AD/CVD is in jeopardy of surpassing its continuous bond threshold, placing revenue for the port in jeopardy, additional security may be obtained through cash payment with the live entry or by procuring a single transaction bond.

The message provided guidelines for the appropriate use of this measure to ensure CBP ports uniformly carry out the requirement. The guidelines they provided addressed the following areas:

• Making determinations that there is a reasonable belief of possible revenue risk.
• STB use in conjunction with a continuing review or investigation risk pertaining to AD/CVD orders.
• How to determine the amount of the STB. The amount, in general, will be based on the value of the merchandise times the AD/CVD rate that would apply if the goods were subject to AD/CVD. Should that rate not be known, the highest AD/CVD rate for that commodity will be used. The amount of the continuous bond will always be considered before requiring the STB.
• Importers/brokers will be provided written notice of the STB requirement. The notice will include:
  • The amount of the STB.
  • The general reason why the STB is being required.
  • When to discontinue the requirement of STBs and how to return the STB if no revenue risk is determined to exist.
• The STB requirement will be discontinued when the review is completed and compliance is determined.
  • When the review concludes that there was no revenue risk, the STB will be returned.
  • The importer will be given written notice when the requirement for the STB is discontinued.
• All of the ports will be made aware when one port requests an STB to address possible placement of the revenue in jeopardy involving AD/CVD so that it will be required uniformly at each port.

If you have questions regarding AD/CVD or how this may impact you, please contact us at compliance@anderinger.com.

The transpacific ocean carriers, that serve inbound trade lanes from the Indian sub-continent and Asia to the US and Canada, have recently announced another General Rate Increase (GRI) for all North American bound cargo as follows:

West Coast ports:

USD $10 per CBM
USD $400 per 20’ STD
USD $500 per 40’ STD
USD $565 per 40’ HC
USD $635 per 45’ HC

All other destinations, both via West Coast ports of discharge / mini-land bridge service, and to/via East Coast ports of discharge:

USD $14 per CBM
USD $500 per 20’ STD
USD $700 per 40’ STD
USD $790 per 40’ HC
USD $890 per 45’ HC

The increases will be automatically applied to all invoices for cargo received by the ocean carrier after August 5, 2012.

Please contact your Deringer representative if you have any questions. 

The current International Longshoremen’s Association (ILA) contract expires on September 30, 2012.  On July 18, 2012, talks resumed between the ILA and the United States Maritime Alliance (USMX) who are working towarda new contract agreement.  The two points of contention are automation and chassis pools. If an agreement is not reached by September 30th, a strike would likely occur shutting down all US East Coast and Gulf ports.  This would move all Asian cargo bound for the East Coast to West Coast ports.  If past experience is any indication, there will be long delays at the ports and on the rails.  In addition, there would be a significant shortage of space on the ships coming out of Asia.

In addition, containers from Europe, the Mediterranean, and most of South Asia would be shut out.  If the carriers elect to go to Canadian ports, there would also be a long backlog on both port handling and ship loading capacity.  Many importers and exporters are developing contingency plans.  One option is to increase inventory before the crunch time hits.  Also, suppliers should give advance bookings of at least two to three weeks ahead in an attempt to protect space on West Coast and inland point intermodal (IPI) or mini-land bridge (MLB) sailings from Asia.  Goods cannot be rerouted once the vessel has sailed, so arrangements to move European shipments through a Canadian port should be made at least 30 days in advance of the potential strike. 

ILA Negotiations May Lead to Additional Carrier Charges

From Asia:   There are rumors amongst carriers now that the new General Rate Increase (GRI) / Peak Season Surcharge (PSS) will be implemented in early August 2012 for both West Coast and East Coast traffic.  Currently, we have received official notices that the increase will be between USD$500 - $700/40'GP with an effective date range from August 1 to August 5.  Trade leaders foresee that if ILA negotiations lead to a labor strike in the East Coast and Gulf region, carriers will seize the opportunity to implement an East Coast GRI.  The chain effect is that many shipments will be directed to MLB service via the West Coast, thus the West Coast rate increase will be due to a "peak season". The space is expected to be extremely tight in all strings if the strike happens.  Deringer wants to work with customers to ship their cargo as early as possible or come up with other contingency plans.  It is important to understand that there is no space protection for all low margin cargoes during the critical period.   

From Europe: There is nothing concrete at this time in regards to a new GRI or PSS.  There is a possibility of a GRI in August, but nothing has been confirmed yet.   

Deringer will continue to monitor the situation and provide updates.  Should you have any questions, please contact your Deringer representative. 

In June, US Customs & Border Protection (CBP) began billing for the merchandise processing fee (MPF) retroactive increase, originally announced in HR 2832 on October 21, 2011.  Earlier this week, CBP announced in CSMS#12-000275 that some entry summaries (filed prior to October 1, 2011) were erroneously billed the MPF increase.  HR2832 became effective November 5, 2011, and made the MPF increase retroactive to October 1, 2011. Entry summaries dated on or after October 1, 2011, were subject to an MPF rate of 0.3464%; prior to that date, the MPF rate was 0.21%.

CBP will re-liquidate those entry summaries billed in error  to reflect the original MPF rate.  Importers that have already paid the incorrect bills will receive a refund.  The re-liquidation will also cancel unpaid bills for those entries incorrectly charged the higher MPF rate. CBP advises importers to closely monitor their entry summary liquidations and bills for MPF charges that may be incorrect on entries prior to October 1, 2011.  Bills received with the incorrect MPF rate should not be paid.  CBP will complete the re-liquidation process no later than October 6, 2012.  If you have questions regarding MPF bills and payments, please contact Deringer’s Compliance Department.

Cargo shipments coming to and from China’s Zhejiang province, including the ports of Shanghai and Ningbo, have been delayed by at least a day.  Several thousand ships were anchored or ordered to port and flights were cancelled in anticipation of the arrival of Typhoon Haikui.  Over 500 domestic and international flights were cancelled to and from Shanghai’s two airports.  The typhoon made landfall south of Shanghai with winds of up to 110 km per hour. Deringer will provide an update regarding the typhoon as more information becomes available.  Please contact your local customer service center for information regarding the impact to specific shipments.

Beginning November 1, 2012, the final phase of Canada Border Services Agency’s (CBSA) Advance Commercial Information (ACI) program, also called eManifest, goes into force. Phases I and II for marine and air modes of transportation have already been implemented.  The final phase impacts shipments traveling by ground (rail and highway). Under this mandatory requirement, carriers must electronically transmit cargo and conveyance data in advance of the shipment arriving at the border. Data must be validated and received by CBSA at least one hour before arrival at the border. Additionally, advance secondary data will be required from freight forwarders, importers or their brokers.  With full implementation of ACI, CBSA hopes to enhance their ability to identify potential threats to Canada while facilitating the movement of low-risk shipments across the border.

Between November 1, 2012, and May 1, 2013, carriers deemed to be not in compliance will be denied entry to Canada and issued non-monetary penalties.  After May 1, 2013, non-compliant carriers will be denied entry and issued monetary penalties. Deringer offers one system to manage your US and Canadian eManifest needs.  For additional information on Deringer’s eManifest solutions, please visit our website or call 1-888-612-6239.  Additional information regarding Canada’s eManifest requirements can be found on their site as well.

Last week, Typhoon Haikui hit China’s Zhejiang province. In anticipation of the storm, several thousand ships were anchored and flights were cancelled resulting in shipment delays. Cargo shipments coming to and from this area, including the ports of Shanghai and Ningbo, have been delayed by two to three days. Carriers and port authorities are working to eliminate the backlog.  Operations and shipping schedules are expected to return to normal next week.

Please contact your local Deringer customer service center for information regarding the impact to specific shipments.

On August 16, 2012, US Customs and Border Protection (CBP) released CSMS #12-000311 regarding recent US Treasury checks that were distributed without accompanying information.  US Treasury checks dated between July 30 and August 8, 2012, may have been distributed without details regarding the reason for the payment. If you received a CBP refund check (i.e. shown with the number 70050800 on the check next to the date) within this timeframe and are unsure of why you are receiving the check, please direct your inquiries to the CBP location where the entry was filed. If you have not filed any entries for which a refund might be due, you may contact the CBP Revenue Division at (317) 298-1200 extension 4015.

Steamship lines have announced yet another General Rate Increase (GRI) for all East bound cargo from the Far East and Indian Sub-continent origins to all US/Canadian destinations, effective September 10, 2012. For US west coast ports the GRI is as follows:

$400 USD per 20’
$500 USD per 40’ STD
$565 USD per 40’ HC
$635 USD per 45’

All other destinations, both via west coast ports of discharge/mini land bridge service and to/via east coast ports of discharge the GRI is as follows:

$560 USD per 20’
$700 USD per 40’ STD
$790 USD per 40’ HC
$890 USD per 45’

The increases will be automatically applied to all invoices for cargo received by the ocean carriers after September 10, 2012.

Please contact your Deringer representative if you have any questions.

Contract negotiations between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) broke down abruptly on Wednesday, August 22, 2012. The contract covers dockworkers at East and Gulf Coast ports in the US and expires on September 30, 2012. Wednesday’s meeting was supposed to be the first of three days of talks to iron out productivity and efficiency improvements.  The communication breakdown comes less than a month after these talks resumed on a favorable note.  Further negotiations are not scheduled between the ILA and USMX. However, the ILA plans to ask USMX to make a final offer for the union’s consideration, which the ILA anticipates its members will reject—making a strike likely.  Recently, the ILA affiliated with the International Dockworkers Council, and the ILA anticipates dockworkers affiliated with this union in other countries will support an ILA strike.

A strike would shut down all US East and Gulf Coast ports. Asian cargo bound for the East Coast would be diverted to West Coast ports causing long port and rail delays. In addition, containers coming from Europe, the Mediterranean, and most of South Asia would be nearly shut out.  Some carriers may elect to go to Canadian ports, but there would likely be a long backlog at those ports as they juggle port handling and ship loading capacity concerns.

Many importers and exporters are developing contingency plans.  One option is to increase inventory before the crunch time hits.  Also, suppliers should make advance bookings in an attempt to protect space on West Coast and inland point intermodal (IPI) or mini-land bridge (MLB) sailings from Asia.  Goods cannot be rerouted once the vessel has sailed, so arrangements to move European shipments through a Canadian port should be made at least 30 days in advance of the potential strike.  Deringer will continue to monitor the situation and provide updates.  Should you have any questions, please contact your Deringer representative.  

A week after contract negotiations broke down between the US Maritime Alliance (USMX) and the International Longshoremen’s Association (ILA), the largest local in the union (Local 1804-1 in North Bergen, NJ) unanimously voted for a strike.  The ILA represents dockworkers at East and Gulf Coast ports in the US.  Disputes over the contract, which expires September 30, 2012, have centered on productivity and efficiency improvements. Specifically, the USMX has requested concessions regarding overtime pay and elimination of jobs.  The ILA is aligned with other unions, both in the US and overseas, who are expected to support a strike if the two sides do not come to an agreement. With time running out for additional negotiations, Deringer recommends shippers implement contingency plans.

An ILA strike will cause delays in the US and Canada, and along both coasts, as cargo is re-routed to Canadian or US West Coast ports. As a result of the looming strike, carriers are quoting mini-land bridge (MLB) services at rates in excess of 50 percent higher than last month.  To alleviate supply chain delays, Deringer recommends shippers begin making alternate arrangements for routing their freight.  As a potential strike date draws closer, shippers and importers should consider the following.

• Freight destined to the East or Gulf Coast ports via all water routes must be on the water this week to arrive in time for containers to be offloaded prior to the contract expiration.
• As we enter peak season and during the strike, all MLB services will be flooded with overbookings.  Containers may be “rolled over” to alternate vessels/voyages in favor of shippers and importers considered by the carriers to be high priority. Importers should pad their supply chain transit times with an additional two to three weeks.
• Bookings should be made early.  Importers should work with overseas suppliers to project the availability of goods 14 to 21 days out, well in advance of goods being delivered to the overseas port.  Loading delays can be expected overseas unless plans are made beforehand.

Deringer will continue to monitor the situation and provide updates.  Please contact your local Deringer Customer Service Center for questions or to make alternate booking arrangements.

Once Canada’s ACI eManifest program goes into force, on November 1, 2012, Canada Border Services Agency (CBSA) will require all carriers to have their own bond. Currently, under CBSA policies and regulations, bonded carriers traveling into Canada are permitted to authorize non-bonded carriers to use their bond via a letter of authorization. Although not widely publicized, CBSA confirmed these new bond requirements are a result of Canada’s eManifest regulation.  For additional information on the elimination of carrier-code sharing and the eManifest policies and requirements, please consult CBSA’s website.  Additional information regarding Canada’s ACI eManifest requirements and Deringer’s solutions can be found on Deringer’s website.

At the request of the Federal Mediation and Conciliation Service (FMCS), a federal agency providing mediation for labor disputes, the International Longshoremen’s Association (ILA) and the US Maritime Alliance (USMX) have agreed to return to contract negotiations. The ILA is the union representing dockworkers at US East and Gulf Coast ports. The contract expires on September 30, 2012, and previous talks broke down on August 22. Shortly thereafter, the ILA warned that a strike was likely. The FMCS says the union and management will return to the bargaining table the week of September 17, 2012—less than two weeks before the contract expires.

Trade authorities anticipate if an ILA strike occurs it will cause delays in the US and Canada, and along both coasts, as cargo is re-routed to Canadian or US West Coast ports. As a result of the potential strike, carriers began quoting mini-land bridge (MLB) services at rates up to 50 percent higher than last month. Additionally, major carriers have advised that cargo will be subject to port congestion charges at US and Canadian ports if any labor unrests occur, including strikes, lock-outs, work stoppages, or slowdowns. The charge will only be instituted in the case of a work disruption; however, the ILA has voted in favor of a strike if an agreement is not reached by the contract’s expiry on September 30. The most common congestion charges for dry and reefer shipments are quoted below.

•    20’ containers USD 800
•    40’ STD containers USD 1,000
•    40’HC containers USD 1,125
•    45’ containers USD 1,266

In light of the potential strike, major retailers and small shippers alike are making alternate supply chain arrangements. Deringer has received requests from customers to re-route their freight, and trade journals have reported that some shippers are pushing cargo through West Coast distribution centers as a contingency plan. Although some freight is being pushed to the West Coast, the re-routed shipments are not without risk as congestion may mount as more shippers use this option. Moreover, the contract between the Port of Los Angeles and Long Beach Office Workers Unit (OCU) and their employers is still being negotiated. Their contract negotiations have not gone smoothly; however, the OCU and their management issued a promising joint statement last week stating they are working to avoid a strike. In the event of any union strike, work slowdowns are also possible from other sympathetic unions in the US or overseas as a show of solidarity.

Trade officials are not making predictions regarding the success of the next round of negotiations. When considering the potential strike, Deringer recommends that shippers keep in mind the following:

• Freight arriving at East or Gulf Coast ports prior to September 24, 2012, should not be impacted. Freight bound for the East/Gulf Coasts after this date may be inaccessible until work resumes at the ports.
• Once on the water, freight cannot be re-routed. However, in the event of a strike, carriers may elect to declare force majeure wherein containers will be offloaded at other ports and could be subject to detention and demurrage charges.
• Shippers may want to route freight through West Coast or Canadian ports; however, delays can be expected as congestion increases. Importers should pad their supply chain transit times with an additional two to three weeks.
• Deringer will make capacity available at its West Coast and Mid-West distribution centers to accommodate shippers’ re-routed freight.
• Bookings should be made early.  Importers should work with overseas suppliers to project the availability of goods two to three weeks out, well in advance of goods being delivered to the overseas port.  Loading delays can be expected overseas unless plans are made beforehand.
• Bookings to or from China should be confirmed early as China celebrates their Mid-Autumn Festival and National Day Golden Week holiday, taking place from September 30 through October 8, 2012. Chinese supply chain partners will be on holiday during this time, making it difficult to address any issues.

Deringer will continue to monitor and report on the ongoing negotiations. If you have specific questions, please contact your local Deringer Customer Service Center.

The International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) agreed to a 90-day contract extension after two days of negotiations mediated by the Federal Mediation and Conciliation Service (FMCS).  The ILA is the union representing dockworkers along the US East and Gulf Coasts, and the FMCS is a federal service providing mediation services for labor disputes.  The FMCS was brought in to mediate as a result of ongoing failed negotiation attempts between the ILA and USMX.

As a result of the extension, coast-wide strikes will be avoided during peak shipping season--as the contract expiration is brought through December 29. The new deadline allows the parties to focus on the outstanding issues without the pressure of the original September 30 contract expiration. The FMCS stated that the previous two days of negotiations were productive and helped the organizations agree to the extension.  A statement from the director of FMCS, George H. Cohen, stated: “In taking this significant step, the parties emphasized that they are doing so ‘for the good of the country’ to avoid any interruption to interstate commerce.”  The FMCS will continue to provide support for these negotiations. Since the contract has been extended, ocean carriers will not be instituting the congestion charges that were to be imposed if labor disruptions, such as a strike, took place.

In accordance with the Food Safety Modernization Act (FSMA), the US Food and Drug Administration (FDA) will be implementing new registration requirements for companies that manufacture, process, pack, or hold food for human or animal consumption in the United States. The registration requirement has been in effect for nearly ten years; however, the FSMA now requires that companies renew their registrations between October 1 and December 31 biennially. Beginning this October, food facilities must renew their registrations every even-numbered year.

Imports from unregistered facilities will have their shipments held at the port of entry or will be denied entry altogether by FDA. Additionally, as a reminder, foreign-located facilities that manufacture, process, pack, or hold food for human or animal consumption in the US must appoint a US agent as part of their FDA facility registration. Deringer provides US agency services and can represent clients before FDA.

Facilities that are currently registered should log into FDA’s Food Facility Registration Module to review and confirm the information on file.  In addition, registrants will be required to confirm that they agree to allow FDA access to their facilities upon request.  Failure to “renew” current registrations and agree to FDA inspections will result in the revocation of registrations.  Please note that currently registered facilities do not need to “re-register,” they simply need to review and update their current registration as necessary.  Facilities will retain their current registration numbers unless it is necessary to cancel and resubmit information to FDA.

Background of FSMA
The FSMA was signed into law by President Obama on January 4, 2011, and enables FDA to better protect public health by strengthening the food safety system in the US. The FSMA shifts FDA’s focus from responding to food safety concerns to preventing food safety issues (i.e., tainted food, contamination, food-borne illnesses, etc.). As a result, the FSMA provides additional oversight authority to the FDA to ensure compliance with the Act’s requirements and empowers them to respond effectively when problems emerge.

For additional information on the registration requirements or Deringer’s Agency services, please send an email to fda@anderinger.com. More information about FSMA or facility registration requirements relating to FSMA is also available on FDA’s website.

Recently, the US Food and Drug Administration (FDA) announced that food-related companies will need to renew their FDA facility registration.  Food-related companies are those that manufacture, process, pack, or hold food or dietary supplements for human or animal consumption in the United States. Registration renewals will be required biennially, on even-numbered years, from October 1 through December 31.  The first renewal period was to begin on October 1; however, the FDA announced they will not begin taking renewals as planned.  The FDA did not provide a timeframe for when the registration renewals would begin or an official reason for the postponement. In speaking with Deringer, one FDA official indicated that the delay is in part because FDA will be publishing guidance documentation regarding the facility registration renewal process. Depending on the length of the delay, the FDA may consider extending the renewal period beyond December 31.

When FDA begins accepting registration renewals, Deringer will provide an update. For information regarding FDA’s registration renewal requirements, please refer to Deringer’s original trade alert published on September 26.  For questions concerning FDA or its requirements, please send an email to fda@anderinger.com.

Effective September 30, 2012, the Agricultural Marketing Service (AMS) issued a final rule amending the Cotton Board Rules and Regulations to effect an increase in the supplemental assessment rate for imported cotton. The final rule increased the assigned value of imported cotton to ensure that assessments collected on imported raw cotton and the cotton content of cotton-containing products are the same as they are on domestically produced cotton.  As a result, imported cotton was increased approximately 14% from $0.010880 to $0.012665 per kilo of imported cotton.

In addition to the increase, the rule also expands the number of Harmonized Tariff Schedule (HTS) numbers subject to the assessment fee and revises the textile trade conversion factors.  The textile trade conversion factors are used to determine the raw fiber equivalents of products containing imported cotton, and they were updated to more accurately estimate the percentage of cotton contained in imported products containing cotton.  According to AMS, an analysis of the change showed that the conversion factor change will result in a 4.7% reduction in cotton value equating to a $1.93 million decrease in assessments.   The quantity of HTS numbers subject to the assessment increased from 706 to 2,371 numbers covered (representing an additional 11% of cotton products) meaning the program will collect assessments on nearly 100% of HTS numbers associated with cotton-containing products.  Since some HTS numbers apply to products containing 100% man-made fibers, importers can request a reimbursement from the Cotton Board after proving that an assessment was paid on fiber that was not Upland cotton.

There are exemptions applicable to some cotton-containing imported products.  If the amount of the cotton contained in the product results in $2 or less in assessments, the goods will not be subject to the assessment.  Also, exemptions apply to products containing cotton that was produced in the US, cotton that is not Upland, or imported products that are eligible to be labeled as 100% organic under the National Organic Program (which are not a split operation).

The rule can be read in its entirety in the Federal Register.

Canada Border Services Agency (CBSA) recently announced that they will begin a six month informed compliance period beginning November 1, 2012, as the final phase of their Advance Commercial Information (ACI) program rollout.  Phases I and II of ACI (also called eManifest) applied to marine and air modes of transportation and have already been implemented.  The final phase impacts shipments traveling by ground (rail and highway). Under this mandatory requirement, carriers must electronically transmit cargo and conveyance data in advance of the shipment arriving at the border. Data must be validated and received by CBSA at least one hour before arrival at the border. Additionally, advance secondary data will be required from freight forwarders, importers, or their brokers.  With full implementation of ACI in May 2013, CBSA hopes to enhance their ability to identify potential threats to Canada while facilitating the movement of low-risk shipments across the border.

Between November 1, 2012, and May 1, 2013, carriers deemed to be incompliant will not be denied entry to Canada or issued penalties.  However, beginning in May 2013, non-compliant carriers will be denied entry and may be issued monetary penalties.  The CBSA will continue to assist companies in becoming compliant through various outreach methods. 

The international transportation publication, American Shipper, is offering a complimentary webinar to discuss the latest on the ACI program on October 17.  Panelists include a CBSA official, a Trade Consultant, and Erica Rawson, Deringer’s District Manager for VT and ME.  For more information and to register, please visit http://www.americanshipper.com/main/checkemail.aspx?fdid=c3cc6c14-c7ad-4bff-818f-52495408517b&source=Deringer

Deringer offers one system to manage your US and Canadian eManifest needs.  For additional information on Deringer’s eManifest solutions, please visit our website or call 1-888-612-6239.  Additional information regarding Canada’s eManifest requirements can be found on CBSA’s site as well.

The US Food and Drug Administration (FDA) recently released an updated guidance for Food Facility Registrations. The Biennial registration renewal for food facilities began at 12:01 am on October 22, 2012.  At that time, the system started accepting the registration renewals. 

In accordance with the Food Safety Modernization Act (FSMA), the US Food and Drug Administration (FDA) will be implementing new registration requirements for companies that manufacture, process, pack, or hold food for human or animal consumption in the United States. The registration requirement has been in effect for nearly ten years; however, the FSMA now requires that companies renew their registrations between October 1 and December 31 biennially. Beginning October 22, 2012, food facilities must renew their registrations every even-numbered year.

Please visit, http://www.fda.gov/Food/GuidanceComplianceRegulatoryInformation/RegistrationofFoodFacilities/OnlineRegistration/default.htm to register online. 

US Customs and Border Protection (CBP) prioritizes which trade issues to look at based on a strategic risk management approach and the potential impact of noncompliance. These issues range from Agricultural Programs to Antidumping, Textiles, Intellectual Property Rights, Penalties, and Import Safety to Trade Agreements.

Recently, CBP has committed a stronger focus to trade agreements. CBP officials recently stated that they have found through North American Free Trade Agreement (NAFTA) verification that high percentage of claims can’t be verified and are, therefore, considered inaccurate. As a result of their findings, CBP plans to conduct far more NAFTA reviews.  In most cases, CBP will not grant any extensions of time to supply the requested proof because NAFTA rules demand that the analysis to support NAFTA claims be done prior to the signing of a NAFTA certificate.  Accordingly, proof of NAFTA should be readily available upon request.  Failure to timely prove NAFTA eligibility could result in the denial of the NAFTA claim and/or the opening of an investigation or penalty action.

Deringer recommends that importers and exporters evaluate their NAFTA and other trade agreement claims and ensure that they have the appropriate documentation to substantiate their specific trade agreement claims prior to the signing of a certificate or prior to accepting one supplied by another party. For additional assistance documenting NAFTA or other preference claims, inquiries can be directed to your local Deringer customer service center or to compliance@anderinger.com.

Severe weather attributable to Hurricane Sandy is expected throughout the Eastern seaboard and Northeastern US and Canada.  In anticipation of the storm, ports in Virginia through states north to New York have closed, interstates in Connecticut are closed except to emergency vehicles, and many airlines have cancelled flights throughout the region.  Shipments on board vessels calling on ports in the Mid-Atlantic and Northeast will be delayed, and carriers throughout the region are also predicting delivery delays over the next several days.

To help minimize service disruptions resulting from the storm, Deringer has put emergency preparedness plans in place.  Deringer's New York City, Boston, and Hartford facilities have closed.  Their phones have been forwarded to alternate locations. In the event that customers are unable to reach their regular Deringer contact or the customer service center at their actual port of entry, please use the contact information below:

Northern Border Entries
Sweetgrass, MT
Phone: 406-335-2300 / Fax: 406-335-2295 / PAPS Fax: 866-574-7420

Air/Vessel Entries
Chicago, IL
Phone: 847-734-0007 / Fax: 847-734-0098

Deringer’s New York City customer service center is closed due to power and phone service interruptions. Until Deringer’s NYC branch resumes operation, Deringer’s Boston facility has re-opened and is managing customers’ needs (ph: 617-887-2020 / fx: 617-887-1908).  Deringer’s Hartford facility has also re-opened.

Due to the severe weather, some of Deringer’s fax numbers at other locations are currently out-of-service.  If you experience trouble faxing paperwork to any of Deringer’s customer service centers, please phone your local Deringer contact for an alternate number.

As of 6 a.m. this morning, the Port of New York and New Jersey issued a press release announcing their facilities are closed and will remain closed until further notice.  Cargo aboard vessels calling on New York and New Jersey terminals will be delayed. US Customs and Border Protection in New York, New Jersey, and Washington DC are closed today. Marine terminals in Baltimore are closed today, but ports in Virginia and Connecticut highways have re-opened. Rail and carrier services throughout the Mid-Atlantic and Northeast are interrupted by flooding, wind damage, and road/track closures causing shipment delays throughout the area.

Effective December 1, 2012, the transpacific ocean carriers, who serve inbound trade lanes from the Indian sub-continent, Asia, and Australia to the US, Canada, and Mexico, have recently implemented a General Rate Increase (GRI) for all North American bound cargo as follows:

West Coast shipments, including intermodal cargo destined for points in CA, OR, or WA:
$320USD per 20’ STD
$400USD per 40’ STD
$450USD per 40’ HC
$505USD per 45’ HC

East Coast shipments, including all-water routes, inland via intermodal (IPI) or mini-landbridge (MLB) and drayed cargo for all states except CA, OR, and WA:
$480USD per 20’ STD
$600USD per 40’ STD
$675USD per 40’ HC
$760USD per 45’ HC

The increases will be automatically applied to all invoices for cargo received by the ocean carrier after December 1, 2012. Please contact your Deringer representative if you have any questions.

US Customs and Border Protection (CBP) recently released a Cargo Systems Messaging Service (CSMS) message reminding the trade that a certification of origin (CO) is required at the time a US-Korea Free Trade Agreement (FTA) preference claim is made on an importation into the United States.  Importers must have a CO in its possession or the claim may be based on importer knowledge that the good is an originating good, including reasonable reliance on information in the importer’s possession.  

For more information on demonstrating that the good is originating, please visit http://cbp.gov/linkhandler/cgov/trade/trade_programs/international_agreements/free_trade/korea/korea_fta.ctt/korea_fta.pdf

Deringer Logistics Consulting Group has seen an increase in CBP requests for supporting documents prior to duty refunds.  

The ports of Los Angeles and Long Beach will resume operation today after an 8-day labor strike.  Striking harbor clerks reached a tentative deal with management late Tuesday, December 5, allowing the area’s longshoremen, who had refused to cross picket lines, to also resume work. The strike began last Tuesday and shut down 10 of 14 terminals.

A tentative agreement was reached just as federal mediators arrived on the scene to help the parties reach a settlement.  The primary concern that led to the work interruption was job outsourcing.  Under the proposed new contract, management has agreed not to outsource.  The proposed contract is retroactive to 2010 and expires June 30, 2016.

The strike caused at least 18 cargo ships to re-route their course to Northern California, Mexico, and Panama. Meanwhile, other vessels anchored outside the port are waiting to unload their containers.  The strike cost the region an estimated $8 billion.

As the backlog of waiting cargo is cleared up, Deringer will continue to provide updates.  Please contact the Deringer Customer Service Center managing your shipments to LA/Long Beach for specific updates.

In a preliminary step toward fulfilling the Beyond the Border Initiative between the United States and Canada, US Customs and Border Protection (CBP) has increased the value threshold of shipments that qualify for informal entries.  Currently, informal entries are limited to merchandise valued at up to $2,000.  Effective January 7, 2013, the limit will be increased to $2,500. The change is being made in an effort to help mitigate the effects of inflation and ease the flow of trade. Informal entries are desirable because they eliminate the need for a surety bond, the shipping process is expedited, and they reduce the Merchandise Processing Fees (MPF) to $2 (when MPF is applicable).  In addition to the higher value threshold, CBP also eliminated language pertaining to the requirement that certain quota-eligible textile articles be filed with a formal entry because absolute quotas under the Agreement on Textiles and Clothing were eliminated.

The final ruling can be read in the Federal Register. For help determining if merchandise is eligible for informal entry, please contact your local Deringer Customer Service Center.

As shippers recover from the recent strike at the Ports of LA/LB, another work stoppage looms ahead for the East and Gulf Coast ports in the US, if the USMX and the ILA fail to reach a contract agreement by December 29, 2012. For the past nine months, negotiations have failed to produce a new contract to address the concerns of both parties. Disputes over the contract have primarily focused on efficiency and productivity improvements that would result in cost savings for the USMX. The two parties will return to the bargaining table on Monday. However, unless there’s a short-term extension, sources at the ILA and USMX agree a strike is likely.

Failure to reach an agreement by the December 29th deadline will result in a shutdown and have an adverse effect on the US economy. As we near the deadline, Deringer advises shippers to consider alternative strategies to avoid disruptions to their supply chains. Prepare for the potential of Force Majeure for freight already on the water destined for East Coast or Gulf ports.

• Consider re-routing import and export freight through Canadian or West Coast ports, though some delays can still be anticipated as those ports will be inundated with cargo subject to Force Majeure.
• Plan to book early. Importers should work with overseas suppliers to project the availability of goods 21 to 30 days out, well in advance of goods being delivered to the overseas port.  Loading delays can be expected overseas unless plans are made beforehand.  

Deringer will continue to monitor the situation closely and provide updates, as necessary.  Please contact your local Deringer Customer Service Center for questions or to make alternate booking arrangements.

US Customs and Border Protection (CBP) has recently issued an advisement regarding drawback claims on imported goods that were damaged or destroyed due to Hurricane Sandy.  If duties and taxes were paid and the goods were either exported or destroyed, the goods may qualify for a duty drawback refund under 19 U.S.C § 1313(c).

Importers seeking to claim drawback will be required to provide documentation to US CBP with details about the condition of the merchandise, as well as any insurance claims filed. Please note that if the importer has been reimbursed for duties and taxes via an insurance claim, the merchandise is not eligible for drawback.

For additional information please refer to CSMS #12-00535 or send your inquiries to consulting@anderinger.com.

Import General Rate Increases (GRI)
Although importers are realizing some contraction in the base rates of ocean import carriage, many carriers still plan to implement General Rate Increases (GRIs) effective December 15, 2012.

Origin: North and South Asia, India, and Oceania
Destinations: Dry cargo destined for the US, Mexico, and Canada

West Coast
US$320 / 20'
US$400 / 40'
US$450 / 40'HQ
US$506 / 45'

East/Gulf Coast & IPI
 US$480 / 20'                                                              
 US$600 / 40'                                                              
 US$675 / 40'HQ                                                            
 US$760 / 45’

Export General Rate Increases (GRI)
Beginning January 1, 2013, ocean carriers have announced the following export GRIs.

Canada Exports to the Far East
US$80 / 20’
US$100 / 40’ STD/HC
US$130 / 45’

US Exports to the Middle East
US$75/20’
US$150/40’ STD/HC

US Transpacific Reefer Exports
$1,500/reefer

Congestion Surcharge in LA/Long Beach
In the wake of the ILWA shutdown that lasted 8 days, some ocean carriers are imposing port congestion charges for cargo moving through the ports of LA/Long Beach from December 10 through December 28, 2012.

US$160 / 20’
US$200 / 40’

On December 6, 2012, the Ways & Means Trade Subcommittee Chairman Kevin Brady introduced U.S. House Bill 6642, the Customs Trade Facilitation and Enforcement Act of 2012.  It is the intent of the bill to provide “direction on how to allocate resources, streamline trade, improve enforcement, and measure progress within the Bureau of Customs and Border Protection…to move the ever increasing volume of legitimate trade more efficiently.” The draft legislation law has provisions which propose to address organizational issues, reduce paperwork, and create uniformity throughout the entry process.  Importers will be interested in several key provisions including:

• CBP must engage all 48 agencies which currently have regulatory responsibilities regarding imported goods and are ITDS participants to take action on electronic information sharing by March 31, 2013.
• Codification of the Centers of Excellence and Expertise program which will centralize the processing of high profile industry sectors by teams of experts within the Customs service.
• Require the establishment of a Certified Import Program by December 30, 2014.
• Raise the informal entry and de minimis amounts.
• Creation of an importer of record program with guidelines for assigning IOR numbers to ensure accuracy of data and prevent identity fraud.
• Authorization of funding to complete CBP’s ACE entry system with deadlines and reporting requirements.
• Enhanced enforcement of U.S. trade laws including IPR and ADD/CVD.

The complete bill can be viewed by clicking on the links below:

Customs Trade Facilitation and Enforcement Act
Bill Section by Section
Two Page Bill Summary

Deringer will continue to track and report on the progress of the bill in 2013.

This year, the US Food and Drug Administration (FDA) updated its food facility registration requirements. Under the new guidelines, food facilities must renew their registrations every two years between October 1 and December 31. Registration renewals began this year, which means renewals will be necessary on even-numbered years going forward. Since FDA’s online renewal process was not available until mid-October, they have extended this year’s deadline to January 31, 2013.

This initiative is an update to FDA’s Food Safety Modernization Act (FSMA) that requires the registration of companies that manufacture, process, pack, or hold food for human or animal consumption in the US. Additional information regarding this requirement can be found on FDA’s website or a synopsis of the original announcement can be found on Deringer’s website.

Canada Border Services Agency (CBSA) is implementing the final step requiring Canadian importers to provide the full Harmonized System Code on all goods.  Effective January 1, 2013, the full 10-digit HS Code must be provided on commercial/Canada Customs Invoices used for entries transmitted to CBSA for release.   Importers and their shipping partners are advised to take great care in determining the appropriate 10-digit HS Code prior to supplying A.N. Deringer, Inc. with the commercial invoice.

For guidance in determining the appropriate 10-digit HS Code, please contact Deringer’s Compliance Department.  

Contract discussions broke off abruptly today between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX). Today’s negotiations were part of a last-minute effort to reach a compromise between the parties over a contract that has already been extended once for 90 days and now expires on December 29.  One of the last sticking points is regarding container royalties.  The ILA stated they would postpone the strike until February 1, 2013, if USMX would agree to take the topic off the table.  When USMX refused, the talks abruptly ended which puts the ILA on course for a December 29 strike.

If an ILA strike occurs, it will effectively shut down ports along the East and Gulf Coasts of the US.  With those ports shut down, Canadian and US West Coast ports will be backlogged with overflow cargo, as well as shipments subject to Force Majeure.  Carriers are also threatening additional surcharges.

Deringer will continue to monitor the situation and provide updates.  Please contact your local Deringer Customer Service Center for questions.

The International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) have reached a tentative agreement on the issue of container royalty payments, which was one of the major sticking points in the contract negotiations. The tentative agreement means a strike affecting ports throughout the US East and Gulf Coasts will be averted for now, as the parties have agreed to a 30 day extension of midnight on January 28, 2013. According to the Federal Mediation and Conciliation Service (FMCS), the federal party helping to broker the deal, the parties will return to the bargaining table and continue to work on the remaining issues.  A statement from FMCS read “the agreement on this important subject represents a major positive step toward achieving an overall collective bargaining agreement.”

The United States Department of Agriculture’s Animal and Plant Health Inspection Service (USDA-APHIS) announced in 2012 a plan to lift the exemption of Canadian imports from the International Standards for Phytosanitary Measures (ISPM No. 15).  The change will require wood packaging materials (WPM) moving from Canada to the US to meet ISPM No. 15 requirements, including the necessary markings on the WPM.  However, the final regulation lifting the ISPM  No. 15 exemption is still not approved, and with minimal communication and implementation efforts made in the trade, it is unlikely any action will be taken prior to 2014. Similarly, implementation of Canadian directive D98-08 Entry Requirements for Wood Packaging Material into Canada is also delayed while US and Canadian authorities determine how to implement the requirements at the border.

USDA-APHIS and the Canadian Food Inspection Agency (CFIA) have advised that a statement of origin for unmarked WPM should still be indicated on shipping documents to avoid delays. This recommendation is especially important for shipments containing goods with countries of origin other than the US or Canada and/or shipments that include any unmarked WPM. If authorities are unable to identify the origin of the WPM, shipment delays will likely occur. CFIA provided the following examples of appropriate statements to include on shipping documents for imports/exports between the US and Canada that include WPM:

• "the unmarked wood packaging in the shipment is of Canadian origin"
• "the unmarked wood packaging in the shipment is of Canadian and US origin"
• "the unmarked wood packaging in the shipment is of US origin"
• if all of the WPM (in a shipment) is unmarked, shippers could more simply state, as applicable: "the wood packaging in the shipment is of Canadian origin".

Deringer will continue to provide updates regarding WPM requirements to and from the US.  Please direct questions to compliance@anderinger.com.

The US Department of Agriculture’s (USDA) Agricultural Marketing Service (AMS) announced the agency is seeking comments on an assessment fee proposed on the manufacture and import of paper and paper-based packaging. The proposed assessment would impact four segments of the paper industry including printing and writing paper (except newsprint), kraft packaging paper, containerboard, and paperboard.  Carbonless paper is excluded from the proposal. Importers and domestic manufacturers of these products would incur an assessment of 35 cents per ton (2,000 lbs).  Companies producing or importing less than 100,000 tons annually would be exempt from the assessment. According to 2011 data provided by US Customs and Border Protection, imports subject to the program totaled 7.5 million short tons. Of that amount, approximately 59% was from Canada, 22% from Western Europe, 10% from China, Japan, and the Far East, and the remainder from other countries.

According to the proposed rule, the assessment would fund the Research and Promotion Program intended to “maintain and expand markets for paper and paper-based packaging.” Prior to the rule going into effect, a referendum would be held among US manufacturers and importers, and voters must also represent a majority of US paper and paper-based packaging manufacturers and importers. The proposed rule, Docket ID AMS-FV-11-0069, can be found online.

Comments on the proposal can be made electronically at http://www.regulations.gov or via mail to the address below.  All comments need to reference the docket number, date and page number of the Federal Register issue.

Promotion and Economics Division,
Fruit and Vegetable Program, AMS, USDA
1400 Independence Avenue SW
Room 1406-S, Stop 0244
Washington, DC 20250-0244

Discussions between the ILA and USMX resume Tuesday, January 15 with federally mediated bargaining in Galloway, NJ. The talks are the most recent effort, in a continuing struggle, to avert a threatened strike. After several contract extensions, the current deadline is February 6.

After walking out last week at the start of a scheduled two day negotiation session, both parties apparently plan to stay longer at the bargaining table with the ILA stating they are prepared for three full days of discussions. This week’s talks will focus on work rules and practices in the union’s supplemental local agreement for the Port of NY and NJ.  The ILA and USMX have stated a coast wide master contract would be contingent on successful negotiation of local agreements. The largest and most contentious of those local contracts is between the ILA and the New York Shipping Association.

The threat of a strike has had a widely divergent impact on cargo volumes at the major East Coast container ports throughout the fall and holiday season. Ports either prepared in advance, in the case of the Ports of New York and New Jersey, or lost business altogether, as with the Port of Savannah. Savannah saw its volumes decline in the fourth quarter as importers diverted cargo to West Coast ports to ensure the continuity of their supply chains before the contract extension ran out in December.

Surprisingly, the Port of Los Angeles reported a more divergent picture. “When we look solely at loaded inbound shipments during the period where importers would have diverted cargo through Los Angeles (July, August, September, October), the volume drops significantly,” said Matt Guasco, East Coast regional representative of the Port of Los Angeles. The ports in between Savannah and New York report less dramatic impact overall.

Another pressing concern for all is the possibility of congestion surcharges levied by the carriers if a strike should occur. Deringer will continue to monitor and report on the situation.

Today, the “Idle No More” movement has planned protests across Canada that may disrupt some highway, rail traffic, and border crossings. The movement is an ongoing protest originating among the aboriginal people of Canada for the purpose of educating Canadians about indigenous sovereignty and treaty rights. Additionally, a group of First Nations people and their supporters, unrelated to the “Idle No More” movements, plan peaceful protests around the Ambassador Bridge area in Windsor, ON, between 11am and 2pm EST tomorrow, which may impact north and southbound truck traffic.

“Idle No More” leaders are planning protests that may cause disruptions to sections of Highway 63 in Alberta, Highway 402 near Niagara Falls, and the 401 in Ontario. Though targeted sites are not known, blockades of CP and CN rail lines are planned throughout the country from east to west. However, other sources are reporting that these plans may not come to fruition since one “Idle No More” co-founder and some indigenous chiefs are distancing themselves from these plans, stating the actions are not in alignment with the spirit of the movement.

Regarding the potential disruption of traffic at the Ambassador Bridge, US Customs & Border Protection (CBP) has stated that operations will remain unaffected during this time. CBP Detroit will continue to process all arriving commercial traffic as appropriate.  CBP provided the following advice:

“If carriers choose alternate points of entry during this time period due to potential delays (i.e. [alternate] POE), please be reminded of the following information regarding e-manifest and the entry transmissions;

• If brokers have already transmitted for release purposes to Detroit as the port of entry (POE), carriers must amend their e-manifest transmission to show the correct port of arrival.
• Carriers should note that if they decide to divert to another POE there is sufficient time to amend the port code to comply with Trade Act submission requirements.”

Beginning on February 1, 2013, if a foreign food facility is required to register with FDA, but fails to do so, food from that facility that is being imported or offered for import into the U.S. is subject to refusal under Section 801(L) of the Food, Drug and Cosmetic Act.  Food facility registrations that were not renewed by January 31, 2013 will be subject to invalidation of registration.  This could result in food shipments (manufactured by those facilities without valid registrations) to be held at the port or refused upon arrival in the U.S.  

We strongly recommend that anyone subject to registration be sure to complete the process before the ending date.  For parties unable to renew an existing registration, due to the lack of a registration Pin number, you will be required to complete a new registration.       

Please note even though your firm’s registration information has not changed, FDA has amended the registration application that requires input from registered parties.

Additional information relative to the FSMA and Food facility registration information may be accessed utilizing the links below:

FDA's Registration of Food Facilities

FSMA Registration

Should you need assistance with your firm’s food facility registration or renewal, please send an email to fda@anderinger.com.

 

Companies engaging in international trade with the US and China are approaching a critical point in the shipping cycle. Chinese and Southeast Asian businesses shut down for their New Year celebration at the beginning of February. While factories stop production around the 5th of February, governmental bodies and companies in the shipping industry will start observing the holiday around February 8th and 9th. Actual dates of observance vary by country but most business resumes around February 18th.

Concurrently, in the US, the ILA and USMX continue negotiations in an attempt to settle on an agreement by the contract expiration of February 6th. Although progress in the talks has been made, there are still major issues on the table.  The stakes are high with labor strikes from Maine to Texas hanging in the balance.

Matt Parrott, Director of Transportation, commented, “In regard to the ongoing contract negotiations, there are a lot of shippers’ livelihoods on the line if a strike occurs. Between the upcoming Chinese New Year down time and the contract talks, the industry is on pins and needles.”

Deringer will continue to report on the issue.

The International Longshoremen’s Association and the United States Maritime Alliance have reached a tentative agreement, bringing the contentious contract negotiations closer to a final deal.  Late Friday night, the Federal Mediation and Conciliation Service announced in a statement that the six-year master contract agreement was tentatively reached but was subject to the “ratification procedures of both parties”, as well as agreements being reached at a number of local union negotiations. The master contract covers ports along the East and Gulf Coasts of the US; however, the local agreements cover work rules and issues at the port level.  According to Friday’s statement, “the local negotiations are ongoing and will continue without interruption to any port operation.”

On February 1, 2013, the United States Department of Agriculture, Food Safety Inspection Service (FSIS), announced new guidelines governing the importation of meat and meat products.  According to the bulletin, “the guide articulates which products and FSIS sampling and testing programs are subject to this policy”.  The program known as “test and hold” has a major impact upon product being exported to the United States and upon the importers of record for these transactions.  These shipments must report to an inspection establishment for reinspection and release by the FSIS prior to entry of the product into the commerce of the U.S.  According to the newly proposed rules, the importer of record will ultimately be held responsible for the disposition of merchandise which is subjected to an intensified exam and test sampling.  The FSIS will only allow these shipments to be removed from the inspection establishment upon receipt of assurances that the “importer has controls in place that will ensure that product does not enter commerce until the importer of record receives notification of acceptable test results”.  The notice goes on to further state, “Importers of record are to maintain the integrity of the lot and may use any effective mechanism to control the product, including the use of company seals.”  

The FSIS is especially concerned regarding the disposition of the goods once they are allowed to leave the inspection facility.  To that end, the importer must retain legal title to the merchandise to ensure that the goods are under its control.  Failure to do so could result in further action by the FSIS:

“If the movement of product results in a change of ownership from the importer of record that presented the product for FSIS reinspection at the official import inspection establishment to any other entity prior to receipt of laboratory results, or if the importer of record relinquishes ownership of the product before receiving the laboratory results, then the product is considered to have entered commerce. Both of these actions are violations of the test and hold provision. Therefore, the product may be subject to redelivery by Customs and Border Protection (CBP) or local Customs authority and to any fines or penalties imposed by such authority, as well as to enforcement actions by FSIS.”

Importers of record are advised to review the structure of their sales to identify when transfer of ownership occurs during the import process.  If the U.S. party takes legal ownership of merchandise subjected to these conditions, the goods are automatically in violation regardless of the eventual results of testing.  This could lead to redelivery and liquidated damages (fines) to be imposed by U.S. Customs and Border Protection.  

The new guidelines will go into effect on February 8, 2013, although a 60 day period has been allowed for further comment.  The full text of the bulletin and details on where to file comments are available at the link provided below.  

FSIS Compliance Guideline for Controlling Meat and Poultry Products Pending FSIS Test Results

In 2011, the US Food and Drug Administration (FDA) introduced the Food Safety Modernization Act (FSMA); an act that includes the widest sweeping regulations to be introduced in the food industry since the Food Bioterrorism Act of 2002. One of the most noteworthy rules included in the Act allows FDA to administratively detain food for human or animal consumption if there is reason to believe the food has been adulterated or misbranded. This interim final rule was accepted without change on February 5, 2013.

Prior to the rule’s implementation, the FDA was only able to detain goods if there was credible evidence that the food products posed a serious health risk. Furthermore, the agency can now hold products out of the marketplace for up to 30 days while it determines if further enforcement action, such as seizure, is required.  While the interim final rule went into effect in July 2011, the final rule’s adoption without change is a firm testament to the gravity and significance given to FSMA regulations.

Sequestration budget cuts taking effect on March 1st will impact many US government agencies, including those that regulate international trade. In a February 22nd conference, US Customs and Border Protection (CBP) announced that they will cut back on overtime, which will result in longer wait times at all ports of entry and a slowdown in trade processing. Additionally, CBP employees will be forced to take off one of every ten days, equating to a 10% reduction in staff for all services at all times. The agency anticipates that wait times will double, with cargo exams taking up to, or more than, five days.

CBP’s focus on security will remain steadfast; however, they will also focus on core processing for cargo and travelers qualified under the trusted trade programs. Many other departments and agencies that regulate trade will also be impacted by sequestration. Some of those affected are Food Safety & Inspection Service, Bureau of the Census, Environmental Protection Agency, Food & Drug Administration, Consumer Protection Safety Commission, Alcohol & Tobacco Tax & Trade Bureau, and the Transportation Security Administration.

Following sequestration, trade organizations are anticipating significant communication from government agencies. Deringer will continue to monitor and report on this issue, as well as provide as much guidance as possible. Additional details regarding sequestration can be found in the OMB Report Pursuant to the Sequestration Transparency Act of 2012.

The mandatory phase of Canada Border Services Agency’s (CBSA) Advance Commercial Information (ACI) eManifest program has been postponed from May 1, 2013, to the fall of this year.  The ACI eManifest regulation requires carriers bound for Canada to electronically submit data in advance of their arrival at the border. Once the mandatory phase begins, carriers that do not submit an electronic ACI transmission will be subject to penalty. The ACI eManifest program is being implemented to help CBSA identify potential threats to Canada, while helping to move low-risk shipments expeditiously across the border. Additional details regarding the ACI eManifest requirements are available on CBSA’s website.

If you are a carrier or a company with trucks that travel into Canada, please ensure you are prepared for CBSA’s ACI eManifest. Although the mandatory phase has been postponed until fall, please be aware that CBSA has been fielding an extremely heavy volume of applications and inquiries over the past six months. If you have not yet submitted an application, we strongly advise you to start the process. For information about Deringer’s ACI eManifest services, please send an email to emanifest@anderinger.com.

Effective May 1, 2013, various ocean carriers have advised they will implement a new General Rate Increase (GRI) for cargo destined to all points in the US and Canada from Far East and Indian origins. This GRI represents a significant increase from current rates. Deringer will work with its partners and carriers in an attempt to mitigate the new GRI, but customers should anticipate an increase. Please contact your local Deringer representative for more information. 

West Coast
$640 USD per 20’
$800 USD per 40'
$900 USD per 40’HC
$1,015 USD per 45'

East Coast
$800 USD per 20'
$1,000 USD per 40'
$1,125 USD per 40’HC
$1,270 USD per 45'

MLB/IPI Locations
$960 USD per 20’
$1,200 USD per 40'
$1,350 USD per 40’HC
$1,520 USD per 45'

The General Rate Increase (GRI) originally announced for May 1, 2013, to all points in the US and Canada from Far East and Indian origins, has been postponed until May 21, 2013.

As previously reported, this GRI will represent a significant increase from current rates. Deringer will work with its partners and carriers in an attempt to mitigate the new GRI, but customers should anticipate an increase. Please contact your local Deringer representative for more information. 

West Coast
$640 USD per 20’
$800 USD per 40'
$900 USD per 40’HC
$1,015 USD per 45'

East Coast
$800 USD per 20'
$1,000 USD per 40'
$1,125 USD per 40’HC
$1,270 USD per 45'

MLB/IPI Locations
$960 USD per 20’
$1,200 USD per 40'
$1,350 USD per 40’HC
$1,520 USD per 45'

The General Rate Increase (GRI) announced by ocean carriers last month will be less than initially anticipated. The GRI goes into effect on May 21, 2013, and will be imposed on cargo bound to all points in the US and Canada from Far East and Indian origins. Originally, the GRI was slated for effect on May 1, 2013. The revised rates are found below.

West Coast
$320 USD per 20’
$400 USD per 40'
$450 USD per 40’HC
$506 USD per 45'
$8 USD w/m

East Coast
$480 USD per 20'
$600 USD per 40'
$675 USD per 40’HC
$760 USD per 45'
$12 USD w/m

MLB/IPI Locations
$480 USD per 20’
$600 USD per 40'
$675 USD per 40’HC
$760 USD per 45'
$12 USD w/m

If you have any questions regarding the GRI, please contact your Deringer representative.

The Automated Commercial Environment, most often called ACE, is US Customs and Border Protection’s (CBP’s) automated system, and CBP is migrating all of their processing over to it. CBP has announced they intend to mandate the filing of entry summaries in ACE, as opposed to its legacy system ACS (Automated Commercial System), by December 31, 2016.

Right now, entry summaries filed in ACS are translated over to ACE and reviewed and processed by CBP in ACE.  In short, CBP already lives in ACE.  ACS users have noted discrepancies between what they see when they run ACE reports in the ACE portal compared to data in their own systems.  This is due to the translation process and the non-automated post entry corrections allowed for ACS entries. If an importer files her entries in ACE initially, there is no translation of data from ACS to ACE. Therefore, ACE-generated reports accurately reflect what was filed and what is contained in CBP’s system of record.  

When an importer transfers a summary filing over to ACE, the transfer is completely seamless for the importer who is using the services of a broker--with one exception.  All post summary corrections must be completed in ACE if the initial filing was an ACE entry summary; therefore, quarterly post entry amendments (PEA) are no longer an acceptable practice if an entry summary was filed in ACE.  Any Automated Broker Interface (ABI) ACE enabled filer, authorized by the importer of record, can submit a PSC (post summary corrections) in ACE whether or not that filer was the initial entry filer.  For example, if an entry summary was initially filed in ACE by another broker, Deringer can still submit a PSC for that entry if authorized by the importer.

Because ACE is not fully developed, CBP continues to roll out additional functionality.  Notably, Simplified Entry (SE) which is currently in a pilot stage, allows an authorized broker to file release data well in advance of the loading of air cargo, and the filer receives release messages well in advance of the air cargo’s arrival. An advantage of SE is that the importer can schedule ongoing transportation with greater certainty. Although few brokers have been approved for SE, Deringer is SE enabled and continues to work with CBP throughout the pilot.

CBP is also rolling out a more robust Document Imaging System (DIS) which will allow for the movement of various documents including the commercial invoice and other government agency required documentation in advance of the arrival of cargo. This allows CBP and OGA officials to review documentation earlier in the process and make release determinations based on document review, rather than physical examination which might otherwise have been required.  This document review can occur well in advance, resulting in more rapid release upon arrival.

SE is available in the air mode at this time. As CBP continues to develop the program, it will become the official release process in ACE.  CBP is currently working on improving SE by allowing SE for split shipments.  As soon as that functionality is available, we will strongly encourage our air shippers to move to SE; however, we cannot move to SE unless we file the entry summary in ACE.  We see a lot of advantages in SE’s future when CBP allows for split shipments.  We want to encourage our clients to move to ACE now so that when CBP makes the promised programming changes, our clients are ready.  CBP is preparing SE for the vessel mode as well, and we expect this functionality to be available before the end of 2013.  There are clear advantages to using this functionality in the vessel mode.  However, until our clients’ summaries are filed in ACE, they cannot avail themselves to the advantages of SE.

When CBP mandates the transition to ACE, there will be fewer resources available at CBP to assist those filers and importers who waited until the last minute to make the transition.  Because ACE is still in development, and because CBP is encouraging filers to make the transition now, CBP has been extremely accommodating to Deringer and Deringer customers because we have been moving clients to ACE since inception.  As with any new system, when unexpected events occur, CBP has been willing to help us research and discover whether or not issues are ACE related or filer related.  This dialogue with CBP has helped us develop expertise in ACE and assisted us in ensuring our clients’ files are processed as expected.  Unfortunately, if too many companies hold back from transitioning to ACE, we won’t be able to expect the same level of service from CBP.

The primary advantage of ACE right now is that when entries and all PSCs are filed in ACE, the data in our system and CBP’s match so that any ongoing entry changes due to reconciliation or drawback are more accurate.  It also means they require less research because the entry has been updated in ACE as changes have been made during the entry’s life cycle.  When quarterly PEAs are filed, they must be manually reconciled before a reconciliation entry or drawback can be filed because the quarterly PEA changes have not been entered into CBP’s system.

Transitioning to ACE is not an “if” situation; it is simply a matter of when an importer is ready to make the transition.  Because the only significant change our clients will experience is the disabling of the quarterly PEA and mandatory ACE PSC for any post summary correction, most clients don’t even recognize when we start filing their entries in ACE.  Deringer foresees great benefits from SE, so we encourage clients to make the transition to ACE filing now. Please send an email to compliance@anderinger.com for additional guidance or information.

US Customs and Border Protection (CBP) issued a Cargo Systems Messaging Service (CSMS) message today announcing that on July 9, 2013, they will begin full enforcement of the Importer Security Filing (ISF) regulation and will commence issuing liquidated damages against ISF importers and carriers for non-compliance.

Since the ISF interim final rule was published by CBP in 2008, CBP has employed a phased approach to enforcement to minimize supply chain and port operations disruptions, while working with the trade community to attain compliance through its issuance of ISF Progress Reports.

Importers and carriers who are non-compliant can expect CBP to assess liquidated damages for Importer Security Filings that are incomplete, inaccurate, or late. First time violators will be assessed liquidated damages in the amount of $5,000 and up to $10,000 for subsequent violations.

For additional information regarding ISF requirements, please visit Deringer’s ISF webpage, CBP’s ISF webpage, or send questions to security_filing_general@cbp.dhs.gov. If you would like information about Deringer’s ISF solutions, please call 888-612-6239 or send an email to marketing@anderinger.com.

Ocean carriers are imposing a General Rate Increase (GRI) on cargo bound to all points in the US and Canada from Far East and Indian origins. The GRI is anticipated to take effect on July 1, 2013, but it has been postponed several times since May. Some industry sources have indicated they are unsure if the GRI will be postponed again or if rates will be mitigated. The rates currently anticipated are found below.

West Coast
$320 USD per 20’
$400 USD per 40'
$450 USD per 40’HC
$505 USD per 45'
$8 USD w/m

East Coast/MLB/IPI Locations
$480 USD per 20'
$600 USD per 40'
$675 USD per 40’HC
$760 USD per 45'
$12 USD w/m

Deringer values your partnership and appreciates your support. If you have any questions regarding the GRI, please contact a Deringer representative.

In an atypical move, ocean carriers are implementing different effective dates for the previously announced General Rate Increase (GRI) being imposed on US/Canada bound cargo from India and the Far East.

UASC and PIL have postponed the GRI to July 15th, while other carriers—OOCL, K-line, CMA, and MSC—have confirmed today (July 1st) as the effective date for the GRI. Meanwhile, Hanjin made the GRI effective today for US bound freight, but postponed the GRI to July 15th for Canada bound cargo and NYK has postponed the GRI until August 1, 2013, but only for cargo from the Indian sub-continent.

Please contact a Deringer representative to determine the impact of the GRI on your inbound freight. Thank you for your cooperation.

Effective August 19, 2013, the Traffic Mitigation Fee (TMF) at the ports of Los Angeles and Long Beach will increase $5 to $66.50 per TEU or $133 per FEU. The TMF proceeds help offset the cost of operating PierPass OffPeak gate hours, which are night and Saturday marine terminal shifts established to reduce traffic congestion during peak hours. The 8% TMF increase will address rising maritime labor costs at the ports.

Currently, 55 percent of the ports’ container traffic is handled through OffPeak gates. For more information, please contact a Deringer representative or visit www.pierpass.org.

On the heels of the recent GRI announcement by trans-pacific ocean carriers comes a peak season surcharge (PSS). Effective August 1, 2013, ocean bound cargo destined for all points in the US and Canada from the Far East and India will be subject to the below PSS.

$320 USD per 20’
$400 USD per 40'
$450 USD per 40’HC
$505 USD per 45'
$8 USD w/m

Previously quoted rates may be subject to the above PSS. If you have questions or would like additional information, please contact a Deringer representative. Thank you for your cooperation; we value your partnership.

The Generalized System of Preferences (GSP) trade program, which impacts US imports from many countries, the Andean Trade Preference Act (ATPA), and the associated Andean Trade Promotion and Drug Eradication Act (ATPDEA) will expire July 31, 2013. The US House and Senate have introduced bills (HR 2709 and S1331) to extend GSP to September 2015, and there is hope that the bill will move swiftly through Congress for passage before GSP expiration. In the past, the program has expired nearly a dozen times, been renewed and made retroactive. Currently, neither bill contains language regarding retroactivity.

In the event Congress does not renew GSP before its expiration, US Customs and Border Protection (CBP) CSMS #13-000348 provides guidance for handling GSP-eligible shipments.

• Importers should pay the normal trade relations (column 1) duty rate at the time of entry but flag imports eligible for GSP with the applicable special program indicator (SPI) (i.e. “A” or “A+”).  Flagging imports with SPI will help facilitate duty refunds if the program is retroactively renewed.
• CBP did not provide procedural guidance for flagging goods eligible for the Andean Trade Preference Act (ATPA) and Andean Trade Promotion and Drug Eradication Act (ATPDEA).
• Goods also eligible for the African Growth and Opportunity Act (AGOA) may continue to receive duty preference. Eligible tariff items should be indicated with SPI “A”, “A+” or “D”.
• The GSP expiration has no impact on the payment/non-payment of the Merchandise Processing Fee (MPF).

Deringer will continue to provide updates regarding the renewal of GSP, ATPA, and ATPDEA. Please contact a Deringer representative with any questions.

The 2006 Softwood Lumber Agreement (SLA) outlines the export tax rate on Canadian softwood lumber products going to the US. The prevailing monthly price has triggered the export tax rate to increase. Effective August 1st, 2013, softwood lumber from the following provinces in Canada is affected:

• The export tax from British Columbia, for both the coastal and interior regions, will increase from 0 to 10%.
• From Alberta, the export tax rate will also increase from 0 to 10%.
• From Saskatchewan and Manitoba, the export tax rate changes from 0 to 3%.
• From Ontario, the export tax rate will be raised to 3.1%.
• From Quebec, the export tax rate will be raised to 5.6%.

The originating region within Canada of the softwood lumber products being exported to the US determines the export tax rate. The region of origin is defined as where the product underwent first primary processing. These regions are further defined below:

Option A regions: The British Columbia (BC) coast, BC interior and Alberta
Option B regions: Saskatchewan, Manitoba, Ontario and Quebec

Where sawlogs are harvested in an Option A or an Option B region and undergo first primary processing in a region whose exports are excluded, the resulting softwood lumber product is deemed to have been exported from the Option A or Option B region.

More information can be found on the Canada Revenue Agency website.

In regard to the Lacey Act, the Animal and Plant Health Inspection Service (APHIS), a division of the U.S. Department of Agriculture (USDA), published an interim final rule providing definitions for the terms “common cultivar” and “common food crop”. Common cultivars and common food crops are exempt from the requirements of the Lacey Act. However, the Act previously left these terms undefined, leaving interpretation to the authority of the USDA and the US Department of the Interior. The “illustrative list”, published by APHIS, gives examples of commodities (whole plants, parts, derivatives, and products) that meet the criteria to be considered common cultivars or common food crops—and are thus exempt. Wild specimens would not be exempt as they would not qualify as a common cultivar or common food crop. APHIS states that additional examples may be added if it is deemed that they qualify.

Earlier this week, the US Food and Drug Administration (FDA) published a proposed rule to implement the Foreign Supplier Verification Program (FSVP) and Third-party Auditor Accreditation. Both of these measures are part of FDA’s Food Safety Modernization Act (FSMA). The rules require the importer or its US agent to provide assurances that imported food meets FSMA standards. Failure to comply with FSMA would result in denial of the goods’ entry into the US and/or admissibility to participate in FDA’s voluntary qualified importer program (VQIP), a program under development that would help expedite the review and entry of food into the US.

The FDA has provided a 175-page guidance document that details the FSVP would-be requirements. The document clearly articulates that the importer, or its US agent, would bear the responsibility for ensuring the safety of the imported food. Some of the specific FSVP regulations, found in the rule, bind importers or their US agents to:

• Understand the compliance of their suppliers, including if they have received FDA warning letters, alerts, or fall under the authority of the Food, Drug and Cosmetic Act
• Study the risks associated with each food intended for import, as well as the scope of possible illness or injury
• Audit foreign suppliers by conducting site visits, testing and sampling, and safety records review
• Retain list of foreign suppliers and create written procedures for ongoing verification
• Establish procedures for researching and responding to complaints
• Review and update FSVP every three years or more often if issues occur
• Procure a DUNS number to be provided with entries
• Keep records to demonstrate FSVP compliance

Some imports would be exempt from FSVP requirements. In particular, goods subject to the purview of other regulatory authorities and regulations would enjoy some exceptions to the rule. Examples of these products are juice and seafood facilities (already subject to HACCP), food for personal consumption, dairy products in compliance with current good manufacturing practice (CGMP) regulations, low-acid canned foods, alcoholic beverages, transshipped food, and importers with less than $500,000 in annual sales.

The government authority also authored a 217-page tenet on Accreditation of Third-party Auditors. Third-party auditors would be authorized to conduct on-site audits and verifications, unless an importer has a qualified staff member available. The document details the requirements and conditions regarding FDA’s use of accredited auditors in determining admissibility of food bound for import into the US. The rule further outlines the requirements for FDA to recognize the accrediting organizations and third-party auditors.

Deringer will monitor the progress of the proposed rule as it moves toward possible approval. If you have questions regarding FSMA, please send an email to compliance@anderinger.com.

Effective August 1st, most major ocean carriers imposed a widely divergent peak season surcharge (PSS). While the PSS was already implemented in most cases, the carriers are still assessing the market strength. A few carriers, such as K-Line and OOCL, are waiting until August 15th to make the PSS effective on some routes; however, others say they will review the newly implemented PSS mid-month. Deringer is working with carriers and agents to mitigate the PSS.

West Coast
$120-160 USD per 20’
$150-200 USD per 40'
$150-200 USD per 40’HC
$190-250 USD per 45'

East Coast/IPI/RIPI
$120-320 USD per 20’
$150-400 USD per 40'
$150-450 USD per 40’HC
$190-505 USD per 45’

Ocean lines also intend to impose a September 1st general rate increase (GRI) for eastbound cargo from the Far East and India to the US and Canada.

West Coast
$320 USD per 20’
$400 USD per 40'
$450 USD per 40’HC
$505 USD per 45'
$8 USD w/m, $8 USD min

East Coast/IPI/RIPI
$480 USD per 20’
$600 USD per 40'
$675 USD per 40’HC
$760 USD per 45’
$12 USD w/m, $12 USD min

Deringer will continue to monitor communications from the steamship lines and will provide additional information when it becomes available. Deringer appreciates your support. Please contact your Deringer representative for specific information regarding your shipments.

Effective August 1, 2013, the government of China changed its Value Added Tax (VAT) pilot program. The tax is due on the “transportation and modern services sector,” applicable on all prepaid transportation in China. The VAT was expanded nationwide throughout China and amounts to a 6% addition to regular charges.  The new policy is reflected in China’s Circular 37 of Cai Shui [2013].

As with other charges, Incoterms determine who is responsible for paying the VAT. For US imports from China, the US importer bears the financial responsibility under EXW and FCA; but when the master bill of lading is collect, the VAT only applies to pre-carriage within China, not ocean freight. Under the terms CIF, CFR, CPT, and CIP, buyers can expect that suppliers will likely add the tax onto their base price. For exports to China from the US, the US exporter bears the cost under DAP and DDP terms.

There is still some confusion regarding the applicability of the tax and clarification is being sought. Deringer will continue to monitor the situation and will advise if changes occur.

The US Food and Drug Administration (FDA) has announced an increase of its potential fiscal year 2014 fees for import reinspections, domestic and foreign facility reinspections, and recall activities performed by the FDA. The 2014 fees increase from $221/hour to $237/hour for domestic services and from $289/hour to $302/hour for foreign travel.

The new fees are effective October 1, 2013, through September 30, 2014. The fees may not actually be assessed during this period because FDA does not intend to issue invoices until two guidance documents are published. One document would address the economic concerns of small businesses in regard to the fees and the other is regarding assessment and collection of the importer reinspection fees.

About the Fees
Importers may incur facility reinspection fees under FDA’s Food Safety Modernization Act (FSMA) following the implementation of corrective actions at a food facility or when a previous inspection of a food facility  results in a final classification of Official Action Indicated. Under FSMA, FDA may assess recall fees when recalls are not initiated when ordered by the FDA, the recall was not conducted as specified by the FDA, or a food facility does not provide enough information regarding the recall. Generally, the import reinspection fee is assessed by FDA under four circumstances: 1) action on a reconditioning request; 2) action on a request for admission of a food stuff that has been detained; 3) action on a request to remove a product from import alert, or 4) action on a request for destruction.

More information about the 2014FY FDA fees is available in the August 2nd Federal Register, Vol. 78, No.149 or by sending an email to compliance@anderinger.com.

Many ocean carriers are postponing the general rate increase (GRI) and peak season surcharge (PSS) previously announced on cargo bound to Canada from the Far East. Originally, the effective date of the fees were mid-August but were later postponed to September 1st. The revised tentative date is September 15th, 2013, while carriers continue to assess market strength.

On eastbound cargo from the Far East and India to the US, carriers implemented the PSS in August and are making the GRI effective throughout September. The GRI and PSS for cargo bound for either Canada or the US have been widely divergent by lane and carrier.

Deringer will continue to monitor communications from the steamship lines and will provide additional information when it becomes available. Deringer appreciates your support. Please contact your Deringer representative for specific information regarding your shipments.

On August 27, 2013, US Customs and Border Protection (CBP) published Federal Register Volume 78, Number 166 announcing a test regarding the manifesting and entry of residue found in Instruments of International Traffic (IIT).  CBP will also begin enforcement of HQ Ruling H026715, dated June 19, 2009, which requires importers to make entry on containers with residual cargo. The test and enforcement of HQ Ruling H026715 go into effect November 25, 2013. The ruling makes it unacceptable to manifest IIT containers as empty if they contain residual cargo. Container contents will now need to be classified, entered, and manifested.

Feedback received from the trade found that manifesting and making entry of residual cargo under current practices would be overly burdensome. CBP initiates this test with feedback from the trade to determine a less onerous means of manifesting and entering residual cargo. However, the test must still ensure the safety and security of the transportation of IITs and CBP officers working in close proximity to them.

The year-long test allows for a new type of entry made from the manifest using an indicator identifying it as a Residue Entry. CBP will use this method to capture residue in containers entering the US that will be cleaned or refilled. Parties that refrain from participating in the test will be required to classify, enter, and manifest the residual cargo in accordance with the underlying statues. After the first 90 days of the test, CBP will evaluate its initial findings.
Following industry standards, CBP is using the following residue limit guidelines to determine when a residue entry may be filed. To file a residue entry, the following limits apply to the weight and volume of the container’s total capacity and are set by mode of transportation: Rail has a limit of not more than 7%, air may not exceed 5%, and truck and vessel may not exceed 3%.

Containers arriving without residue must be manifested as an empty IIT and entry is not required. If the IIT contains residual cargo that has no commercial value, the IIT will be cleaned in accordance with the law (i.e. the residue will be destroyed or the IIT will be refilled for export). CBP will then accept declarations from the carrier or importer of record that the residue has $0 value and the country of origin is the country from which the IIT is arriving, will require the residue to be described up to the 6-digit HTSUS, and will require a residue entry designating the residual cargo has no commercial value. No merchandise processing fee will be due as the merchandise will fall under the low value mechanism of 19 USC 1321.

Comments concerning this notice or any aspect of the test may be submitted via email, with a subject line identifier reading ‘‘Comment on the Residue Manifesting and Entry Test’’, to: OFO-CARGORELEASE@cbp.dhs.gov. Please direct questions to Deringer’s Compliance Department by sending an email to compliance@anderinger.com.

Many ocean carriers continue to vacillate on the general rate increase (GRI) and peak season surcharge (PSS) previously announced for cargo bound to the US and Canada from the Far East. Carriers have postponed the effective dates several times and published charges vary greatly by carrier, as the shipping industry continues to gauge market strength.

On eastbound cargo from the Far East and India to the US, many carriers implemented a PSS in August, which was, in many cases, mitigated to nominal fees. Some carriers have announced a PSS for Far East to Canada routed freight with a tentative effective date of November 1, 2013. Meanwhile, an October 1, 2013, GRI is anticipated for Far East to US/Canada routed cargo.

Deringer will continue to monitor communications from the steamship lines and will provide additional information when it becomes available. Deringer appreciates your support. Please contact your Deringer representative for specific information regarding your shipments.

Many of the primary functions of US Customs and Border Protection (CBP) will not be impacted by the government shutdown that began today. According to CBP officials, the ports are open for business with normal operating hours, which includes overtime. CBP estimates that 52,700 of its 59,600 employees will be exempt from the “federal funding hiatus.” The areas impacted will likely be to post release functions. Regardless of the limited anticipated effect on CBP staff, members of the trade have reports Customs-related slowdowns at some ports of entry.

Meanwhile, other government agencies that regulate trade are dramatically affected by the budget crisis. Agencies reporting large numbers of furloughed employees include US Food & Drug Administration, Food Safety & Inspection Service, Bureau of the Census, Environmental Protection Agency, Consumer Protection Safety Commission, Alcohol and Tobacco Tax and Trade Bureau, Federal Maritime Commission, and the Animal and Plant Health Inspection Service.

Many of the websites for these agencies are unavailable, such as the Census Bureau, the International Trade Administration, and the US International Trade Commission, on which the US Harmonized Schedule resides. The online steel licensing system, provided by the Steel Import Monitoring and Analysis Unit, has also been suspended. The Commerce Department and Census Bureau have only retained employees engaged in military, law enforcement, or employees necessary for protection. Personnel at the Office of Export Enforcement at the US Department of Commerce’s Bureau of Industry and Security are still available as they are considered essential to national security.

Additional information regarding the government shutdown can be found on CBP’s website. Please contact a Deringer representative for information or assistance if you have specific questions regarding your shipment.

Ocean carriers still hesitate to assess general rate increases (GRI) and peak season surcharges (PSS) for freight bound to the US and Canada from the Far East. Over the last several months, these published rates have widely varied and have repeatedly been postponed. The latest published effective dates have been in the November 1st to 15th time frame. However, ocean rates remain fluid as supply exceeds demand—leaving those in the trade to speculate when and if the GRI and PSS will go into effect.

Deringer will continue to monitor communications from the steamship lines and will provide additional information when it becomes available. Deringer appreciates your support. Please contact your Deringer representative for specific information regarding your shipments.

The mandatory phase of Canada Border Services Agency’s (CBSA) Advance Commercial Information (ACI) eManifest program has been postponed and will not be implemented this fall. While the informed compliance phase of the regulation began November 1, 2012, the mandatory phase has been postponed several times. CBSA has not announced a new timeline for implementation but says 45 days of notice will be provided once a new date is confirmed. The CBSA strongly advises those highway carriers who have not yet adopted eManifest to take advantage of the additional time before the regulation becomes mandatory. When eManifest highway carrier requirements are mandatory, non-compliant carriers could be subject to penalties.

The ACI eManifest regulation requires carriers bound for Canada to electronically submit data in advance of their arrival at the border. The ACI eManifest program is being implemented to help CBSA identify potential threats to Canada, while helping to move low-risk shipments expeditiously across the border.

Additional details regarding the ACI eManifest requirements are available on CBSA’s website. If you have not yet submitted an application, we strongly advise you to start the process. For information about Deringer’s ACI eManifest services, please send an email to emanifest@anderinger.com.


 

The US government is still tackling fiscal matters; however, a bill renewing the Generalized System of Preferences (GSP) trade program may still happen by the year’s end. A bill was introduced in July that would extend GSP to September 2015, but it didn’t pass and GSP subsequently expired on July 31, 2013. Since then, GSP-eligible goods have been subject to most-favored-nation tariffs when imported into the US.

Previously when GSP expired and was reauthorized, GSP eligibility was made retroactive. However, at this time, trade officials are uncertain if that will happen. Members of the trade have said that if the omnibus trade package passes, which includes the Miscellaneous Tariff Bill (MTB), then GSP will likely be renewed retroactively. If GSP and MTB are renewed independently, then retroactivity may be less likely. In the event GSP is made retroactive, Deringer will provide guidance on claiming refunds.

Deringer will continue to monitor the GSP and MTB bills and provide updates as they become available. If you have questions regarding these trade programs, please send an email to compliance@anderinger.com.

Contract negotiations between Class 1 rail carrier Canadian National and its workers, represented by the Teamsters Canada Rail Conference, have been tumultuous. The two parties have been in ongoing talks since the contract’s expiration on July 22, 2013; however, discussions broke down on October 7th. Since then, the parties have been in a 21 day automatic “cooling off” period that included a return to the bargaining table on October 21st. The major sticking points were longer working hours and less rest time between trips; both issues the teamsters cite as safety concerns. Without a resolution, a CN strike or lockout could happen by October 29th, as the mediation period expires at midnight on the 28th.  CN will need to provide 72 hours’ notice prior to a strike/lockout.

Deringer will continue to monitor the CN rail negotiations. We appreciate your support and will provide additional information as it becomes available.

Class 1 rail carrier Canadian National and the Teamsters Canada Rail Conference Union have come to a tentative three-year agreement. The previous contract expired on July 22, 2013. Talks broke down earlier in October, necessitating a government-appointed mediator. The details of the tentative deal have not yet been disclosed and won’t be until further ratification. For now, it appears that labor disruptions have been avoided.

A significant back log effected delays at the Nhava Sheva port, located near Mumbai, India. A breakdown in negotiations between labor parties and port authorities led to a strike at the end of October. Although the strike has been called off, scheduled vessel calls were missed and workers remain in a work slowdown which has caused huge traffic jams leading to the terminals, gate closures, incomplete operations, and reduced productivity. The port congestion continues to disrupt operations; however, EEPC India, an export promotion council, is calling for government intervention.

Deringer will continue to monitor and report on events at the Nhava Sheva port. Thank you for partnering with Deringer.

During a traditionally quiet time of year, steamship lines are gearing up for a rate increase on Asian-origin cargo bound for the US and Canada. The general rate increases (GRIs) and peak season surcharges (PSSs) come as a result of high load factors and are anticipated to take effect on November 15th. Recently, these increases were announced and repeatedly postponed; however, those in the trade are confident that these fees will go into effect. Furthermore, ocean carriers may attempt an additional GRI/PSS in late December or early January. On top of the anticipated surcharges, Chinese New Year arrives early this year adding capacity pressures mid-December through mid-January.

The GRI and PSS will vary by carrier; however, an approximation of those rates is below:

West Coast
$120-160 USD per 20’
$150-200 USD per 40'
$150-200 USD per 40’HC
$190-250 USD per 45'

East Coast/IPI/RIPI
$120-320 USD per 20’
$150-400 USD per 40'
$150-450 USD per 40’HC
$190-505 USD per 45’

Deringer will continue to monitor communications from the steamship lines. Thank you for your partnership.

In August, US Customs and Border Protection (CBP) published a Federal Register notice announcing that it would be conducting a test requiring the mandatory manifesting and entry of residue found in Instruments of International Traffic (IIT).  The implementation of the test was coupled with the enforcement of HQ Ruling H026715, dated June 19, 2009, which requires importers to make entry on containers with residual cargo. Both measures were scheduled to go into effect on November 25, 2013; however, Assistant Commissioner DiNucci announced via email last night, on November 14, that the test had been postponed.

For more information about the original initiative, please visit Deringer’s September 18th alert regarding CBP’s residue manifest and entry test. We will provide updated information regarding the scheduled implementation of these regulatory measures as they become available.

Domestic manufacturers and importers of paper and paper-based packaging have approved a new Paper and Paper-Based Packaging Promotion, Research and Information Order. The new Order was approved through the Agricultural Marketing Service (AMS) (a division of the US Department of Agriculture (USDA)) referendum with an approval of 85 percent of those participating, which represented 95 percent of the volume of product covered. The order means paper and paper-based packaging products will be subject to an initial assessment rate of $0.35 per short ton.

The program will cover four industry segments: printing and writing (except for newsprint); kraft packaging paper (used for products such as grocery bags and sacks); containerboard (used to make shipping container and related products); and paperboard (used for food and beverage packaging, tubes and other miscellaneous products). The program excludes carbonless paper.

A 12-member board will be responsible for carrying out activities intended to raise awareness about the renewability, recyclability, and reusability of paper and paper-based packaging. When the Order becomes effective, the board will be nominated to administer the program.

Deringer will provide additional guidance regarding effective dates, as well as more information as it becomes available. Please visit USDA’s news release for background on the Order or visit the Research and Promotion Programs page for information about this federal commodity research and promotion program.

The Port Authority of New York and New Jersey implemented a rate increase for bridges and tunnels that went into effective December 1, 2013. The rate increases affect the George Washington, Bayonne & Goethals bridges, the Lincoln & Holland tunnels, and the Outerbridge Crossing. Six axle trucks will pay $84 during peak hours, up from $72; four axle trucks will pay $56 during peak hours, up from $48. Car drivers continue to pay $13. This is the third of five toll increases, which began in 2011 and end in 2015. The schedule of bridge and tunnel tolls through 2015 is available on the Port Authority’s site.

Companies with shipments transiting these areas should be aware of toll increases that will be passed through carriers. Please contact a local Deringer representative with any questions.

After months of anticipation, the steamship lines are again gearing up for a rate increase on Asian-origin cargo bound for the US and Canada. The fees didn’t materialize this fall as was widely speculated and announced. However, the carriers are making a bigger push for a December general rate increase (GRI) with talk of a January peak season surcharge (PSS) in time for the Lunar New Year.

The Transpacific Eastbound trade has announced a GRI/PSS program intended for implementation prior to the Lunar New Year Holiday, taking place January 31 through February 2, 2014. Only some carriers have confirmed rate increases and effective dates vary by carrier. The intention of the rates is to return rate levels to the operational breakeven point, experienced during Q3 2013. The announced rates and potential effective dates are as follows:

December 20th: $200/FEU
First week of January: $400/FEU
Mid-January: $300/FEU

Although members of the trade can’t predict when and if the rates will go into effect, some speculate the scenario will unfold with an uptick in later December rates and one combined January rate increase, equating to a $400/FEU hike by mid-January. Deringer will continue to monitor communications from the steamship lines. Thank you for your partnership.

Over 100 workers at Indonesia’s largest port in Jakarta started striking yesterday, December 22nd, and the strike is anticipated to last through tomorrow, Tuesday, December 24th. Authorities have stated that the strike is not affecting port operations at this time.

Union management is hoping that additional union members from other ports will join in the strike, but the strike is currently limited to a small group of personnel. The union is striking in hopes of pressuring the port operations CEO to resign, who they feel has not provided enough transparency regarding port expansion plans.

Deringer will provide an update if the strike grows or disrupts port operations.

On December 19, 2013, US Customs & Border Protection (CBP) updated 75 ABI records and 19 harmonized tariff records in its Harmonized System Update 1306. The update will go into effect January 1, 2014, and contains modifications as mandated by the Committee for the Statistical Annotation of Tariff Schedules and as required by the verification of the 2013/2014 Harmonized Tariff Schedule. The modified records are currently available to all ABI participants and can be electronically retrieved via the procedures found in the CATAIR. Please contact a Deringer representative for additional information.

The 2014 Harmonized Tariff Schedule (HTS) is available on the US International Trade Commission’s (USITC’s) website, and can also be accessed from the Regulatory Center on Deringer’s website. The HTS is downloadable online in its full edition or by chapter. USITC also provides archived editions of the HTS, as well as a change record documenting substantive changes made since the printed edition of the 2013 HTS became available last January. Many of the changes in the 2014 edition are to the Rules of Origin for the US-Korean Free Trade Act. 
 
Deringer recommends that importers and exporters review the classifications of their commodities to ensure they have not changed in the 2014 edition. If you are entering goods into the US under the US-KR FTA or have other specific questions, please send an email to compliance@anderinger.com.

In addition to individuals who become victim to credit fraud, identity theft applies to companies, products, and importers’ identities. Counterfeit cargo has grown increasingly prevalent over the last few years. US Customs and Border Protection (CBP) signed an ACE-ITDS memorandum of understanding with the Federal Maritime Commission (FMC) to share ACE data and other information in an effort to better target counterfeit cargo. Stronger inter-agency cooperation with focus from CBP, FMC, Immigration and Customs Enforcement (ICE), and other agencies signifies the government’s increased vigilance toward preventing intellectual property rights (IPR) violations.

Most counterfeit cargo is at the very least an infringement of IPR, which is the illegal use of trademarked or copyrighted names, symbols, or designs. Counterfeit goods and IPR violations pose a financial, health and safety threat to US consumers and the economy. Top commodities targeted for counterfeiting include handbags, watches, apparel, consumer electronics, footwear, and pharmaceuticals. However, corporate identity theft often extends beyond the importers of these commodities. IPR thieves use many tactics including falsifying cargo information, delivery addresses, and manifest information. Over 20,000 IPR seizures, equating to more than a billion dollars MSRP, were made in 2012.

Importers must be vigilant in reviewing their import information and accompanying documentation. Any suspicious paperwork or information should be reviewed immediately and reported to government authorities. For example, it can be a red flag when a major corporation’s email address is provided by a free email service, such as hotmail or yahoo, instead of using an email address that includes the company name, often found as the domain name.

The key to avoiding IPR violations is paying attention. If something looks wrong, it is likely wrong. If you have questions in regard to corporate identity theft or counterfeit cargo, please contact a local Deringer representative. For more information about IPR, please read CBP’s report “Intellectual Property Rights, Fiscal Year 2012 Seizure Statistics.”

In addition to the General Rate Increase (GRI) announced three weeks ago, ocean carriers have advised that a peak season surcharge (PSS) for Asian-origin cargo bound for North America is planned for this month as well. The PSS affects eastbound cargo from all Far East and Indian sub-continent origins. The proposed rates and effective dates range by carrier, most commonly within the January 6 to January 15, 2014, time frame. The majority of the steamship lines have proposed the following PSS:

$320 USD per 20’
$400 USD per 40’
$450 USD per 40’ HC
$505 USD per 45’
$8 USD w/m, $8 USD min for LCL

The market is still in fluctuation with rates varying by carrier. Please contact your local Deringer representative for guidance and information on specific shipments.

With Chinese New Year approaching, bookings for Asian cargo shipments to North America should be made no later than this week. Space is already limited for many carriers.

Specifically, government bodies and logistics companies in China will observe the holiday between January 31 and February 7, 2014, and those in Hong Kong will observe it between January 31 and February 3, 2014. Many factories remain closed for an additional week following those dates.

For questions about bookings or space availability, please contact your local Deringer representative or send an email to marketing@anderinger.com.

Ocean carriage rates continue to fluctuate as steamship lines attempt to stay in the black and as demand increases in anticipation of shipping stakeholders observing Chinese New Year at the beginning of February. Earlier in the month, a peak season surcharge (PSS) was announced with effective dates between January 6th and the 15th; however, the fee has since been postponed to February. Meanwhile, ocean carriers have confirmed the general rate increase (GRI), announced in December, with an effective date of January 15, 2014. The GRI effects cargo bound to North America from Asian origins, including the Indian sub-continent. For most carriers, the newly implemented GRI includes:

$240 USD per 20’
$300 USD per 40’
$340 USD per 40’ HC
$380 USD per 45’
$6 USD per cbm for LCL

The market continues to vacillate widely by carrier. Deringer will provide additional information regarding the market’s stability, as information becomes available. Please contact your Deringer representative with questions or send an email to marketing@anderinger.com.

US Customs and Border Protection (CBP) is continuing to inform the trade about Importer Security Filing (ISF) compliance. To be fully compliant, ISFs must be filed 24 hours prior to the lading of cargo on ocean vessels. Because CBP continues to take a measured approach to enforcement, they recently stated that manifest holds will be put on any cargo that does not have an ISF on file 48 hours prior to arrival.

The hold will not be released until the ISF is submitted, and CBP will manually review those with holds no sooner than 72 hours after the vessel’s arrival to verify that the ISF has been filed and matched to the manifest. Once the ISF is filed, CBP will conduct its review to determine if an exam is necessary. Based on the ISF information on file, CBP will determine if additional enforcement action is necessary, including non-intrusive inspection and/or warehouse examinations.

In short, avoid costly delays by filing a timely ISF! For questions concerning ISF compliance, please send an email to compliance@anderinger.com or contact your Deringer representative.

The frigid weather impacting a widespread swath of Canada and the US has contributed to shipping delays. With more Arctic air and Polar gusts expected soon, and with capacity shortages relating to Chinese New Year, additional cargo shipment delays are anticipated. Few areas have been spared from service disruptions.

Stakeholders across the trade cite delays affecting intermodal, vessel, air, and rail movements. On the West Coast, bad weather effected backlogs for Vancouver, BC, which is anticipated to be unresolved through the next few weeks. Bad weather across the Pacific earlier in the shipping season caused vessel bunching and related delays for California-bound shippers as well. The port of Oakland, CA, is experiencing up to two weeks delay due to a truck carrier shortage, and the ports of LA and Long Beach have labor shortages related to the Martin Luther King Day holiday. Meanwhile, in the Midwest, inclement weather, chassis shortages, and road closures have resulted in severe rail and truck congestion. The corridor between New York and Virginia are now digging out from recent snowfall; however, truck gates are expected to stay open for longer hours to relieve some of the backlog.

Deringer will continue to apprise of the cargo backlogs plaguing North America. Please contact a Deringer representative about your particular import or export shipments if you have concerns about delays.

Although protesters remain on Bangkok streets, day-to-day business operations and the shipping industry are so far unaffected. The airports, seaports, consolidated freight stations, air and shipping lines, and Thai Customs are operating normally. Ongoing anti-government protests have resulted in a government-declared state of emergency for Bangkok, Thailand. The state of emergency will last 60 days and will allow the government to impose curfews and declare some parts of the city as off-limits. The political unrest is isolated to certain parts of the city.

In the event of a change in the Thai shipping industry, Deringer will provide an update. Deringer’s partners in Thailand remain in daily contact.

India’s largest port, Nhava Sheva, will be experiencing a nearly six-week partial shutdown of the container terminal from the beginning of March through part of April. During the slowdown, the port will be installing new harbor cranes which will impact normal operating conditions alongside the main container berth as well as the shallow draft berth. Normal operations are expected to resume in early May.

Also known as Jawaharlal Nehru Port (JN Port), the port handled approximately 3 million TEUs in 2013—amounting to more than half of India’s total containerized ocean traffic. The port authority said they will not be in a position to handle their full capacity, but they are making arrangements with the affected vessel operators to find alternate solutions. Ocean carriers have been asked to consider rerouting ships to other west coast ports, such as Mundra, Pipavav, or Hazira.

Please contact a Deringer representative for information regarding a specific shipment.

Severe cold and winter conditions impeded cargo progress last week, and the US and Canada are again cleaning up cargo delays due to blistery weather. Areas across both countries experienced severe cold and blowing snow that caused road closures, train delays, and port slowdowns at multiple points. Railways appear to be heavily impacted with delays reported for cargo bound on CN and Union Pacific. The consecutive cold weather and icy conditions have hampered cargo transportation in Saskatchewan, Manitoba, Iowa, Minnesota, Wisconsin, and northern Ontario, with heavy backlogs in Chicago and Vancouver. US ports from Virginia to Texas also experienced delays. Extended gate hours over the weekend helped to clean up some backlog, and ports and railways are expected to return to normal shortly.

The Northeast and Midwest are again gearing up for some major snow storms that are expected to produce between 5 and 24 inches over the next several days. These snow storms are likely to cause delays again. In the New York and New Jersey area, terminals are closing early today because of bad weather, which will push out pick-ups at the terminal until Wednesday morning. In some cases, customers may incur additional charges for storage, demurrage, per diem, and pre-pulls as a result of delays.

Deringer will continue to provide updates on freight delays due to inclement weather. For specific shipment information, please contact a Deringer representative.

Teamsters Canada has served notice to Canadian National (CN), Canada’s largest railway, of a potential strike as early as Saturday. Teamsters Canada, representing 3,000 conductors, train and yard employees, served the required 72 hours’ notice of intention to strike. The tentative agreements reached last October were never ratified, and the union decided to strike after two recent days of failed negotiations. CN’s chief operating officer, Jim Vena, stated in a news release that they plan to return to the bargaining table today with the help of federal mediators. Representatives of the union cite safety concerns for employees and the general public for their call to action.

A CN railway strike could have serious implications on the movement of freight, especially in the wake of severe winter weather. If you have concerns regarding the progress of your freight shipments, please contact a Deringer representative.

A tentative deal has been reached between Teamsters Canada and Canadian National (CN Rail), allowing Saturday’s strike to be called off. The agreement still requires ratification by the union, but a spokesman for the Teamsters is confident in the new deal. CN Rail is the largest railway in Canada, and a strike would have resulted in large scale implications on the movement of freight in the US and Canada.

Deringer will monitor the ongoing negotiations and provide updates. Please contact a Deringer representative with any questions. Thank you for your support.

In anticipation of the severe storm predicted to hit the Northeast, all container terminals in the Port of New York/New Jersey are closed tonight through tomorrow, February 13th. The gate opening hours for Friday, February 14th, will be advised mid-day tomorrow. Many flights are expected to be cancelled to and from the area as well. Meanwhile, ports along the US southeastern coastline started closing on February 11th and remain closed today because of the storm.

Please contact a Deringer representative with any questions regarding your specific shipments. Thank you for your support.

In a signing ceremony aboard Air Force One on February 19, 2014, President Obama signed an Executive Order setting a deadline of December 2016 for full implementation of the International Trade Data System (ITDS).  The system, mandated by the SAFE Port Act of 2006, provides a one-stop single window channel to submit data to dozens of government agencies that regulate the import and export of goods to and from the US. The modernized system will improve the productivity between agencies and companies engaged in trade.

Once fully implemented, ITDS is expected to dramatically decrease the time and costs associated with achieving compliance with the multitude of agencies that regulate international trade within the US. Additionally, ITDS will assist the US government to make decisions more quickly and effectively about goods arriving at ports of entry, which in turn will speed the flow of trade across borders. A White House fact sheet providing an overview of the Executive Order explains, “This new electronic system will speed up the shipment of American-made goods overseas, eliminate often duplicative and burdensome paperwork, and make our government more efficient.”

The Executive Order also expands the Border Interagency Executive Council (BIEC) which provides improved cooperation between government and non-government stakeholders. The ITDS has frequently suffered from red tape and divergences between multiple agencies within the federal government, each with its own mandates and policies. The BIEC’s goal is to provide a single point of access to streamline import and export functions, which will smooth trade functions for small businesses and foster new job creation.  

The Executive Order—Streamlining the Export/Import Process for America’s Businesses is available online. As the Order is implemented, Deringer will provide updates.

Steamship lines have proposed general rate increases (GRIs) as the industry continues to fluctuate. Ocean carriers skipped sailings during February, rather than slow steaming or adjusting vessel size, directly impacting vessel capacity. Meanwhile, the demand for carrier space rose in response to inclement weather conditions across the US and Canada, as well as annual shutdowns following Chinese New Year.

Transpacific GRIs
Effective March 15, 2014, the following GRIs have been announced for eastbound cargo moving from the Far East and India to the US and Canada. Although the peak season surcharge (PSS) for this route did not take place in February as announced, the below rates are in addition to the GRI that went into effect in January.

$240 USD per 20’
$300 USD per 40’
$340 USD per 40’ HC
$380 USD per 45’
$6 USD per cbm for LCL

Many carriers have also proposed a GRI for exports to Asia effective at the beginning of March.
US West Coast Exports:
$40 USD per 20’
$50 USD per 40’

US East Coast Exports:
$80 USD per 20’
$100 USD per 40’

US to Mediterranean GRI
Carriers have proposed a GRI for cargo exports from the Mediterranean to the US.
$200 USD per 20’, 40’, 45’

As a result of the increases imposed by the carriers, previously quoted rates may be subject to the above GRIs. Deringer will continue to provide updates regarding the industry. Please contact a Deringer representative to determine the impact to your shipments or if you have any questions. Thank you for your support.

On Monday, February 24, 2014, the United Truckers Association (UTA) issued a 48 hour notice of intention to strike at Port Metro Vancouver (PMV). Shipments transiting the Port of Vancouver will be subject to serious trucking delays—possibly complete service disruption by UTA truckers—beginning Wednesday, February 26, 2014. It is unknown how long the labor stoppage may last.

The UTA has initiated this labor action as a result of port congestion and long delays accessing the terminals. Drivers are compensated on completed legs to and from the port, so idle time creates a heavy financial impact for them.

Deringer is closely monitoring the developing labor situation and will continue to provide updates. Please direct questions to a Deringer representative. Thank you for your support.

Domestic manufacturers and importers of paper and paper-based packaging have approved a new Paper and Paper-Based Packaging Promotion, Research and Information Order. The new Order was approved through the Agricultural Marketing Service (AMS) (a division of the US Department of Agriculture (USDA)) referendum with an approval of 85 percent of those participating, which represented 95 percent of the volume of product covered. The order makes paper and paper-based packaging products subject to an initial assessment rate of $0.35 per short ton (2000 lbs). The assessment will pay for the marketing and education of consumers regarding the renewability, recyclability, and reusability of paper and paper-based products, which will expand markets for the industry. The Order and assessments are effective March 1, 2014.

The program will cover four industry segments: printing and writing (except for newsprint); kraft packaging paper (used for products such as grocery bags and sacks); containerboard (used to make shipping containers and related products); and paperboard (used for food and beverage packaging, tubes and other miscellaneous products). The assessment will be charged to US manufacturers and importers of paper products at a rate of $.000386/kg on Customs entries that include the applicable HTS numbers found in Volume 79, Number 14 of the Federal Register.

A 12-member Paper and Paper-based Packaging Board, nominated by the Paper and Paper-Based Packaging Panel, will administer the program under the supervision of AMS. Domestic paper and paper-based packaging manufacturers will pay the assessment directly to the Board. Importer assessments will be collected through US Customs and Border Protection (CBP). If CBP does not collect the assessment, the importer is responsible for paying the assessment directly to the Board within 30 days following the end of the quarter in which the goods were imported. At this time, CBP has not completed programming to allow collection of this assessment on Customs entries and a timeline for automated payment has not been made available.

Exemptions are available to companies that import and/or manufacture less than 100,000 short tons of these paper products per year. To determine eligibility for an exemption, companies will need to assess their US production and US imports, or tally both if they are importers and manufacturers, of the paper products subject to the assessment. The new rule also excludes carbonless paper, tissue paper, newsprint or converted products, and manufacturers that are USDA-certified “organic producers” under the Organic Foods Production Act of 1990. Importers should apply to the Board for exemptions.

Deringer will provide additional guidance regarding method of payment, as well as additional information as it becomes available. Please visit USDA’s news release for background on the Order or complete details can be found in the Federal Register.

Striking truckers at Port Metro Vancouver, the busiest port in Canada, have caused port delays since the work stoppage began on February 26, 2014. Over the weekend, unionized container truck drivers at the port voted to join their non-unionized counterparts in the labor action. Saturday, March 1, 2014, marked the beginning of the 72-hour notice required for the unionized truckers to strike.

The United Truckers Association (UTA), representing more than 1,000 owner operators, initiated the strike demanding some resolution to the port congestion resulting in long delays at the marine terminals. Congestion problems have been a problem for the port on and off over the years, including a 47-day truckers strike in 2005. Unionized truckers are also requesting the reappointment of a government mediator to help find a solution. Deringer continues to monitor the situation and will provide updates via Deringer’s website, Twitter and LinkedIn.

The contract between the Pacific Maritime Association (PMA) and the International Longshoremen and Warehouse Union (ILWU), which represents US West Coast port workers, expires July 1st of this year. Some trade officials speculate a work stoppage is inevitable citing ILWU angst over job security and health benefits. With rumors already brewing, shippers are expressing concerns about possible US West Coast port disruptions and, therefore, are creating contingency plans. Alternate routing may include East Coast shipments through the Panama Canal or utilizing Western Canadian ports but most hope a strike will be avoided.

Deringer will provide information on the West Coast labor negotiations over the next few months. However, as the current contract expiration nears, shippers should plan accordingly with increased inventory, as well as considering alternate routing plans.

Trucker tensions at the Port of Vancouver have been eased with the assistance of federally appointed mediator, Vince Ready. A strike by unionized truckers, represented by UNIFOR-Vancouver Container Truckers Association (VCTA), has been averted for at least 60 days while a deal is under review. Meanwhile, the non-unionized truckers, who have been striking since February 26, 2014, could return to work early next week following a weekend vote.

The United Truckers Association (UTA) representing more than 1,000 owner operators initiated the strike seeking resolution regarding port congestion and long delays at the port. Deringer will continue to provide updates regarding the progress of negotiations at Port Metro Vancouver.

After failed negotiations over the weekend, truckers continue striking at Port Metro Vancouver. For a brief time on Friday, hopes were raised and tensions were eased when a federal mediator was appointed and the union agreed to return to the bargaining table. However, nearly 100 percent of the 300 unionized truckers, represented by Unifor-VCTA, said the deal was “too little, too late.” The unionized truckers joined the picket lines of the 1,000 non-unionized truckers already striking.

Truckers are protesting the long wait times and compensation. Deringer will continue to monitor and report on the situation. Look for more Deringer updates on LinkedIn and Twitter.

The port, local, and federal governments have announced a 14-point plan to end the truck strike at Port Metro Vancouver. The two-week truckers' strike has drastically reduced truck traffic at the harbor, occasionally turned to violence over the last few days, and recently resulted in at least two ocean carriers diverting cargo to other ports. The plan addresses truckers’ compensation and congestion concerns using a phased approach but also may impose steep licensing restrictions if truckers do not comply and return to work. At this time, truckers are reviewing the offer.

Customers who have cargo diverted to Seattle-Tacoma have the option to arrange for transportation from that terminal, which may mean additional drayage costs. Alternately, shippers can store their goods at the new port until an agreement is reached at Port Metro Vancouver, at which time carriers will pick up the cargo and return it to the original point of lading; however, shippers would be responsible for demurrage and handling costs incurred.

Deringer will continue to report on the emerging story at Port Metro Vancouver. Thank you for your continued support.

Effective April 8, 2014, US Customs and Border Protection (CBP) will resume rendering continuous bonds insufficient if mail is returned from a bond principal. CBP’s Bond Team will be coordinating this process on Tuesdays.

If mail is returned but the address on file is accurate, importers may submit a short letter to the Bond Team that specifies the current address and states that the importer receives mail at this location. The letter must be on company letterhead and signed by an officer of the company; it may be submitted via email or fax. Once received, CBP will review the letter, and the Revenue Division will return the bond to sufficient status and attempt to resend mail to the address.

When an address on file is incorrect, the surety can respond by submitting an email with the subject line “RIDER IR#.” The mailing address can be changed by completing CBP Form 5106. If the physical address needs to be changed, importers will need to complete CBP Form 5106 and an address change bond rider. CBP Form 5106 should show both a mailing and physical address, even if they are the same. Once all paperwork is processed, the bond will regain sufficient status usually within five business days from receipt of the email.

CBP is encouraging those in the trade to work closely with their sureties to ensure notifications regarding bond sufficiency are heeded and prompt corrective action is taken to avoid continuous bonds from becoming insufficient.

Vancouver truckers are back at work this morning after an agreement was reached, late Wednesday afternoon, between the members of the United Truckers Association and Unifor with assistance from state and federal governments, as well as Port Metro Vancouver.

The strike left millions of dollars of cargo stranded at the Vancouver-area container terminals and caused some freight to be diverted to nearby ports, such as Seattle. The strike included 1,000 non-unionized truckers, whom began striking in February, as well as about 250 unionized truckers that joined the strike on March 10, 2014.

The brewing conflict between truckers and the port largely included concerns linked to pay and long wait times associated with traffic congestion.

Ocean carriers have announced new general rate increases (GRIs) for eastbound cargo from Far East and Indian sub-continent origins to the US and Canada. These GRIs are expected to go into effect on May 1, 2014.

West Coast Ports
Shipments to the West Coast of Canada and US; points within trucking range of West Coast ports of discharge (Group 4 destinations)
$240 USD per 20’
$300 USD per 40’
$338 USD per 40’ HC
$380 USD per 45’
$6 USD w/m, min US$6

Other Destinations
Shipments to US and Canadian East Coast destinations; East Coast all-water and inland points, including inland points from Vancouver/Prince Rupert; shipments via inland MLB intermodal service, and to US Gulf port destinations
$320 USD per 20’
$400 USD per 40’
$450 USD per 40’ HC
$506 USD per 45’
$8 USD w/m, min $8

As a result of the increases imposed by the steamship lines, previously quoted rates may be subject to the above GRIs. Deringer will continue to provide updates on carrier increases. Please contact a Deringer representative to determine the impact to your shipments or if you have questions. Thank you for your support.

Canada has won a dispute over the termination date of export charges applied to softwood lumber to the US. As a result of the ruling, Ontario and Quebec softwood lumber exporters will no longer be assessed export charges of 0.1% and 2.6% respectively. Export charges collected after October 12, 2013, will be refunded.
 
The export charges were the result of the US-Canada Softwood Lumber Agreement. An agreement intended to limit softwood lumber exports from Canada to the US to protect the US lumber market at a time that demand was particularly low. The agreement is scheduled to remain in effect through October 12, 2015.

Transpacific carriers announced a May 1st general rate increase (GRI) for cargo shipments from Asia and the Indian sub-continent to the US and Canada. Other steamship lines are announcing implementation of an April 15th GRI. The May 1st GRI is primarily applicable to those shippers with contracts expiring on April 30; therefore, either the April or May GRI will be relevant to shippers, but not likely both. However, a peak season surcharge (PSS) may be on the horizon, as a few carriers have announced plans for one in June.

With the market relatively unstable, experts in the trade are having a difficult time predicting what’s around the corner. GRIs sometimes stay in place for a week or two before carriers reduce rates due to market volatility. Deringer will continue to provide updates on the market. Thank you for your support.

Beginning May 5, 2014, the Animal and Plant Health Inspection Service (APHIS) of the US Department of Agriculture will strictly enforce new import requirements for animal products and by-products. The “BSE (Bovine Spongiform Encephalopathy) Comprehensive Rule” requires trading partners to have new documentation for most bovine products, including amendments to the bovine export certificates. The new requirements can be found in the APHIS Animal Product Manual (APM) available on the APHIS website.

The final rule includes a new system for classifying country of origin regions as negligible, controlled, and undetermined as applicable by the risk for BSE. Additionally, the rule puts in place requirements for import conditions requirements for bovine products and removed the restriction on the import of cervids, camelids, and their by-products. A January 29th letter to the trade further provides guidance on the final rule.

To avoid shipments delays or refusals, the new requirements must be met by May 5, 2014, or send an email to compliance@anderinger.com.     

The Pacific Maritime Association and their International Longshoremen and Warehouse Union (ILWU) employees begin contract negotiations on May 12, 2014. The existing agreement expires on July 1. The ILWU represents dockworkers at ports along the West Coast. As in previous contract years, insiders speculate the bargaining process could be contentious. The critical issues on the table include stronger safety provisions, wages, benefits, ILWU jurisdiction, new technology, and future health care expenses attributed to the Affordable Health Care Act. Past negotiations have led to work slowdowns and stoppages, such as a 2002 ten-day lockout that required presidential intervention.

Shippers should begin considering the impact of West Coast port disruptions to their supply chain. By planning in advance, importers have a greater chance of finding alternate shipping routes, services, or strategies. Companies may choose to find back-up suppliers closer to their distribution points or may build onshore inventory supplies beforehand. In the event of a strike, companies scramble to find alternative transportation, which results in capacity issues. Airfreight bookings or contingency routings may help alleviate the crunch if booked prior to any negotiation misfires or labor unrest.

By prioritizing critical supplies and planning ahead, companies have greater opportunity to minimize disruption to their supply chain in the event of West Coast labor conflicts. Deringer will provide updates on the negotiations when they begin. In the interim, Deringer’s logistics staff can help you plan accordingly by booking freight for early delivery or providing information about our distribution services if stocking additional product is a good solution. Please send an email to marketing@anderinger.com for assistance.

Contract negotiations between the Pacific Maritime Association and their International Longshoremen and Warehouse Union (ILWU) employees began on Monday, May 12, 2014. Industry sources report that negotiations started on a good note with both sides stating they expect cargo to continue moving throughout the negotiation process. The ILWU represents dockworkers at ports along the US West Coast, which includes the country’s largest ports of Los Angeles and Long Beach. Although negotiations began on a positive note, many in the trade anticipate a contentious bargaining process; therefore, shippers are advised to consider contingency plans.

The existing agreement ends at midnight on June 30; however, many in the trade don’t believe that an agreement will be reached prior to the contract’s expiration. If an agreement is not reached, negotiations could continue without a strike, but other labor actions, such as work slowdowns, may result. A West Coast strike would have major implications, including economic damage and impact to the fluidity of trade throughout the US, as well as neighboring countries as shippers try to reroute cargo. Even one day of strike causes major entanglements. For each day of striking, one week is required to clean up the resulting congestion. Most experts in the trade believe that a strike would last no longer than two weeks before the government intervenes.

Supply Chain Preparations
Shippers should consider the impact of West Coast port disruptions to their supply chain. By planning in advance, importers have a greater chance of finding alternate shipping routes, services, or strategies. Companies may choose to find back-up suppliers closer to their distribution points or may build onshore inventory supplies beforehand. In the event of a strike, companies scramble to find alternative transportation, which results in capacity issues. Airfreight bookings or contingency routings may help alleviate the crunch if booked prior to any negotiation misfires or labor unrest. By prioritizing critical supplies and planning ahead, companies have greater opportunity to minimize disruption to their supply chain if West Coast labor conflicts arise.

Ocean Carriers Announce Congestion Surcharge
In the event of congestion caused by labor unrest or other disruptions to normal work flow associated with the West Coast port negotiations, ocean carriers have announced a congestion surcharge. The surcharge is applicable to cargo arriving at any US port or transiting Canada or Mexico for arrival in the US. The charges will only be assessed if labor disruptions occur.

USD $895.65 per 20' container for all equipment types
USD $1,125.65 per 40' container for all equipment types
USD $1,265.65 per 40'HC container for all equipment types
USD $1,415.65 per 45’ container for all equipment types
USD $22.65 per W/M

Deringer will continue providing updates on the negotiations. In the interim, Deringer’s logistics staff can help you plan accordingly by booking freight for early delivery or providing information about our distribution services if stocking additional product is a good solution. Please send an email to marketing@anderinger.com or contact your local Deringer service center for assistance.

On July 31, 2013, benefits under the trade program known as the Generalized System of Preference (GSP) expired. To reinstate benefits, the United States Congress must pass an act reauthorizing the program. It remains unclear when Congress will reinstate GSP or if they will make the benefits retroactive. In the past when GSP expired, Congress made the program retroactive allowing reimbursement for all entries since expiration.

At present, CBP has made no provision to prevent liquidation (finalization) of goods eligible for GSP entered during the interim period. Dependent upon the language of any future legislation renewing the benefit, this could effectively bar an importer from recovering any qualifying duties and fees retroactively. An importer may file a protest with CBP in an attempt to “stop the clock” until such a time as Congress takes action in regard to the program.

Deringer strongly recommends that importers with entries of merchandise subject to GSP, which shipped in the last year, contact their Deringer representative to discuss the potential impact. Deringer can help provide guidance and develop strategies regarding how importers may recover duties (if any) if and when Congress passes GSP renewal legislation.

For the first time in nearly ten years, the Animal and Plant Health Inspection Service (APHIS) is proposing changes to Agricultural Quarantine Inspection (AQI) fees for imports. APHIS proposes to amend its general fee rates, as well as the rates charged by APHIS and CBP officers for overtime. The overtime rates would be raised accordingly with the anticipated cost of providing AQI services through 2018. These rates are applicable to APHIS or CBP staff performing inspections, laboratory inspections, certifications, or quarantine services. Additionally, it removes annual caps on fees for vessels and railcars. APHIS says the fee increases are necessary to cover AQI costs, which have primarily been incurred by CBP. To cover the costs of AQI services, APHIS has proposed the following changes.

APHIS also proposes to add a $375 fee for required treatment conducted under the AQI program, including those conducted by private companies.

Additional information is available on the APHIS website, and the proposed rule can be found on USDA’s site. Comments are due 60 days from the proposed rules’ publication in the Federal Register, which was on April 25, 2014.

Shippers contend with a volatile shipping industry during uncertain West Coast labor negotiations. Ocean carriers have proposed and delayed general rate increases (GRIs) and peak season surcharges (PSSs) numerous times over the last few months. These uncertain rates are compounding confusion caused by re-routings amid concerns of tumultuous labor negotiations taking place between the Pacific Maritime Association (PMA) and the International Longshoremen and Warehouse Union (ILWU).

Proposed Transpacific Carrier Fees: GRI/PSS
For many shippers, the GRI and PSS charges proposed previously in the year for ocean freight from the Far East did not come to fruition. The GRI notice for the Far East to Canada trade lane did not materialize in May as announced, but some carriers are announcing a mid-June mitigated GRI. Meanwhile, for shipments from the Far East to the US, GRIs were implemented on a case-by-case basis. Most shippers realized a mitigated GRI of $80/20’ standard container, $100/40’ standard container, and $100/40’ high cube container.

A new PSS has been announced from the Far East and Indian sub-continent to the US and Canada with an effective date of June 15. Those in the trade anticipate this PSS will go into effect as announced and will not likely be postponed or cancelled.

$320 USD per 20’
$400 USD per 40’ STD
$450 USD per 40’ HC
$506 USD per 45’
$8 USD per CBM LCL ($8 w/m, $8 min)

Shippers should contact their Deringer representative to determine if their quoted ocean rates will be impacted by a GRI or PSS.

West Coast Labor Talks
The contract for the ILWU, which represents port workers along the US West Coast, expires at midnight on June 30. Both the ILWU and their management, represented by the PMA, have presented their initial contract requirements which remain far apart. Given the disparity in demands, trade professionals are anticipating some level of West Coast shipping disruption in the form of work slowdowns or stoppages. Many shippers have diverted cargo to Canadian ports or US East Coast/Gulf ports to avoid interrupted supply chains associated with the negotiations. According to a Journal of Commerce survey of 221 shippers, two-thirds of respondents planned or had already arranged for alternate shipping routes as of Mid-May. Bookings for all-water routes to the East and Gulf Coasts and to Canada have quickly filled, leaving other shippers to potentially ride out the negotiations.

In the event of any labor unrest associated with the West Coast port negotiations, ocean carriers have announced intentions to assess a Congestion Surcharge.

Deringer will continue to report on the proposed GRI/PSS surcharges and the West Coast labor negotiations. The shipping industry remains unpredictable, but Deringer is available to provide guidance.

Local US Customs and Border Protection (CBP) offices have been flexing their Importer Security Filing (ISF) enforcement. This enforcement strategy allows local port-level discretion to hold cargo or issue liquidated damages/penalties against importers who do not comply with ISF filing requirements. Enforcement actions are focused on the most egregious ISF violators, such as those with missing or significantly late ISFs. Non-compliant importers are given three warnings before CBP assesses liquidated damages. CBP will track ISF importer violations in a database that will provide visibility to local officers in an effort to identify offending importers nationwide.

To avoid cargo holds and liquidated penalties, Deringer recommends timely and accurate ISFs. Using Deringer for Customs brokerage and freight forwarding can help alleviate late filings. Please visit our website to learn more about our ISF options.

Amid concerns about US West Coast slowdowns and a volatile shipping market, ocean carriers have postponed the peak season surcharge from the Far East and Indian sub-continent to the US and Canada. The PSS was announced earlier in the month with an effective date of June 15, which has been postponed to July 1. The proposed PSS rates are below.

$320 USD per 20’
$400 USD per 40’ STD
$450 USD per 40’ HC
$506 USD per 45’
$8 USD per CBM LCL ($8 w/m, $8 min)

The mid-June anticipated general rate increase for ocean shipments from the Far East and India to Canada has also been postponed to July 1. However, some steamship lines are opting to implement the GRI for shipments to the US.

Shippers should contact their Deringer representative to determine if their quoted ocean rates will be impacted by a GRI or PSS.

The US Department of Agriculture (USDA) intends to publish a notice in July of 2014 that will end the International System of Phytosanitary Measures (ISPM 15) exemption of Canadian wood packaging materials (WPM) en route to the US. Specifically, the rule applies to cargo arriving at US ports of entry on wooden pallets and in wooden boxes, crates, etc. Details regarding the final rule, which will be published in the Federal Register, are not yet available. However, shippers can expect a phase-in or grace period, similar to the original implementation of the ISPM 15 regulations in 2006.

Since July 5, 2006, most goods arriving in the US are required to have WPMs fumigated or heat-treated, then branded with an ISPM mark. The mark indicates the method of treatment and the identification number of the facility that provided the treatment. Currently, goods shipped between the US and Canada are exempt from these requirements.

Once the US regulation goes into effect, Canada is expected to end its ISPM exemption for goods imported from the US as well. Once the final rule is published, Deringer will provide additional details via email and on Deringer’s website. Please email Deringer's Compliance Department with questions.

HMF Avoided for US Bound Ocean Cargo En Route via Canada
A tax on ocean bound cargo entering the US through Canadian and Mexican ports of entry has been avoided. The Water Resources Reform and Development Act originally contained language proposing a tax on cargo entering the US through Canadian ports. However, the June 10th final ruling omitted the tax portion of the law.

A Harbor Maintenance Fee (HMF) of 0.125 percent would have been incurred for these shipments, equivalent to the amount applicable to cargo arriving at US ports of entry. The tax would have been collected by US Customs and Border Protection upon entry into the US. This is the third time the proposed legislation has been defeated.

Terminals at Port Metro Vancouver Announce Reservation Fee
Port Metro Vancouver is implementing a reservation fee similar to Pier Pass in LA. Several container terminals at Port Metro Vancouver, including TSI Terminal Systems Inc. (TSI) and DP World (Canada), have announced a $50 daytime reservation fee to offset operational costs associated with capacity issues. Terminals will partially offset the fee as they subsidize a portion of it by one quarter to one half, as determined by the terminal.

Daytime gate reservation fees and night gate operations go into effect July 2, 2014. Truck day gates are operational Monday through Friday from 8:00AM to 4:30PM, and night gates are open from 4:30PM to 1:00AM. The fees and hours are applicable to TSI’s Vanterm and Deltaport terminals and DP World’s Centerm terminal.

Deringer is following this story and will provide updates.

The Canada Border Services Agency (CBSA) does not have an anticipated enforcement date to implement the next phase of its eManifest program. Also called the Advance Commercial Information (ACI) program, eManifest remains a voluntary program for now.

CBSA provided recent updates on the program. In February of 2014, CBSA posted “Regulations Amending Certain Regulations Made Under the Customs Act” signaling CBSA’s intent to pursue making several phases of eManifest mandatory. Subsequent to the February announcement, CBSA announced an update on the eManifest regulatory process in May. Still, no enforcement date has been announced.

CBSA is still committed to providing at least 45 days’ notice prior to making the eManifest regulations mandatory. Additionally, the freight forwarder requirement to transmit house bill data in advance is no longer effective July 1, 2014. CBSA’s eManifest requirement remains in voluntary status for now, and Deringer will continue providing updates. Please direct any questions to emanifest@anderinger.com.

The contract covering the International Longshore and Warehouse Union (ILWU), which is the union representing US West Coast port workers, expired yesterday and will not be extended. However, the ILWU and management, the Pacific Maritime Association (PMA), shared a joint release stating they will continue negotiations without work disruptions until an agreement can be reached. Furthermore, their release stated both parties understand the “strategic importance of the ports to the local, regional, and US economies.”

In previous contract years, the parties also failed to meet the contract expiration deadline, so these circumstances are not unusual. This year’s contract discussions are not as contentious as previous years, such as in 2002's talks that resulted in a 10-day employer lockout of longshoremen. Major issues being addressed are wages, safety, jurisdiction and medical insurance. Some trade professionals have predicted a three-year contract will be considered to allow talks to be tabled concerning the “Cadillac” tax included in the national Affordable Health Care Act.

Meanwhile, cargo volumes at the ports of Los Angeles and Long Beach have picked up over the last two months as shippers tried importing goods prior to the ILWU contract expiration. Due to the spike in traffic, the ports are experiencing extreme congestion especially affecting chassis availability and container freight stations (CFS) capacities.

CBP Provides Contingency Plans in Event of a Strike
US Customs and Border Protection (CBP) has published proactive guidance regarding operating procedures in the event of a West Coast strike or disruption. The interim procedures address communications and entry processing under different possible scenarios, including vessels diverted to other US or foreign ports and anchored vessels carrying cargo. These guidelines are only effective in the event of US West Coast port disruptions.

Deringer will continue monitoring the contract negotiations, as well as related developments in the area.

Effective July 1, 2014, transpacific carriers have implemented a peak season surcharge (PSS) for shipments originating in the Far East and Indian subcontinent destined for the US and Canada. Some ocean carriers have offered mitigated rates on a case-by-case basis. The average PSS charges quoted are as follows:

West Coast
$160 USD per 20’
$200 USD per 40’ STD
$200 USD per 40’ HC
$4 to $6 USD per CBM LCL

East Coast
$320 USD per 20’
$400 USD per 40’ STD
$450 USD per 40’ HC
$6 to $8 USD per CBM LCL

There continues to be market confusion. Carriers have also announced an intended PSS for July 15, 2014. Shippers may contact their Deringer representative to determine if their quoted ocean rates will be impacted.

Tropical Storm Arthur is forecasted to grow into a Category 1 hurricane in the next 48 hours; however, it is not expected to hit landfall. Heavy wind and rain associated with the storm is anticipated to strike the Atlantic Coast, reaching ports from South Carolina north to Massachusetts.

Shipping delays may result as carriers, port, and government officials prepare for the storm and eventually resume operation and resolve backlogs. Deringer will provide additional guidance as necessary.

In the near future, US food importers and companies importing other goods regulated by the US Food and Drug Administration (FDA) will realize additional tangible benefits with certification in US Customs and Border Protection’s (CBP’s) Customs-Trade Partnership Against Terrorism (C-TPAT). Under CBP’s Trusted Trader pilot, FDA will be able to recognize C-TPAT certified importers, which will allow the agency to better target and evaluate risk; therefore, streamlining the shipping process for certified shippers. Prior to this pilot, FDA was unable to recognize C-TPAT certified shippers.

CBP’s Trusted Trader pilot endeavors to streamline government security programs while helping the trade community realize more efficient shipping benefits. As part of the pilot, segments of C-TPAT, a joint voluntary, security program between importers and CBP, and the Importer Self-Assessment program will combine. The accessibility of this data provides FDA with another tool to assess the risks associated with shipments of food and other goods regulated by FDA.

FDA, CBP, and the Advisory Committee on the Commercial Operations of CBP (COAC) are still working to coordinate their different missions and how they relate to C-TPAT. However, FDA and CBP continue to develop areas of joint cooperation. This collaboration is evidenced by the agencies crafting a memorandum of understanding, working together to establish CBP’s Center of Excellence and Expertise relevant to FDA, and FDA recently renewing its commitment within the Commercial Targeting and Analysis Center.

Deringer will continue to report on the progress of the Trusted Trader pilot program and the benefits of C-TPAT. Please send an email to compliance@anderinger.com with questions.

Cargo congestion prevails among US and Canadian West Coast ports. Shippers concerned with US West Coast labor negotiations between the International Longshore and Warehouse Union (ILWU) and their management have increased cargo throughput to US ports, as well as rerouted freight to Canadian ports. A chassis shortage and labor unrest among striking truckers at the ports of LA and Long Beach have also increased congestion.

The congestion has pushed freight to the Canadian ports of Vancouver and Prince Rupert causing increased dwell times for inland destined cargo and pushing rail capacity. CN Rail has advised they are giving priority to customers with cargo traffic regularly routed through Canadian ports, meeting its service obligations to year round customers first.

Deringer advises customers to continue booking freight early. We will continue to assess and report on the labor negotiations and the congestion issues.

Effective July 15, 2014, CN Rail advised that free time for container storage has changed from 72 hours to 48 hours at most facilities. Affected facilities include Edmonton and Calgary, AB; Saskatoon, SK; Winnipeg, MB; and Montreal, QC. Toronto, ON (CN Brampton) remains at 24 hours. The change comes at a time when congestion is a leading concern as a result of increased demand.

To avoid incurring demurrage charges, shippers should ensure their containers are picked up promptly from the rail yard. Working with a single logistics partner for Customs brokerage and freight forwarding can help mitigate the risk of demurrage charges.

Some overseas shipping partners have closed temporarily following, or in anticipation of, Typhoon Matmo. Most recently, the storm brought heavy rains, strong winds, and threats of landslides on the mountainous island of Taiwan, which forced municipalities and businesses to close. Coastal communities in China have also braced for the oncoming storm, the second typhoon to arrive in the past couple of weeks.

According to China’s weather agency, rains of up to 12 inches are forecast in Shanghai and include areas north to Jiangsu province. Southern Chinese cities are still recovering from the earlier storm, Typhoon Ramassun, which destroyed homes, cut electricity and water supply, damaged roads and port infrastructure.

Typhoon damage may cause delays for shipments to or from China, Taiwan, and Southeast Asia. Shippers should contact their Deringer representative to determine if their freight is impacted.

The Animal and Plant Health Inspection Service (APHIS), a division of the United States Department of Agriculture (USDA), has stated that current wood packaging materials (WPM) requirements remain in place for shipments from Canada to the US. An announcement in June indicated that APHIS intended to remove the exemption for Canadian WPM from the International Standards for Phytosanitary Measures No. 15 (ISPM No. 15).

The change hails back to 2012 when APHIS announced their intention to publish a final rule lifting the current exemption from ISPM No. 15 requirements for unmarked WPM originating in and moving between Canada and the US. The revised regulation is still under review. APHIS has stated that a change will not be published or implemented in July 2014 as previously announced.
 
APHIS still plans a phase-in period once the final regulation passes. The phase-in period would likely include timelines for full implementation, an outreach program, and cooperation with the Canadian Food Inspection Agency (CFIA). It is anticipated that CFIA will likely update Canada’s D98-08 Entry Requirements for Wood Packaging Material into Canada directive to remove the exemption as well.

Until the changes are implemented, a declaration or statement of origin for the unmarked WPM should be made on shipping documents to allow Customs to readily verify their origin. The statement or declaration is necessary to avoid delays. This is particularly important if the goods in the shipment are of a non-US/Canadian foreign origin and/or the shipment contains both marked and unmarked WPM.

CFIA provided the following examples of appropriate statements to include on shipping documents when exporting and importing commodities containing WPM between the US and Canada:

• “the unmarked wood packaging in the shipment is of Canadian origin”;
• “the unmarked wood packaging in the shipment is of Canadian and US origin”;
• “the unmarked wood packaging in the shipment is of US origin”; and
• If all of the WPM (in a shipment) is unmarked, shippers could more simply state, as applicable: “the wood packaging in the shipment is of Canadian origin”.

Deringer will continue to report on ISPM requirement changes for wood packaging materials shipping between the US and Canada. For questions regarding WPM, please send an email to compliance@anderinger.com.

The US Food and Drug Administration (FDA) published fiscal year 2015 fee rates for domestic and foreign facility reinspections, failures to comply with a recall order, and importer reinspections. The new rates were published on July 31, 2014, and are effective October 1, 2014, through September 30, 2015. Compared to 2014, the 2015 fees are slightly lower for domestic services at $217 per hour compared to $237. For services requiring foreign travel, fees increased slightly from $302 per hour to $305 per hour.

Under the Food Safety Modernization Act (FSMA), the FDA was granted authority to assess and collect fees from:

• the responsible party for each domestic facility and the US agent for each foreign facility subject to reinspection to cover reinspection-related costs;

• the responsible party for a domestic facility and any importer who does not comply with a recall order to cover food recall activities associated with such order; and

• each importer subject to a reinspection to cover reinspection-related costs.

FDA does not intend to issue invoices for recall order fees and foreign facility reinspection fees until they publish guidance regarding a process through which small firms may request a fee reduction.

FDA’s notice can be found online and questions can be directed to compliance@anderinger.com.

Ports on Canada’s West Coast continue to struggle with severe congestion. Faced with over capacity issues, many cargo shipments bound for US destinations through Canada’s West Coast ports are being diverted to US ports--primarily Seattle and Tacoma. Since this cargo was not initially bound for the US directly, it was not subject to US importer security filing (ISF) requirements. However, cargo being rerouted directly to US ports will be required to submit ISFs prior to US Customs and Border Protection accepting entries and allowing release. These late-filed ISFs will not be counted against importers’ on-time filing statistics.

Please send an email to compliance@anderinger.com with any questions.

Transpacific cargo shipments to the US and Canada have incurred GRI and PSS surcharges during August’s movements. While some charges have been mitigated, PSS and GRI charges on ocean bound cargo to Canada remain mostly unchanged. Deringer and its partners continue to work with the steamship lines to reduce the fees. The rates have meant many shippers have realized a $600 to $800 increase for a 20’ to a 40’ standard container in some lanes.

Capacity remains tight on the US and Canadian West Coast, as well as the US East Coast. CP Railway, one of Canada’s largest rail companies, struggles with over-demand causing additional cargo to move to US West Coast ports. Some US bound shipments transiting Vancouver have been diverted to US West Coast ports, primarily Seattle and Tacoma. According to US Customs and Border Protection, these shipments require importer security filings (ISF) prior to Customs entry and clearance (see 8/8 alert regarding ISF).

A truckers’ strike began in China’s Ningbo area on Monday, August 18, 2014. Owner-operators and trucking companies, primarily those involved in container drayage, are striking to raise transportation prices. Picket lines have been established in front of various large container depots in the area, which has prevented the movement of equipment and freight in and out of affected container yards. Many major roads connecting the port terminal and container yard have been blocked.

The government and truckers association did not reach an agreement when they met yesterday. Carriers are rerouting freight to different terminals when possible, but traffic bottlenecks, equipment shortages, and missed vessel loadings continue to occur.

Deringer’s overseas trucking partnership is not participating in the strike and is taking detours to the terminal; however, congestion continues to create problems in the area. Deringer will continue to monitor and report on the strike situation in Ningbo.

US Customs and Border Protection (CBP) headquarters issued a directive that specifies a new procedure for making post import claims for duty free or reduced duty treatment. The directive states that duty free treatment unclaimed at the time of entry, such as preferential tariff and free trade agreement claims, can no longer be recovered later by protest.

The changes indicated in the directive vary by preference program and free trade agreement. Duty free programs such as NAFTA, the Central America-Dominican Republic Free Trade Agreement (CAFTA-DR), and free trade agreements with Chile, Colombia, South Korea, Oman, Panama, and Peru will require a 1520(d) claim filed within one year of entry. Other duty free/reduced duty treatment programs will require a pre-liquidation Post-Entry Amendment (PEA) or Post-Summary Correction (PSC).

The CBP directive provides guidance to ports to reject duty preference claims filed by protest. Some experts of the trade anticipate that the directive will be challenged in court. Deringer is available to assist with importers’ post-entry needs and will continue to monitor this directive. Please send an email to compliance@anderinger.com with questions.

Transpacific ocean carriers are vying for a September general rate increase (GRI) for cargo shipments to the US. With solid bookings extending into next week, carriers will try to secure a US$600 per FEU GRI with an effective date of September 1, 2014. Additionally, carriers intend to charge an unspecified September 15th peak season surcharge. Space remains tight on cargo bound to the US East and West Coasts.

Many shippers previously diverted cargo from the US West Coast to the Canadian West Coast out of concern for a potential West Coast labor strike. Labor negotiations between the International Longshore and Warehouse Union (ILWU) and their management have been ongoing and promising. Heavy congestion at the port of Vancouver diverted cargo bound for the US via Vancouver to US West Coast ports. As a result, bookings for the US West Coast steadily grow.

The truckers’ strike in Ningbo, China, ended on August 24, 2014, after a week. The strike involved owner-operators and trucking companies who sought to raise rates. During the strike, picket lines blocked major roads and container yards causing traffic bottlenecks, equipment shortages, and missed vessel loadings.

As a result of the strike, trucking rates have increased 12 percent, which is the first increase in eight years. As Ningbo’s logistics and trade industry recovers from the strike, some regional freight forwarders are no longer taking new business and warehouses are overflowing. Deringer is still providing logistics services from and to the area.

Please contact your local Deringer representative to determine if any of your shipments are impacted. Thank you for partnering with Deringer.

The USDA Animal and Plant Health Inspection Service (APHIS) announced the release of its new Lacey Act Web Governance System (LAWGS) application, which will enable importers of record to file Lacey information via a web portal.  This does not replace the ability of Customs brokers to file data on behalf of importers via US Customs and Border Protection’s (CBP) ABI system, but provides an electronic means for those wishing to file Lacey information directly to the agency.  APHIS has scheduled webinars on September 10th & 17th to demonstrate the new capability to the trade and other interested parties.  

For additional information about the LAWGS system and information on the webinars, please visit the APHIS website.

Global congestion is a recurring theme. From Nhava Sheva and Qingdao to Prince Rupert and LA, a variety of issues are causing congestion at many ports worldwide. In some cases, departure dates are delayed overseas causing a ripple effect at destination.

Ports in Asia have confirmed some of the worst congestion experienced in the past 20 years, which has caused late sailings in some cases. Hong Kong, Shanghai, Qingdao, Inchon, and Ho Chi Minh City report delays created by slow steaming, consolidation of vessels’ service loops, and increased demand. Meanwhile, terminals at Nhava Sheva are taking up to 24 hours to gatein containers into port. Vehicle shortages and daily traffic jams have created back-ups 5km to 7km from Nhava Sheva ports.

Origin delays coupled with overcapacity issues have created a steamship parking lot outside Vancouver and Prince Rupert, as some vessels idle offshore, awaiting a terminal. Rail dwell times also continue to plague these ports with some US bound cargo bumped to later departures.

In the US, port congestion is worsened by a chassis shortage at Los Angeles-Long Beach, a problem also familiar to the port of New York-New Jersey. Some shippers have been subject to truck wait time charges and demurrage as an added complication of heavy congestion. There are multiple explanations for the chassis shortage. Increased import volumes and a higher prevalence of mega-ships that offload large volumes of containers during one port call contribute to chassis unavailability. However, many trade officials contend the chassis problem is more of a logistical issue than a shortage.

Equipment-leasing companies are procuring additional chassis to keep up with demand, but vessel-sharing arrangements have caused carriers to call on more than one terminal. Some terminals are begging for equipment while others have a surplus. The half-dozen chassis pools available in LA-Long Beach do not have a sharing agreement; therefore, a chassis belonging to one pool is not available to a trucker hauling a container for a customer of a competing chassis pool. A chassis shortage could cripple port operations. After the West Coast’s longshore union finishes contract negotiations with management, there is hope that a chassis stakeholder group will return to finding solutions to the chassis shortage problem.

Deringer will continue to provide updates on the congestion and chassis shortage.

The US Court of Appeals for the Federal Circuit (CAFC) reversed its position, now agreeing with the US Court of International Trade (CIT), that individuals could be held personally liable for attempting to introduce or enter goods through fraudulent or negligent documents or other information. This decision follows the CIT decision in US versus Trek Leather Inc. and Harish Shadadpuri.  

In the case, the CIT debated both the personal responsibility and level of culpability of Mr. Shadadpuri for failing to declare assists at time of importation.  Mr. Shadapuri had previously been cited by CBP for failure to declare assists for a separate company under his ownership. CBP took the position that this was particularly egregious and asked the court for maximum penalties of over $2,000,000 under the 592 fraud statute. The CIT agreed with CBP; however, the government was unable to meet the bar of proof necessary for a fraud conviction. Given the circumstances surrounding the case and his previous involvement in an identical situation, the court found Mr. Shadapuri jointly and severely liable for gross negligence along with his company.

Several prominent attorneys have stated that the court appears to have focused upon the conduct of introducing goods into the United States without a level of reasonable care. It was also observed that a person, in this case an officer of a corporation who acted negligently, would not be relieved of liability. More plainly, an individual in a case similar to this may not be protected by the corporate veil. It may take years and further litigation in order to settle this issue.

Some stakeholders in China’s shipping industry will have limited availability from October 1 to 7, 2014, in celebration of China’sNational Day. Additionally, shipping offices in Hong Kong will be closed October 1 and 2, 2014, for National Day and Chung Yeung Festival, while Taiwanese offices will be closed on October 10, 2014, for Taiwan National Day.

Please contact a Deringer service representative for additional information.

Terminals in LA and Long Beach are closed today after a fire broke out last night at the Port of Los Angeles. Early investigations indicate the fire was caused by a torch-welding operation. Nearby boats were moved to safety and no injuries were reported.

Although the blaze was contained within two hours, toxic smoke from the burned pier continues to pollute the immediate area. The dock was treated with creosote, which is used to prevent erosion. As a precaution, dock workers in LA and Long Beach were advised to call before returning to work tonight. It is unclear if they will return to work tonight or tomorrow.

Beginning October 1, 2014, US Customs and Border Protection (CBP) in Los Angeles and Long Beach will ramp up their importer security filing (ISF) enforcement. CBP at that port will begin placing manifest holds on full or consolidated container loads that do not have ISFs on file at least 72 hours prior to the ship’s arrival at US destination port. The legal requirement states that ISFs need to be filed 24 hours prior to cargo lading on the vessel at the foreign port. Since no accurate measurement provides a time when cargo is laden on a vessel, CBP uses hours from arrival at US port as a benchmark for enforcement.

Since enforcement began, CBP has practiced a measured enforcement approach of 48 hours prior to vessel arrival at US port. However, the change announced by CBP in LA/Long Beach tightens the enforcement time frame to 72 hours prior to arrival. Holds will be manually monitored by CBP to ensure the ISF information is filed before release. After a late ISF is filed, CBP will evaluate the information to determine if additional enforcement is warranted, including liquidated damages for repeat offenders.

Deringer anticipates that additional ports will follow this methodology, but LA/Long Beach is the only port using the 72 hour enforcement policy at this time. We recommend that all importers file ISFs timely, prior to vessel departure, to be in full compliance with the regulations. Deringer will continue to provide information and updates on ISF enforcement. For questions concerning ISF compliance, please send an email to compliance@anderinger.com or contact your Deringer representative.

Although the Generalized System of Preferences (GSP) has not been renewed for over a year, the US government issued a notice removing Russia’s trade benefits under the program. The statement stated that “Russia has advanced beyond the level of economic development and competitiveness for GSP eligibility.” The decision is in alignment with the World Bank, who categorizes Russia as a “high income country." The European Union and Canada have also removed Russia from similar programs.

The Animal and Plant Health Inspection Service (APHIS) has begun enforcement of their recent policy change regarding plant growth enhancers (PGEs) and products containing PGEs, such as peat moss and potting soil. Certain PGEs are exempt from the new requirement but many enhancers of an organic origin may need a permit in order to enter the US. These permits must be obtained from APHIS by the US importer and it may take eight to ten weeks to process.

Deringer recommends that importers of goods of this nature closely review their products to ensure future shipments are not refused admission to the United States. More information is available on the APHIS website under Regulated Organisms and Soil Permits or by contacting Deringer’s Compliance Department.

Container ships off the ports of Los Angeles and Long Beach are backed up as a result of peak season congestion, chassis and driver shortages, and larger vessels that require more time at berth to offload cargo. At any given time throughout last week, between five and eight ships were waiting for berths. However, officials say wait times are very unusual and the average has been three ships at anchor with wait times between 12 to 72 hours. In some cases, the Port of Long Beach is allowing cargo owners additional time to keep import containers on the dock before incurring demurrage.

Deringer recommends that importers and exporters continue planning their shipping strategies well in advance. By shipping early and diversifying routing, shippers can mitigate the impact to their supply chain. For additional information, send an email to marketing@anderinger.com.

Major steamship lines have been announcing monthly general rate increases (GRI) for transpacific cargo from the Far East and India to Canada and the US. In many cases, Deringer has been able to mitigate or eliminate the GRIs. Effective November 15, 2014, ocean carriers intend to implement a GRI that some trade officials believe will come to fruition.

$480 USD per 20'
$600 USD per 40'
$675 USD per 40’HC
$760 USD per 45’
$12 USD/cbm, US$12 min LCL

Deringer will continue monitoring announcements from the steamship lines and will work with them to mitigate the additional fees.

The US Customs and Border Protection’s (CBP) Centers of Excellence and Expertise (CEE) is a two year old pilot program that is transforming how shippers approach trade operations and their relationship with CBP and other government agencies. Each CEE is organized by commodity, specifically by range of harmonized tariff schedule numbers, and includes an exclusive team of industry professionals including import and supply chain specialists, attorneys, chief consul’s office, and commodity Customs experts. The program is meant to be aligned with industry-specific issues, as well as provide customized support to the unique requirements of different supply chains.

Regionally located, each CEE is assigned a general commodity. New York City houses the CEE for pharmaceuticals, health, and chemicals; whereas, the CEE for electronics is found in Los Angeles. The Detroit CEE is responsible for automotive and aerospace products; Chicago for base metals; Miami for agriculture and prepared products; Houston for petroleum, natural gas, and minerals; and San Francisco for apparel, footwear, and textiles. Additional CEEs are anticipated to be added in the future, but the current map of CEEs is on CBP’s website.

CEEs will increase consistency in Customs processes across the US, facilitate timely resolution of compliance issues, and create an agency stronghold of key industry knowledge and practices. Entry summary review and processing, protests, and post entry work will be handled by the CEEs; however, local ports of entry will continue to carry out revenue collection responsibilities. In addition to providing a centrally located bank of commodity experts, CEEs also act as a resource centers for importers. Amy Magnus, Deringer’s Director of Customs Affairs and Compliance, asserts, “Deringer has always benefited from being an early participant in pilot programs. Clients can benefit from these same opportunities, such as drawing on CBP’s limited resources. Besides, it’s better to be a volunteer and early adapter, than a program inductee.”

Currently, CEE is a voluntary program available via application process. However, trade experts anticipate that eventually all processing will be done through a CEE and not through local ports. Though still in a development phase, Deringer recommends that importers take advantage of the program while in its pilot phase. Once fully developed, the CEE resources may not be as plentiful—especially when the program becomes mandatory. Enrollment priority is given to Importer Self-Assessment (ISA) participants first, followed by Customs-Trade Partnership Against Terrorism (C-TPAT) participants, and then others who meet Federal Registrar requirements. Applicants should indicate if they are ISA or C-TPAT to achieve priority processing.

For additional information about the CEE’s, please send an email to compliance@anderinger.com.

Congestion issues on the US West Coast continue to plague importers and exporters whose shipments are delayed into and out of the ports of Los Angeles, Long Beach, Seattle, and Tacoma. Recently, the congestion has reached new levels causing traffic gridlock, extended wait times for ships waiting to berth, occasional intermodal interruptions, and some gate closures due to labor shortages.

In addition to a scarcity of truck drivers, chassis shortages, and high seasonal cargo volumes, some industry sources claim that International Longshore and Warehouse Union (ILWU) workers are causing slow downs contributing to the bottleneck. Shippers, and those organizations representing them, have begun to pressure the government to appoint a federal mediator. The ILWU contract expired on July 1, but until recently port operations were uninterrupted while the ILWU and management continued negotiations.

Many shippers have attempted to avoid the potential of West Coast labor disruptions by shipping through Canadian or East Coast ports. In some cases, re-routings have led to back-ups in these ports too. The ports of New York-New Jersey suffer from chassis shortages and congestion, and the port of Vancouver recently experienced bottlenecks that precipitated the railway to prioritize regular shippers over those previously using US ports. Deringer recommends that shippers make their shipping arrangements ahead of their inventory needs. Please contact your local Deringer representative for information about your shipments.  

Effective November 17, 2014, ocean carriers have implemented a surcharge applicable to vessels arriving, and cargo discharged, at US and Canadian West Coast ports. The charge is a result of the extreme congestion troubling West Coast ports, attributable to chassis and truck driver shortages, larger ships requiring more time at port, and increased cargo volumes. Although charges vary by carrier, surcharges are reported at the following approximate levels:

Deringer will continue to provide updates on the surcharge. Although this charge is widespread, Deringer will work with its partners to mitigate these additional, unanticipated fees whenever possible.

Yesterday, the West Coast port congestion surcharge was temporarily postponed due to Federal Maritime Commission (FMC) pressure; however, the surcharge resurfaced today with new reasoning and a new effective date. The FMC did not accept the previously communicated congestion surcharge because carriers attributed the charge, in part, to larger vessels taking more time at berth. Since carriers chose to invest in larger ships, the FMC did not accept the rationale as reasonable justification.
 
Carriers are reissuing the port congestion surcharge applicable to West Coast-bound cargo received at origin on or after November 26, 2014. Carriers claim that work slowdowns at West Coast ports have caused delays, including significant wait times outside the port. Rates vary but the quantum reported by some carriers is below:
 
$800US per 20’
$1,000US per 40’
$1,125US per 40’HC
$1,266US per 45’
$25US per w/m, $25 USD minimum
 
Deringer will continue to provide updates. Although the charge is widespread, we will work with our partners to mitigate these fees whenever possible.

On April 8, 2014, an assessment fee became applicable on Christmas tree importers and domestic producers. After a nearly two year delay, the Agricultural Marketing Service (AMS), a division of the US Department of Agriculture (USDA), lifted a sojourn on its marketing order. As a result of the order, Christmas trees imported into the US and domestically produced will be subject to a $0.15 fee per tree. The regulations set the fees to a minimum of $0.10 per tree and a maximum of $0.20 per tree. Outside that range, AMS would have to poll the Christmas tree industry again.

The marketing order was first created by AMS in November 2011 but delayed implementation to allow time for communication to the Christmas tree industry and the public. Under a 2014 farm bill, the stay on the assessment was lifted. The research and promotion program is a producer-driven program to support American farmers. After the Christmas Tree Promotion Board is established, the USDA will construct a packet of instructions for payment. The packet will be distributed to importers, but it is not yet known when the packet will be sent or made available. However, February 15, 2015, marks the due date for payments applicable to imports made October through December 2014. It is Deringer's understanding that CBP will not assess late fees as long as payment is made by February 15, 2015.

The regulations state that the assessment is applicable to Christmas trees, which are defined as “any tree of the coniferous species, that is severed or cut from its roots and marketed as a Christmas tree for holiday use.” Some of the Harmonized Tariff Schedule classifications included are 0604.91.00.20, 0604.91.00.40, and 0604.91.00.60, but fees may be applicable to other trees marketed as a Christmas tree. According to the order, the assessment must be paid by the importer of record at the time of entry. In the event that US Customs and Border Protection does not have the infrastructure in place to collect the fee directly, then the fee will be due 30 days following importation.

Exemptions to the order are applicable to those who domestically produce or import fewer than 500 Christmas trees per fiscal period. A certificate of exemption can be requested, or refunds will be granted for those who do not apply to the Christmas Tree marketing board for the exemption. Additionally, producers or importers whose Christmas trees are labeled 100% organic by the AMS National Organic Program, and are not split operations, are exempt from the fee.

Ocean carriers have again postponed the congestion surcharge intended to be imposed on cargo bound to the US West Coast. This marks the second time the surcharge has been issued and temporarily rescinded. Congestion around Los Angeles, Long Beach, and other West Coast ports remains high—with as many as 16 ships waiting to berth off LA/Long Beach last week. As a result, shippers have rerouted cargo to other ports and air lines have experienced a spike in traffic.

Deringer will continue to provide updates regarding the congestion surcharge. Thank you for your support.

Under the US Food and Drug Administration’s (FDA) Food Safety Modernization Act (FSMA), domestic and foreign facilities that manufacture, process, pack, or hold food for human or animal consumption in the US must register with FDA. Food facility registrations must be renewed every other year between October 1 and December 31 of each even-numbered year, such as 2014.

Effective January 1, 2015, imported goods from foreign food facilities that fail to register with FDA face denial of entry for those goods associated with that facility, as outlined in Section 801(l) of the Food, Drug, and Cosmetic Act. Foreign food facilities that aren’t renewed by December 31, 2014, will be subject to registration invalidation, which could result in the denial of the goods’ entry into the US.

For additional information about facility registration, please visit Deringer’s web page concerning FDA Food Facility Registration or send an email to compliance@anderinger.com.

The US Customs and Border Protection (CBP) issued CSMS #14-000634 announcing the formation of the National Marine Fisheries Service (NMFS) Working Group. NMFS has requested US importers of seafood for human or animal consumption to participate in a working group forum on CBP’s computer system, the Automated Commercial Environment (ACE)/ ITDS - International Trade Data System. The discussion will focus on the technical aspects (IT related issues) of ACE/ITDS, as well as required data for cargo release from Customs and other government agencies. NMFS and CBP officials currently working on the development and deployment of ACE will be part of this forum.

ACE/ITDS will require electronic release and entry submissions of all NMFS required import data for cargo admissibility, processed in an XML format under a NEIM standard. Your participation is requested to ensure a smooth transition to ACE/ITDS and to support compliant and efficient cargo releases.

Commitment to participating in this working group involves weekly conference calls that typically last two hours, taking place over a six to eight-week period. Please respond to Frank Korpusik, Sandra Scott, and Debbie Benish by Thursday, December 18, 2014, if you are interested in participating in this group.

Most transpacific ocean carriers have announced a general rate increase (GRI) effective December 15, 2014. The GRI applies to cargo originating in Asia and the Indian subcontinent to all destinations in the US, Canada, and Mexico. The proposed GRIs vary widely by carrier.

West Coast/IPI Destinations
20’         $320 - $800
40’         $400 - $1,000
40’HC    $400 - $1,125

East Coast/RIPI Destinations
20’         $400 - $560
40’         $500 - $700
40’HC    $500 - $855

Additionally, ocean carriers have already filed for a January 2015 GRI. Deringer will continue to provide updates regarding these charges and will work with its partners to mitigate them whenever possible. Please contact your Deringer representative for additional information.

Container ships are at anchor waiting to unload at the ports of Los Angeles and Long Beach. Up and down the US West Coast, port congestion has grown increasingly worse. Last week, the Pacific Maritime Association (PMA) announced that it would suspend night shifts in LA and Long Beach, stopping new ships from being loaded or unloaded at night, a move to allow for the terminal yard to be relieved of the excessive congestion. In a larger clean-up effort, the PMA announced today that loading and unloading have been suspended at US West Coast marine terminals for all shifts throughout Monday, January 19, 2015.

The International Longshore and Warehouse Union (ILWU) and Pacific Maritime Association (PMA), who are under intense negotiations to renew a contract that expired in July, disagree on the source of the congestion. ILWU claims the source of congestion is higher container volumes arriving on larger ships, as well as driver and chassis shortages, while the PMA asserts the ILWU has created work slowdowns. A federal mediator continues to help the ILWU and PMA resolve their contract differences, but tensions are mounting.

Deringer recommends that importers and exporters continue planning their shipping strategies well in advance. By shipping early and diversifying routing options, shippers can mitigate the impact to their supply chain. However, as West Coast congestion increases, rates to US East Coast destinations will also climb. For additional information, please send an email to marketing@anderinger.com.

Effective January 15, 2015, major steamship lines implemented general rate increases (GRI) for transpacific cargo from the Far East and India to the US and Canada. Carriers’ surcharges vary widely; average rates per forty foot equivalent unit (FEU) are as follows:

US/Canada West Coast: $50-$100 per FEU
US/Canada East Coast: $200-$400 per FEU

Carriers have announced an additional GRI of $600 per FEU planned for February as well. Deringer will continue monitoring announcements from the steamship lines and will work with them to mitigate the additional fees when possible. Please send an email to marketing@anderinger.com with any questions.

In less than 11 months, US Customs and Border Protection (CBP) will require all entry summaries to be filed in the Automated Commercial Environment (ACE). Currently, entry types 11, 01, and 03 (free and dutiable informal entry, free and dutiable consumption entry, and antidumping/countervailing duty consumption entry, respectively) are capable of being filed in ACE. Until CBP programs ACE for the other entry types, Customs brokers must continue to file them in CBP’s legacy system, the Automated Commercial System (ACS). While most shippers have seen little difference when entry processing transitions from ACS to ACE entry summary filing, there are a few important differences for which shippers can prepare.

Currently, entry summaries filed in ACS do not require consignees to be reported at the line detail level if the line on the entry summary is less than $2,500 and the entry is consolidated with multiple “sold-to” parties. The employer identification number (EIN) is not required for the release if the individual sale is less than $2,500, only the name and address is required. In ACE, parties to the transaction must be reported at the line level on the entry summary, regardless of value, which means an employer identification number (EIN), or social security number when shipping to an individual, will be required for the sold to party and consignees. This marks one of the most significant changes for shippers in the move from ACS to ACE.

In addition to the EIN or social security number, the shipper’s Manufacturers’ Identification (MID) must be reported as well. For type 03 entries, antidumping/countervailing duty consumption entries, the actual manufacturer and the foreign supplier at the line level will also need to be identified. Finally, once an entry summary is filed in ACE, the only acceptable Post Entry Correction must be made in ACE. Therefore, shippers who usually file their own Post Entry or Quarterly Post Entry Amendment (PEA) can no longer use that process.  

Shippers should prepare for ACE by capturing the new information that will be required for ACE filing. Deringer has been aggressive in transitioning our clients to ACE summary filing. Over 80% of all Deringer entry summaries are now filed in ACE. As CBP allows other entry types to be filed in ACE, the remaining 20% of Deringer’s customers’ entries will be filed in that platform. As always, your Deringer team stands ready to assist you with any questions regarding this important transition. Please contact Deringer's Compliance Department with questions.

The CEO of the Pacific Maritime Association (PMA), a group representing port employers on the West Coast, announced last week that port operations could come to a breaking point, stopping altogether, if an agreement isn’t reached with the International Longshore and Warehouse Union (ILWU) in the next five to ten days. The PMA suspended vessel loading and unloading at West Coast ports for the weekend of February 7th and 8th—further signaling their intentions to bring the situation to a resolution soon.

The PMA made an “all-in” contract offer to the ILWU to halt tensions in West Coast longshore negotiations. The PMA is threatening to completely shut down West Coast ports if the ILWU doesn’t respond to and accept the new terms, concluding that the latest offer is final.

The PMA’s offer is designed to bring nearly nine months of strained negotiations to a close. West Coast port operations have been severely impaired over the last three months, including significant delays at the ports of Tacoma, Seattle, Oakland, Los Angeles, and Long Beach. Some parties attribute the delays to intentional ILWU work slowdowns but others say the interruptions have been caused by increased cargo volumes, trucker and chassis shortages.

The proposed five-year contract under review presents an offer of increased compensation to members of the ILWU, raising member wages roughly 3 percent per year. It also includes fully paid health care benefits costing around $35,000 per worker per year.

Deringer recommends that importers and exporters continue planning their shipping strategies well in advance. By shipping early and diversifying routing options, shippers can mitigate the impact to their supply chain. However, as negotiations between PMA and the ILWU continue and West Coast congestion mounts, rates to US East Coast destinations will also climb. For additional information on the mounting West Coast situation, please email marketing@anderinger.com or contact your local Deringer representative.

Severe port congestion and ongoing labor disputes on the West Coast led harbor truckers in southern California, as well as several shipping lines, to declare force majeure, which means truckers will not be held responsible for the charges associated with the late return of equipment. Under force majeure, truckers are indicating that they cannot be held responsible for interrupted service that takes place beyond their control.

Authorities have received over 70 letters from truckers in the area stating that the current conditions compromise their ability to deliver or pick up containers at terminals in the ports of LA and Long Beach. Truckers maintain that terminal operators have issued notices in which they refuse to accept the return of empty containers, the delivery of containers for export, terminals closed to truck traffic, as well as expectations of immediate container pickups.

The Pacific Maritime Association, a group representing longshore employers, says that the port congestion and slowdowns could reach gridlock in less than ten days. Many shipping lines are billing truckers for demurrage and per diem charges and refuse to waive them. Daily rates can cause charges to mount quickly and waiting times are quite long extending outside terminal gates.

Some truckers have not been able to return empty containers to the port unless another container needs to be picked up at the same time. To avoid per diem charges, Deringer has attempted to contact steamship lines to request per diem extensions. Deringer’s relationships with local trucking companies remain strong, and we are working with them to minimize the impact to customers. Please contact your local Deringer representative with questions.

On Friday, February 20, 2015, a tentative agreement was reached by the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association. Normal working operations have returned at most West Coast ports in the US. However, trade officials predict that ports from Seattle to Los Angeles could take as long as three months to recover from the operations backlog. At times, more than 40 vessels have been anchored outside the ports of Los Angeles and Long Beach. While a finalized contract will help to resolve some of the ports’ challenges, the increasingly larger capacity ocean vessels and shortages of truck drivers and equipment may still hamper cargo flows.

The positive trend continued on Monday when the Canadian National Rail (CN) and Unifor, the union representing rail workers in Canada, also reached a tentative agreement. The agreement helped members avoid a major lock-out that was poised to happen. Ratification meetings will be held over the next three weeks.

Deringer will continue to provide information on the West Coast and CN Rail union agreements, as well as the West Coast backlog. For additional information or specific details regarding your shipments, please contact your local representative.

On Tuesday, March 4, 2015, a fire at the Port of Metro Vancouver ignited inside a shipping container located at the Centerm terminal. A bleaching agent and industrial disinfectant, called trichloroisocyanuric acid, was in the shipping container but the Vancouver Fire Department does not yet know how the fire started. The fire spread to a few surrounding containers and firefighters struggled to access the blaze, which was buried in container stacks.

The fire has largely been contained with a few flare-ups occurring overnight; however, health officials warn that the burning chemical can cause eye and skin irritations. The Centerm terminal and nearby port properties, including all south shore port operations, have been temporarily shut down including rail and truck access. A shelter-in-place order advised yesterday afternoon has now been lifted as smoke dissipates from the area. Updates on the fire at Centerm terminal can be found on the Port of Metro Vancouver’s website. Please contact your local Deringer service center for guidance regarding any impact to your shipments.

Since late February, ocean carriers have sent weekly announcements preparing shippers for pending transpacific general rate increases (GRIs) that did not come to fruition—until now. Many steamship lines have implemented GRIs for trade lanes from Asia and the sub-continent of India to the US effective April 9, 2015.

GRI charges vary widely by carrier for moves to the US East and West Coasts. US West Coast GRIs range from $240-$480 for full container load (FCL) moves. Fewer carriers have announced GRIs applicable to transpacific cargo moving to the US East Coast, but those announced have ranged from $40-$350. Additionally, EMC and OOCL have announced plans to implement transpacific GRIs to Canada beginning May 1, 2015. Deringer anticipates that other carriers will also assess GRIs to Canada if EMC and OOCL fulfill their intentions.

After months of worsening congestion, the ports of Los Angeles (LA) and Long Beach (LB) expect that cargo velocity will return to normal by next month. Port-side cargo congestion resulted in slow-downs throughout the West Coast intermodal network; however, clean-up efforts have gone more smoothly than previously announced. Many companies chose to deviate from their normal routing by shipping to northwest Canadian ports or to the East Coast to avoid the West Coast pile-ups. The ports of LA and LB hope cargo traffic returns to their berths once the congestion clears.

Deringer will continue to monitor and report carriers’ surcharge assessments, as well as the West Coast congestion clean-up. Please send an email to marketing@anderinger.com with any questions.

In the April 23rd Federal Register, the International Trade Administration (Department of Commerce) will provide notice that they seek public comments on subsidies, including stumpage subsidies, applicable to softwood lumber and softwood lumber products. The bi-annual solicitation for public comments is mandated under the 2008 Softwood Lumber Act and applies to HTSUSA 4407.1001. The solicitation covers the period from July 1 through December 31, 2014, and applies to countries that account for over 1% of US imports (i.e., Canada and Chile).

Parties making comments should include the name of the country providing the subsidy, the name of the subsidy program, a brief description of the program and the government or authority providing the subsidy. The original softwood lumber agreement extends through October 2015; therefore, this series of comments may have an impact on future agreements.

Truck drivers at the ports of Los Angeles and Long Beach (LA/LB) voted to strike starting today. The call to action is a result of Saturday’s vote, which was prompted by drivers’ frustration regarding compensation, insurance, and job security. Drivers are currently classified as independent contractors but seek classification as employees to gain workplace protections, disability insurance, workers’ compensation, and unemployment benefits. The Teamsters-supported movement targets four large drayage companies. About 200 of the estimated 500 truckers associated with the drayage companies began picketing this morning at seven terminals and at the drayage companies’ locations. Operations continue at the ports and disruption to cargo movement is minimal for now.

After months of port congestion at LA/LB, shippers are concerned about slowdowns. Deringer will continue to monitor and report further developments. Please contact a Deringer representative for specific information regarding your cargo.

On May 6, 2015, the Canada Border Services Agency (CBSA) announced renewed focus and milestone rollout dates for the implementation of the Advance Commercial Information (ACI) initiative. Similar to eManifest in the US, the regulations aim to enhance security through risk assessment evaluation of information prior to goods’ arrival by truck into Canada. Low risk cargo will also benefit from improved trade facilitation.

CBSA has advised the following timelines for implementation:

• Beginning May 6, 2015, through July 10, 2015, CBSA will provide carriers with a grace period to become compliant. During this time, CBSA will work with carriers to conform to the new law and penalties will not be applied.
• From July 10, 2015, to January 10, 2016, carriers found to be out of compliance with the eManifest requirements may be issued non-monetary penalties under the CBSA’s Administrative Monetary Penalty System (AMPS).
• Beginning January 10, 2016, carriers who do not comply with eManifest requirements may be issued monetary AMPS penalties.

Additional information regarding ACI is available on the eManifest section of the CBSA website. Also, an overview of Deringer's emanifest solutions is available on Deringer’s website or by sending an email to emanifest@anderinger.com.

By the end of May, West Coast ports anticipate operations should return to normal following many months of massive congestion. The crippling congestion was caused, in part, by work slow-downs at the ports resulting from tense contract negotiations between the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA). Votes to ratify the new contract between the ILWU and the PMA will be counted on May 22, 2015.

Los Angeles and Long Beach ports had up to 28 ships at anchor during peak congestion; now, the backlog has decreased to between 0 and 2 ships awaiting berth. Other West Coasts ports have shown similar improvement with quicker gate turn times from Tacoma, WA, through Oakland, CA. As West Coast ports recover, containerized imports into the US have hit record levels through some of the highest volume East and West Coast ports. Meanwhile, ocean carriers are testing market tolerance by continuing to promise general rate increases (GRIs).

While ports recover from congestion, some trade experts maintain that backlogs will continue because terminals on the West Coast do not have the infrastructure to handle the increased ship sizes on the water and in production. Additionally, the recent truck drivers’ strike at Los Angeles and Long Beach ended at the beginning of the month without causing significant disruption to operations; however, the drivers maintain that there will be additional action in the future.

Deringer will continue to support its customers by providing updates, as well as working with carriers to mitigate GRIs. For additional information, please send an email to marketing@anderinger.com.

US Customs and Border Protection (CBP) recently announced that effective May 17, 2015, exporters will become eligible to participate in the Customs-Trade Partnership against Terrorism (C-TPAT) program. The program, which since its inception a decade ago has applied solely to cargo security standards for certified importers, aims to support export growth and increase the competitiveness of the US business community. The export program’s initial focus will be to develop reciprocal agreements with foreign customs administrations that have signed a bilateral Mutual Recognition Arrangement (MRA) with CBP. In addition, the program will establish unified and sustainable global security partnerships that prioritize export shipments, heighten facilitation between mutually recognized customs partners, provide access to C-TPAT sponsored security seminars, and reduce examinations for exporters.

CBP previously advised the following C-TPAT qualifications for exporters:

• Be an active US exporter (exporting out of the US)
• Have a business office staffed in the US
• Have an Employer Identification Number (EIN) or Dun & Bradstreet (DUNS) number
• Have a documented export security program
• Commit to maintaining the C-TPAT supply chain security criteria
• Create/provide a security profile to CBP outlining internal policies to satisfy C-TPAT security criteria
• Have an acceptable level of compliance for export reporting for the last twelve months

Additional information regarding C-TPAT and access to the Exporter application is available on the Cargo Security and Examinations subsection of the CBP website.

On May 13, 2015, US Customs and Border Protection (CBP) announced the implementation of the Broker-Known Importer Program (BKIP). Similar to the Importer Self-Assessment Program (ISA) and Trusted Trader Program, the BKIP aims to streamline and enhance federal efforts to address import safety and compliance issues. Establishing a process whereby licensed US Customs brokers can identify importers who are exercising reasonable care in connection with their import related activities, the program will strengthen business partnerships between brokers and importers and enhance security through risk assessment evaluation of information prior to goods’ arrival.

The BKIP endeavors to increase consistency in Customs entry processes; strengthening compliance knowledge and related practices, and streamlining the establishment of secure supply chains for importers. As envisioned, participating brokers would review compliance obligations and transmit a Known Importer indicator when filing an entry on behalf of a Known Importer client. CBP could also offer importer benefits ranging from enhanced impact risk profiles to improved cargo targeting by CBP at the time of arrival.  

For additional information about the Broker-Known Importer Program, or questions on how to sign up, please send an email to Deringer’s Compliance Department.

On May 18, 2015, US Customs and Border Protection (CBP) announced the delay of the Customs-Trade Partnership Against Terrorism (C-TPAT) launch for exporters. CBP stated “enhancements that were indicated during the pre-release messaging, including the ability to apply as an exporter, will not be available until further notice.” The program, which would open the voluntary C-TPAT program to exporters for the first time and aid in the development of reciprocal agreements with foreign Customs administrations, was slated to launch on May 17, 2015 (see original release on Deringer’s website); a new date has yet to be announced.
 
Additional information regarding C-TPAT is available on the Cargo Security and Examinations subsection of the CBP website.

After nearly a year of negotiations, the International Longshore and Warehouse Union (ILWU) ratified a labor contract with West Coast port employers, the Pacific Maritime Association (PMA). The vote was ratified with 82 percent in favor. The five-year contract is retroactive to July 1, 2014, and is valid through July 1, 2019.

The ILWU and PMA began negotiations on May 12, 2014, and a tentative settlement was not reached until February 2015 with the assistance of federal mediation. The contract covers approximately 20,000 ILWU personnel at 29 West Coast ports, and the PMA includes 72 employers, including cargo carriers, terminal operators, and stevedores.

Additionally, ports continue to report progress recovering from the severe congestion that plagued the West Coast. For additional information concerning West Coast contracts or congestion, please send an email to marketing@anderinger.com.

On May 26, 2015, US Customs and Border Protection (CBP) announced the revised date for the Customs-Trade Partnership against Terrorism (C-TPAT) launch for exporters. CBP stated “the previous deployment attempt was delayed due to technical issues involving system response time. This issue has since been resolved, and additional testing will be conducted over the next week to further ensure system stability.” The program opens the voluntary C-TPAT program to exporters for the first time and aids in the development of reciprocal agreements with foreign Customs administrations. The program’s re-launch is scheduled to begin on June 1, 2015. For more information, please see Deringer’s original release.                          
 
Additional information regarding C-TPAT is available on the Cargo Security and Examinations subsection of the CBP website.

On June 29, 2015, President Obama signed the Trade Preferences Act of 2015, renewing the Generalized System of Preferences (GSP) trade program, the African Growth and Opportunity Act (AGOA), and the Haiti preference programs. GSP, which previously expired on July 31, 2013, impacts US imports from many countries; the program promotes economic growth in the developing world by providing preferential duty-free entry for thousands of products from designated beneficiary countries and territories.

As in past circumstances, GSP was reauthorized with retroactive effect. Importers of GSP-eligible products may seek reimbursement for tariffs paid since its expiration in July 2013. Importers who paid duty on GSP-eligible goods, and filed their entries electronically using the appropriate GSP indicator ("A", "A*", "A+"), should be automatically refunded. The refund, however, should be monitored to ensure liquidation or reliquidation. If no liquidation/reliquidation is initiated by November 1, 2015, importers should file a formal refund request by the December 28, 2015, deadline.

Importers with entries made without using the GSP program indicator should contact the port where the goods entered and request their GSP status from US Customs and Border Protection (CBP). The deadline for retroactive refund requests on entries without the GSP indicator must be claimed by the December 28, 2015, deadline with sufficient detail.

For additional information about the Generalized System of Preferences reauthorization and reimbursement questions, please send an email to Deringer’s Compliance Department.

Ocean carriers are imposing a General Rate Increase (GRI) and Peak Season Surcharge (PSS) on cargo bound to all points in the US and Canada from Far East and Indian origins. The GRI, which was scheduled to take effect on July 1, 2015, for both destinations has been postponed until July 15, 2015, in Canada. In the US, the GRI took effect as scheduled on July 1, 2015. The next anticipated GRI is August 1, 2015; however, ocean carriers will continue to assess market stability to determine an implementation date for subsequent rate increases. Additionally, steamship lines have announced their intention to assess a PSS effective August 15, 2015.

Published GRI levels effective July 1, 2015, for the US, and July 15, 2015, for Canada
20' Standard Containers: USD $540
40' Standard Containers: USD $600
40' High-Cube Containers: USD $675
45' Standard Containers: USD $760
LCL: USD $12 per CBM, min USD $12     

The published GRI rates are reflected above; however, Deringer has observed US GRI’s fluctuating between $200-400 depending on service/carrier and size.

Published PSS levels effective August 15, 2015
20' Standard Containers: USD $360
40' Standard Containers: USD $400
40' High-Cube Containers: USD $450
45' Standard Containers: USD $506
LCL: USD $8 per CBM, min USD $8    

Deringer will continue monitoring GRI announcements and will work to mitigate additional fees when possible. Please send an email to marketing@anderinger.com with any questions.

US Customs and Border Protection (CBP) recently made significant changes to its Customs-Trade Partnership Against Terrorism (C-TPAT) program portal, launched as Portal 2.0 Phase II. Given the comprehensive nature of these changes, all security profiles will require updating because information from the previous platform’s security profile did not transfer to the new portal. Also, an additional 33 process-oriented security questions have been added to this section, expanding the Security Profile to 66 topical areas that will require evaluation as part of this year’s annual review. Rationale for these changes include:

• Allowing trade partners the ability to maintain memberships in multiple partnership programs
• Improving SVI (partner monitoring) system for the industry and CBP
• Improving security profile
• Upgrading document library
• Facilitating harmonization with Canada Border Services Agency’s Partners in Protection Program (PIP)

Deringer is recommending that an analysis of your current processes be performed to ensure compliance with the recently updated portal requirements. This task may be time intensive, and the process must be completed prior to finalizing your annual C-TPAT review. At your request, Deringer will help analyze your current security procedures and assist with updating the C-TPAT Security Profile details now required. Please send an email to consulting@anderinger.com for questions or assistance.

Pacific 9 Transportation (Pac 9) drivers at the nation’s busiest port complex walked off their jobs on Tuesday, July 21. The call to action is the misclassification of drayage truck drivers as independent contractors instead of employees, thereby excluding them of higher pay, workplace protections, disability insurance, workers’ compensation, and unemployment benefits.

The Pac 9 walkout in Los Angeles-Long Beach stems from a labor dispute that spans nearly two years. The Teamsters-supported movement has gone on strike six times since 2013, most recently in April, as a result of frustration regarding compensation, insurance and job security, and Tuesday’s strike is “indefinite.”

The Teamsters bi-coastal strategy to amend the misclassification of truck drivers is seeking to work on a company-by-company basis to develop and ratify labor contracts, ensuring that drivers are classified as employees, and receive higher wages and company sponsored benefits.

Deringer will continue to monitor and report on the strike and labor dispute. Please direct any questions to marketing@anderinger.com.

Terminal traffic around India’s largest port, Nhava Sheva, is experiencing extensive delays due to recent strike activity at the GTI Terminal. Traffic back-ups are occurring up to 20 kilometers from unloading gates around the Nhava Sheva circle, taking trucks up to 14 hours to pick up export or import containers.
 
Carriers have warned of delays for all ongoing and upcoming shipment activity. Trade officials fear there could be shut-outs or additional charges as a result of the extreme congestion.
 
Deringer will continue to monitor and report on the congestion situation at Nhava Sheva. Please send an email to marketing@anderinger.com with any questions.

Ocean carriers are proposing a General Rate Increase (GRI) and Peak Season Surcharge (PSS) on US/Canada bound cargo from Far East and Indian origins. In the US/Canada, a previous GRI took effect as scheduled on August 1, 2015, and the next anticipated GRI is September 1, 2015. A PSS took effect as scheduled on August 15, 2015. In addition, steamship lines have announced their intention to assess an additional PSS effective September 15, 2015.

Published GRI levels effective September 1, 2015, for US/Canada
20' Standard Containers: USD $540
40' Standard Containers: USD $600
40' High-Cube Containers: USD $675
45' Standard Containers: USD $760
LCL: USD $12 per CBM, min USD $12     

Deringer has observed the August 1, 2015, GRI fluctuating between $200-$400 depending on service/carrier and container size. Along with our overseas partners, Deringer will try to mitigate the September 1, 2015, GRI increase; however, the market will ultimately determine carriers’ flexibility. There is potential for rates to be at, or close to, the published GRI levels reflected above.

Published PSS levels effective September 15, 2015
20' Standard Containers: USD $360
40' Standard Containers: USD $400
40' High-Cube Containers: USD $450
45' Standard Containers: USD $506
LCL: USD $8 per CBM, min USD $8    

Along with our overseas partners, Deringer has observed the August 15, 2015, PSS fluctuating between $180-$450 depending on service/carrier, lane, and container size.

Deringer will continue monitoring GRI/PSS announcements and will work to mitigate additional fees when possible. Please send an email to marketing@anderinger.com with any questions.

Following the devastating August 12, 2015, blast at the Port of Tianjin, in Northern China, port operations are slowly returning to normal. The explosion, which was suspected to be caused by dangerous materials, closed a portion of the EuroAsia Terminal; the other terminals at the port were unaffected and remain fully operational.

In the aftermath of the explosion, Chinese officials have banned the transport of hazardous materials on ships moving through the port, as well as oil and chemical tankers. Although shipments containing dangerous materials have been banned by authorities for the time being, all non-dangerous goods are being exported and imported.

Presently, all berths, off-dock depots, and terminals are fully operational. However, as a result of the explosion, berths are congested and experiencing low productivity, forcing vessels to stay in port longer than expected. Resulting from the congestion, US importers could experience delays receiving imports from China. The extent of supply chain disruption is currently unknown. Experts believe it could impact the global supply chain over the next few months and some trade officials speculate years of impact.

Environmental officials have observed levels of sodium cyanide, in both the air and water around the explosion zone, at levels substantially higher than the safety level. The implications from an environmental and human health standpoint could further hinder supply chain recovery as the workforce will be unable to return until the hazardous working conditions have been addressed.

In addition, an event of this magnitude makes the claim settling process challenging. It is estimated that insured losses from the explosions could potentially exceed $1.5 billion. Making the claim process more difficult, direct insurers and their policyholders have been unable to inspect, on site, the extent of loss and damage because of chemical contamination.

Please contact marketing@anderinger.com with any questions as the Port of Tianjin continues the recovery process.

On August 31, 2015, US Customs and Border Protection (CBP) announced the postponement of the Automated Commercial Environment (ACE) Single Window program. The bulletin stated that, “While significant capabilities have been deployed to date, concerns about stakeholder readiness have necessitated a reassessment of our current timelines.” In addition to the delay, CBP announced an updated timeline for the mandatory use of ACE. Adjusted mandatory transition to ACE for electronic entry and entry summary filing as follows:

November 1, 2015: Beginning of a transition period for electronic entry and entry summary filings in ACE to allow industry and participating government agencies (PGAs) more time to test and provide feedback as they fully transition into the new system. Use of ACE is allowed and encouraged for electronic entry and corresponding entry summary filings for entry types 01, 03, 11, 51, and 52 with or without PGA data.

February 28, 2016: At this time, filers will only be permitted to file entries and entry summaries in ACE. ACS will no longer be available. In addition, electronic FDA, NHTSA, and APHIS (Lacey) data must be filed in ACE, and ACS will no longer be available.

July 2016: Upon publication of the Final Rule, ACE must be used for filing AMS, APHIS Core, ATF, CDC, DCMA, DDTC, DEA E&C, EPA, FSIS, FWS, NMFS and TTB data. Hybrid submissions will no longer be allowed. The requirement for FWS is contingent on the agency having its regulatory revisions in place by the July, 2016, publication of the CBP Final Rule eliminating hybrid filings.

The ACE system, designed to facilitate legitimate trade while enhancing border security, will improve consolidation, sharing, and processing of information submitted to CBP and government agencies. CBP does not expect that “the [extended] transition period initiated on November 1, 2015, [will impact the] December 2016 deadline for full implementation of the Single Window via ACE.”

For additional information about ACE, please send an email to marketing@anderinger.com. The ACE transition schedule for all electronic manifest fillings is available on the Customs and Border Protection website.

After issuing an advanced strike notice on September 4, 2015, members of the Container Trucking Association of Ontario (CTAO) officially walked off their jobs on Tuesday, September 8, 2015, and began to picket in front of CN Rail and CP Rail terminals in the Greater Toronto Area. The call to action stems from a disagreement over current container trucking industry rates. CTAO members cite that industry rates fail to adequately compensate drivers for their time and resources.

Patrick Rhodin, CTAO President, stated, “Unfortunately, there has not been any changes to the rates for the past 10 years in the container trucking industry except for longer working hours, higher cost of operations and maintenance of the fleet.” He further stated that CTAO members have, “on two separate occasions,” initiated meetings with transportation companies to discuss current rates and resolve their “outstanding issues” to ensure that drivers are compensated fairly. However, not all companies have attended the CTAO organized meetings.

Resulting from the “continuation of low rates, longer working hours and waiting time at terminals,” the CTAO membership collectively decided to launch an indefinite strike until plausible solutions are offered. Officials in the trade state that CTAO members are also engaging non-union drivers for support, encouraging them to honor the picket lines.

The CTAO is scheduled to meet today, September 9, 2015, and transportation companies are hopeful that members will return to work in the coming days.

Deringer will continue to monitor and report on the strike. Please direct any questions to marketing@anderinger.com.

Members of the Container Trucking Association of Ontario (CTAO) continue to strike over increased working hours, higher operating costs, and fleet maintenance, while rates remain unchanged. Hundreds of owner-operators and independent contractors refuse to pick up or deliver containers and have established picket lines near CN Rail and CP Rail terminals in the Greater Toronto Area (GTA). Many companies will no longer send drivers to the area because intimidation tactics have been reported by truckers who continue to work.

After failed negotiations yesterday, CTAO drivers and trucking company owners planned to meet again today but no details are yet available. Deringer is monitoring the situation closely and will continue to provide updates. Cargo owners will be responsible for storage, demurrage, detention or diversion charges resulting from the strike; however, Deringer will use our resources to mitigate the effects as much as possible.

If you have any questions about your particular shipment, please send an email to marketing@anderinger.com.

The US Food and Drug Administration (FDA) announced recently that it will require the submission of entry and shipping documents (bills of lading, air waybills, commercial invoices, etc.) for entries of FDA-regulated goods that originated from, were stored in, or transited through the Binhai New Area industrial center in Tianjin, China. The increased surveillance is one of the steps being taken in the aftermath of the August 12, 2015, chemical explosion that occurred at the Tianjin Dongjiang Port Rui Hai International Logistics Co.

The explosion site, a storage and distribution center for containers with hazardous chemicals, housed sodium cyanide (NaCN), toluene diisocyanate (TDI) and calcium carbide (CaC2), all of which are toxic and pose a direct threat to human health.

In order to verify that products are not contaminated from the explosion, the FDA will review all entry and shipping documents to determine if the shipment was in the Tianjin, China area on or after August 12, 2015. Products that left Tianjin before August 12, 2015, should not require additional review outside of the routine FDA admissibility review.

Human and animal food products, human and animal drug products, and medical devices that left the Port of Tianjin on or after August 12, 2015, will require additional information in order for the FDA to make an admissibility decision.

The FDA is, therefore, requesting that importers (or their entry filers) submit the following information related to the products they are importing:

1. If you are not the end commercial user of the product, provide information identifying all known recipients of the product.
2. Explain the physical disposition of the product at the time of the explosion and for the time between the explosion and when it left the city of Tianjin, including the following: A) Where was the product located (geographical location) at the time of the explosion and in the aftermath of the explosion through the present? B) How the product was packaged (primary, secondary, wrapped pallet, shipping container, etc.) at the time of the explosion and in the aftermath through present.
3. Explain whether risk assessment tests were conducted to determine the impact of the August 12, 2015, explosion on the safety of your product. And, if so, explain your methodology and the outcome of your assessment.
4. Explain what testing has been conducted or is planned to be conducted on the product to identify contamination associated with the explosion.

Importers are advised that it may speed the FDA’s review process if entry documentation and, for shipments indicated for examination or sampling, location and availability information is provided in a timely manner. The FDA strongly recommends the submission of documents via electronic means, such as the agency’s Import Trade Auxiliary Communication System (ITACS). Instructions on how to use ITACS can be found on the FDA's website.

Deringer will continue to provide updates regarding supply chain effects related to the Tianjin explosion. If you have any questions about your particular shipment, please send an email to compliance@anderinger.com.

Yesterday, on September 16, 2015, the Container Trucking Association of Ontario (CTAO) reached an agreement with container trucking companies after nine days of tough negotiations. The work stoppage included picket lines established near CN Rail and CP Rail terminals in the Greater Toronto Area, as well as reports of intimidation tactics for drivers that continued to work. An agreement was finalized between the two parties last night, which includes a “fair percentage increase in rates” for the first time in a decade and addresses terminal wait times.

Container movements should regain momentum in the area today. However, cargo owners should be aware they may be responsible for storage, demurrage, detention, or diversion charges incurred during the strike. Deringer will continue using our resources to mitigate the effects as much as possible. If you have questions about your particular shipment, please send an email to marketing@anderinger.com.

Ocean carriers are proposing a General Rate Increase (GRI) on cargo bound to all points in the US and Canada from Far East and Indian origins. In the US/Canada, a previous GRI which was scheduled to take effect on October 1, 2015, was postponed until October 15, 2015. In addition, steamship lines have announced their intention to assess an additional GRI on November 1, 2015.

Published GRI levels effective October 15, 2015, and November 1, 2015, for US/Canada
20' Standard Containers: USD $540 
40' Standard Containers: USD $600
40' High-Cube Containers: USD $675
45' Standard Containers: USD $760
LCL: USD $12 per CBM, min USD $12     

Deringer has observed previously implemented GRI’s fluctuating between $200-$400 depending on service/carrier and container size. Along with our overseas partners, Deringer will try to mitigate the upcoming rate increases; however, the market will ultimately determine carriers’ flexibility.

Deringer will continue monitoring GRI announcements and will work to mitigate additional fees when possible. Please send an email to marketing@anderinger.com with any questions.

On October 7, 2015, US Customs and Border Protection (CBP) announced that the Softwood Lumber Agreement 2006 (SLA 2006) between the US and Canada will expire on October 12, 2015, and that CBP will discontinue enforcement of the softwood lumber regulations effective October 13, 2015.

The SLA 2006 was designed to regulate Canadian lumber exports to the US. Under the terms of the agreement, the US ended collection of countervailing and anti-dumping duties on imported Canadian softwood lumber, and Canada imposed taxes and quantitative restrictions on softwood lumber exports to the US. 

The CBP release states that CBP will no longer enforce Export Permit Number, Region of Origin, and Original Maritime Certificate of Origin requirements. In addition, any Maritime COO’s received on or after October 13, 2015, should be returned to the importer, and filers in ACE/ACS should enter a “dummy SLA 2006 number, P88888888 (P followed by eight 8’s), when applicable.” 

While Canadian lumber exporters shipping to the US, on or after October 13, 2015, will no longer be subject to export fees, the Government of Canada will begin monitoring shipments of softwood lumber products following the expiration of SLA 2006. The monitoring program, beginning October 13, 2015, and administered by the Minister of Foreign Affairs, seeks to collect data on Canadian manufactured softwood lumber exports. Softwood lumber products will continue to be recognized on the Export Control List (ECL), and lumber exporters will need to obtain an export permit, ensuring that the Canadian Government will be able to track softwood lumber shipments to the US. 

In addition, CBP will continue to enforce the Softwood Lumber Agreement 2008 (SLA 2008) and the related reporting requirements for any shipment of softwood lumber and softwood lumber products imported into the United States from any country and subject to the importer declaration program.

For additional information about the Softwood Lumber Agreement, please send an email to compliance@anderinger.com. For information regarding the Canadian Government’s monitoring of softwood lumber exports, please visit the Government of Canada’s website.

After ten years of negotiation, the Trans-Pacific Partnership (TPP) Agreement has reached Capitol Hill. TPP would eliminate or reduce tariff and non-tariff barriers for goods and services and covers the full spectrum of trade and investment. TPP would eliminate more than 18,000 taxes and trade barriers applied to US-made products, as well as offer trade benefits to 11 member countries including Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.

The comprehensive agreement covers 30 chapters of trade and trade-related issues, from trade of goods through customs and trade facilitation, sanitary and phytosanitary measures to intellectual property. TPP parties agree to eliminate and reduce tariff and non-tariff barriers on industrial goods, as well as eliminate or reduce tariffs or other restrictive policies on agricultural goods. While tariffs on industrial goods would be eliminated immediately, tariffs on other products would be removed over a longer time frame. Additionally, the rules of origin, defining where a particular commodity originates, have been simplified to universally apply to all participating countries.

As TPP makes its way through Congress, Deringer will continue to provide updates. An overview of the agreement can be found on the Office of the United States Trade Representative’s website. Additionally, the US Department of Commerce has provided an online database with filters to help stakeholders find additional, specific information regarding the agreement. Please contact Deringer’s Compliance Department with specific questions about TPP.

On October 26, 2015, US Customs and Border Protection released a message from the Food and Drug Administration (FDA) updating the FDA’s scope of increased surveillance of certain FDA regulated products transited through the Binhai New Area Industrial Center and Xiditou Township of Beichen in Tianjin, China.

The message comes in the wake of a second blast, occurring on October 12, 2015, in a chemical warehouse owned by Tianjin Yong Sheng Fine Chemical Co., Ltd.; the blast site is suspected to have contained 3,000 kilograms of alcohol, 1,000 kilograms of acetic acid, 800 kilograms of glycerinum, and 500 kilograms of both sodium and potassium hydroxide. Other chemicals that may be associated with the explosion remain unknown.

In accordance with the previous FDA regulations, importers will be required to submit entry and shipping documents (bills of lading, air waybills, commercial invoices, etc.) for entries of FDA-regulated goods that originated from, were stored in or transited through the warehouses.

In order to verify that products are not contaminated from the explosions, the FDA will review all entry and shipping documents to determine if the shipment was in the Tianjin, China area on or after August 12, 2015. Products that left Tianjin before August 12, 2015, should not require additional review outside of the routine FDA admissibility review.

Human and animal food products, human and animal drug products, and medical devices that left the Port of Tianjin on or after August 12, 2015, will require additional information in order for the FDA to make an admissibility decision.

The FDA is, therefore, requesting that importers (or their entry filers) submit the following information related to the products they are importing:

1. If you are not the end commercial user of the product, provide information identifying all known recipients of the product.
2. Explain the physical disposition of the product at the time of the explosion and for the time between the explosion and when it left the city of Tianjin, including the following: A) Where was the product located (geographical location) at the time of the explosion and the aftermath of the explosion through the present? B) How the product was packaged (primary, secondary, wrapped pallet, shipping container, etc.) at the time of the explosion and in the aftermath through present.
3. Explain whether risk assessment tests were conducted to determine the impact of either the August 12, 2015, or October 12, 2015, explosion on the safety of your product. And, if so, explain your methodology and the outcome of your assessment.
4. Explain what testing has been conducted or is planned to be conducted on the product to identify contamination associated with the explosion.

Importers are advised that it may speed the FDA’s review process if entry documentation and, for shipments indicated for examination or sampling, location and availability information is provided in a timely manner. The FDA strongly recommends the submission of documents via electronic means such as the agency’s Import Trade Auxiliary Communication System. Instructions on how to use ITACS can be found on the FDA's website. For additional information or assistance regarding this process, please send an email to compliance@anderinger.com. 

In the aftermath of the Tianjin port explosions, China’s top eight container ports continue to feel the after-effects. Three ports, Shenzhen, Dalian, and Tiajin have seen modest falls in September. Tianjin, site of the explosions and China’s sixth-largest container port, dropped by more than 25 percent year-over-year in September to 922,000 20-foot-equivalents units; the port was down almost 28 percent in August. The remaining five ports, Shanghai, Ningbo-Zhoushan, Qingdao, Guangzhou, and Xiamen showed minimal gains over last September. On a year-to-date basis, the top eight ports are showing an increase of 3.71 percent over the first nine months of 2014, to 111.56 million TEUs. 

If you have any questions about your particular shipment, please send an email to marketing@anderinger.com.

Ocean carriers are proposing a General Rate Increase (GRI) on US/Canada bound cargo from Far East and Indian Origins. In the US/Canada, a previous GRI scheduled to take effect on November 1, 2015, for both destinations, was delayed until November 15, 2015. In addition, major steamship lines have announced their intention to assess an additional GRI effective December 1, 2015.

Published GRI levels effective November 15, 2015, and December 1, 2015, for US/Canada
20' Standard Containers: USD $540 
40' Standard Containers: USD $600
40' High-Cube Containers: USD $675
45' Standard Containers: USD $760
LCL: USD $12 per CBM, min USD $12     

Deringer has observed previously implemented GRIs fluctuating between $150-$400 depending on service/carrier and container size. Along with our overseas partners, Deringer will try to mitigate the upcoming rate increases; however, the market will ultimately determine carriers’ flexibility. There is potential for rates to be at, or close to, the published GRI levels.

Deringer will continue monitoring GRI announcements and will work to mitigate additional fees when possible. Please send an email to marketing@anderinger.com with any questions.

Major Steamship Lines have announced their intention to assess a General Rate Increase (GRI) on all US/Canada bound cargo from Far East and Indian origins.  In the US/Canada, a previous GRI scheduled to take effect on December 1, 2015, for both destinations, was postponed.

For all 2016-2017 service contracts, liners in the “Transpacific Stabilization Agreement” (TSA) are seeking to establish long-term minimum rates of $1,700 per 40-foot equivalent unit (FEU) for containers moving to the West Coast and $2,900 per FEU to the U.S. East and Gulf Coasts.

GRI Levels Effective January 1, 2016

For Shipments to all US/Canadian destinations to/via West Coasts ports of Discharge
20' Standard Containers: USD $1,080
40' Standard Containers: USD $1,200
40' High-Cube Containers: USD $1,350
45' Standard Containers: USD $1,520
LCL: USD $24 per CBM, min USD $24     

For Shipments to all US/Canadian destinations to/via East Coast and US Gulf ports of Discharge
20' Standard Containers: USD $1,440
40' Standard Containers: USD $1,600
40' High-Cube Containers: USD $1,800
45' Standard Containers: USD $2,025
LCL: USD $32 per CBM, min USD $32
     
Along with our overseas partners, Deringer will try to mitigate the upcoming rate increases.  Ultimately, the market will determine carriers’ flexibility. However, as a result of global economic uncertainties and a decline in spot-market rates on containerized shipments from Asia to the US/Canada, rate volatility is possible and there is potential for rates to be at, or close to, the published GRI levels. In addition, shippers should prepare for increased rates throughout 2016.

Deringer will continue monitoring GRI announcements and will work to mitigate additional fees when possible. Please send an email to marketing@anderinger.com with any questions.

On June 29, 2015, President Obama signed the Trade Preferences Act of 2015, renewing the Generalized System of Preferences (GSP) trade program, effective June 29, 2015, through December 31, 2017. The program, reauthorized with retroactive effect, enables importers to claim duty refunds for all duties paid on GSP-eligible merchandise entered or withdrawn from a warehouse for consumption during the lapse period from August 1, 2013, through July 28, 2015.

The duty refund process was divided into three phases, described below:

Phase I: Importers who paid duty on GSP-eligible goods, and filed their entries electronically using the appropriate GSP indicator (“A”, “A*”, “A+”), were automatically processed. Phase I processing was completed on September 28, 2015, with headquarters successfully processing 98 percent of such entry summaries.

Phase II: The remaining 2 percent of importers that filed their entries electronically using the appropriate indicator and received no liquidation/reliquidation; this group was assigned to the ports for further investigation, duty refund determination, and duty refund processing. The Phase II target completion date was November 6, 2015. Most ports have completed Phase II processing; however, some ports have requested extensions.

Phase III: The processing of importer-initiated refund requests submitted to the ports for entries made without using the GSP indicator. GSP refund requests received after December 28, 2015, will be denied. The sole exception is a re-submission of a previously submitted request.

Ports that have completed Phase II (manual refund processing) have begun Phase III processing of importer and broker initiated requests.

For those importers initiating their own duty refund requests; requests may be submitted as letters, Post Entry Amendments (PEA), Post Summary Corrections (PSC), Protests, or using other written medium (please be advised that this is not a “true Protest” but in this instance is an acceptable vehicle to claim a GSP refund).

Additional information about the Generalized System of Preferences reauthorization is available through CBP's Cargo Systems Messaging Service (CSMS). For additional questions, please send an email to Deringer’s Compliance Department.

Surcharge rates for the Alameda Corridor, in Southern California, are set to increase effective January 1, 2016. The expressway, which encompasses routes between Los Angeles, Long Beach, and intermodal rail yards 20-25 miles inland (east of downtown Los Angeles), allows trains to bypass 90 miles of 20th-century branch lines, and avoid more than 200 street-level railroad crossings.

The Alameda Corridor Transportation Authority (ACTA) created and implemented this fee, which was designed to pay off the debts of constructing and operating the Alameda Corridor.

Alameda Corridor Surcharge (ACS) Levels Effective January 1, 2016

Scope: for any shipment transported through the ports of Los Angeles or Long Beach, moving on rail, between the harbor and inland rail ramps.

20’ Standard Containers – US $24 (US $1 increase from current)
40’ Standard Containers – US $48 (US $2 increase from current)
40’ High-Cube Containers – US $48 (US $2 increase from current)
45’ Standard Containers – US $54 (US $2 increase from current)

Deringer will continue to provide port/surcharge updates and announcements. Please send an email to marketing@anderinger.com with any questions.

Beginning January 11, 2016, the Canadian Border Services Agency (CBSA) will begin enforcing the monetary penalty phase of the Administrative Monetary Penalty System (AMPS) for highway carriers who do not comply with the Advance Commercial Information (ACI) eManifest pre arrival cargo and conveyance data requirements. Highway carriers who do not comply will experience delays and may incur monetary penalties. The regulatory amendments supporting ACI/eManifest were originally published on May 6, 2015, in the Canada Gazette, Part II. The CBSA granted Canadian businesses and trade partners a six month grace period, from July 10, 2015 to January 10, 2016, where those identified for non-compliance with ACI requirements were issued zero-rated AMPS penalties.

In addition, to provide clients with an opportunity to correct compliance violations, the CBSA introduced a 30-day non-escalation period of penalty levels from the first to the second level for low and medium risk contraventions in the automated system. AMPS penalties are progressive; multiple occurrences of the same contravention by the same client receive progressively higher penalty amounts.

Examples of ACI eManifest non-compliance that result in AMPS penalties (please view the Master Penalty Document, available on the CBSA website, for a full list of infractions subject to monetary penalties):

1. ACI submitted was not true, accurate and/or complete.
2. Failure to submit the ACI related to cargo and/or conveyance.
3. Failure to submit ACI in the prescribed time or prescribed manner.
4. Failure to comply with a notification issued by the CBSA regarding the goods on board or expected to be on board the conveyance.
5. Failure to submit a notification within prescribed timeframes of any correction to any ACI.
6. Person failed to transmit the Conveyance Arrival Certification Message (CACM) as the Governor in Council may prescribe. Person failed to report conveyances inbound and/or upon arrival.

Deringer and the CBSA remain committed to supporting clients in their transition to eManifest throughout the implementation phase through online resources and dedicated client support activities. Visit the CBSA website regularly and subscribe to the eManifest Web feed to be notified of important eManifest updates. For the most up-to-date information about Canadian eManifest, please visit the eManifest section of the CBSA website. For additional questions, please send an email to Deringer’s Compliance Department.

Ocean carriers are proposing a Peak Season Surcharge (PSS) on US/Canada bound cargo from Far East and Indian origins. The PSS is anticipated on January 15, 2016. In addition, steamship lines have announced their intention to assess a General Rate Increase (GRI) effective January 1, 2016 (please see previous release).

Published PSS levels effective January 15, 2016, for US/Canada

20' Standard Containers: USD $360
40' Standard Containers: USD $400
40' High-Cube Containers: USD $450
45' Standard Containers: USD $506
LCL: USD $8 per CBM, min USD $8

Deringer, along with our overseas partners, will continue monitoring GRI/PSS announcements and will work to mitigate additional fees when possible. Please send an email to marketing@anderinger.com with any questions.

The Department of Energy (DOE) is proposing a new rule that would require persons importing products and equipment covered under/subject to an applicable energy conservation standard to provide a certification of admissibility to the DOE through the Automated Commercial Environment (ACE). Comments, data, and information regarding the newly proposed rule are due no later than February 12, 2016.

The proposed rule differs from current DOE regulations that require persons importing covered goods to submit annual certifications ensuring all products are compliant with applicable energy conservation standards.

The DOE’s proposed rule works in coordination with the requirement for federal agencies to use the International Trade Data System and ACE to create a single window through which businesses will electronically submit import-related data for clearance. This regulation would require importers of covered goods falling under specified HTSUS numbers to provide a certification of admissibility for each shipment of such goods through ACE before their arrival at a US port of entry. The DOE states that this requirement would apply to all such goods contained in the shipment, either as a final product or a component part of a final product.

For all shipments of covered goods, the importer would be required to provide the DOE certification with applicable energy conservation standards, the CCMS ticket number, the CCMS attachment identification number assigned to the certification submission, and the line number corresponding to the certified goods. For products contained within the shipment that have not been certified to the DOE through CCMS, the importer would be required to include, for certification of admissibility, the type of good, its brand name and individual model number, the original equipment manufacturer of the good, and a contact name and e-mail address for the importer of record.

For further information about the DOE’s proposed rule, a listing of affected HTS numbers, and contact information for submitting comments, please see Federal Register Volume 80, Number 249. For additional questions, please send an email to Deringer’s Compliance Department.

Workers at Europe’s biggest container port, the Port of Rotterdam, organized a strike to take place today, Thursday, around 3 pm CET; the strike is expected to last 24-hours and will cease all container activities, which means that ships will neither be loaded nor unloaded.

Today’s strike stems from employee concerns over the introduction of automated terminals in Maasvlakte 2, including one of APM’s Terminals in Rotterdam. It’s projected that the increased automation would lead to nearly 800 redundancies of the 4,000 jobs in the port over a five-year period.

The port workers’ union, FNV Havens, rejected their employer’s last offer of a job guarantee through July 1, 2020, in a ballot that took place at the end of last week. The union is reportedly seeking an arrangement that guarantees job security until at least 2022 for all employees who had a permanent job on January 1, 2015, at any of the container terminals.

If you have any questions about your particular shipment, please send an email to marketing@anderinger.com. Deringer will continue to monitor and report on the strike situation in Rotterdam.

On January 10, 2016, Ontario’s newly constructed Nipigon River Bridge split. The bridge, which connects Eastern and Western Canada, is vital to the health of the country’s commercial transportation network. While a portion of the bridge was reopened on January 12, 2016, for passenger vehicles and regular-weight transport trucks, officials were unable to say how long it might take to repair the bridge to accommodate oversized trucks.

Resulting from the bridge failure, transport traffic in the area has backed up; roughly 1,300 trucks cross over that stretch of the Trans-Canada Highway each day, carrying $100 million worth of food, mail, machinery and other goods, according to 2012 figures provided by the Canadian Trucking Alliance.

Presently, the only option for transport truckers crossing Northern Ontario is to detour through the US. That detour has proven increasingly difficult as security regulations increased after the Sept. 11 attacks, resulting in the majority of domestic shipments driving through Canada, the chief executive officer of the Canadian Trucking Alliance said Monday. 

The Canada Border Services Agency (CBSA) is currently working with the trucking industry to develop temporary solutions to ease the strain on domestic transport. Deringer will continue to monitor and report on the situation in Ontario. If you have any questions, please send an email to marketing@anderinger.com. 

The Food Safety Modernization Act (FSMA), signed into law on January 4, 2011, imposes significant new regulations designed to prevent the sale and consumption of contaminated food products, to proactively respond to foodborne illness and minimize contamination risk, and to secure the food chain, ensuring that imported food comes from registered foreign facilities and meets US health, safety, and quality standards. 

The FSMA regulations establish a framework of enforceable safety standards; everyone, from the producers to the consumers, will be impacted by the new regulations. For importers, a thorough review of your current supply-chain, including verification of overseas suppliers (audits of a supplier’s facility, sampling and testing of food, or a review of the supplier’s relevant food safety records), will be essential to identify risk areas which could lead to noncompliance.

Since January 2013, the FDA has proposed seven fundamental regulations to implement the FSMA. Businesses must comply with each rule one year after it is released. All regulations become final by year-end in 2016.

1. Preventive Controls for Human Food (Final Rule): Facilities that manufacture, process, pack, or hold human food must maintain and implement a written food safety plan (hazard analysis, preventive controls, monitoring procedures and corrective action).

2. Preventive Controls for Animal Food (Final Rule):  Animal feed manufacturers must comply with various aspects of operations such as good hygiene practices, proper maintenance of plants, pest control, sanitation principles, and labeling of ingredients and finished products.

3. Fresh Produce Safety (Final Rule): Companies that grow, harvest, pack, and hold produce that is typically consumed raw must comply with standards around water, health, hygiene, equipment, facilities, and training.

4. Foreign Supplier Verification Program (FSVP) (Final Rule): Importers must verify their suppliers are employing prevention-based food safety practices. Importers will need to have a plan in place that identifies potential hazards for all food items they are importing.

5. Third Party Accreditation (Final Rule): The combination of this rule, plus the FSVP, shifts the focus from relying on the FDA to find problems at import to proactively preventing problems.

6. Sanitary Transportation (Proposed Rule): Shippers, carriers, receivers, and others transporting food must comply with requirements for vehicle and transportation equipment, transportation operations, training, and documentation.

7. Intentional Adulteration (Proposed Rule): Facilities that use certain processes that are likely targets of terrorism must have a written defense plan.

*Two rules were published in September, 2015 (Preventive Controls for Human Food and Preventive Controls for Animal Food), three more were published in November, 2015 (Foreign Supplier Verification Program, Third Party Accreditation, and Fresh Produce Safety). The final two rules are schedule for Spring, 2016 (Sanitary Transportation in April, 2016, and Intentional Adulteration in June, 2016).

In addition to the FDA’s proposed regulations, the FSMA expands upon the FDA’s ability to oversee food safety by improving their ability to identify and resolve issues of food contamination, enhancing detection and response to food safety issues, and establishing a safer food import system.

In its entirety, the FSMA will have a profound effect on both importers and the food industry. Giving the FDA and US Customs and Border Protection (CBP) more authority in carrying out mandates that ensure food safety, the FSMA will require importers, warehouses, and distributors to install precautionary measures to proactively fight against food contamination. For importers, this means ensuring compliance throughout the supply-chain. Importers must verify foreign suppliers, assess safety plans and high risk areas, establish and document preventive measures (to address potential audits), create a recall plan outlining how each product is manufactured/managed, and plan for increased surveillance and sampling at the border. Noncompliance with the FSMA regulations could result in CBP seizing, and possibly destroying, food imports (the FDA and CBP can retain goods with only a reasonable belief that they are noncompliant – opposed to the previous regulation requiring credible evidence).

Deringer remains committed to supporting clients throughout the implementation phase of the FSMA. For information and guidance about the FSMA, please visit the FDA website. For additional questions, please send an email to Deringer’s Compliance Department.

Port terminals on the US North Atlantic Coast are bracing for the impact of Winter Storm Jonas on Saturday, January 23, 2016. The severe winter storm is already dumping snow on southern and mid-Atlantic portions of the US and has East Coast ports revising their operational hours ahead of Saturday.

The Port of Virginia intends to maintain regular operations at its Hampton Roads marine terminals on Friday, January 22, but will cease operations at both the Richmond Marine Terminal and Virginia Inland Port at Front Royal in the early afternoon.

At the Port of New York and New Jersey, the GCT Bayonne container terminal, which has maintained operations throughout the weekend in recent weeks to handle heavy volume, will close on Sunday (the terminal is expected to resume Sunday gate hours of 6 a.m.-1 p.m. on January 30).

In addition, the Port Authority of New York and New Jersey have stated that all of the ports’ terminals are scheduled to be open for normal hours on Monday. The Port Authority expects to issue an update at 2 p.m. ET on Sunday.

In Maryland, the Port Administration is scheduled to halt work within public terminals at 7 p.m. on Friday.

The Port of Philadelphia has not made any changes to their regular operations. Because the storm is expected to arrive in the area Friday evening, the impact to the area will be largely during the weekend, when terminals are closed, but the storm could limit or prevent some in-terminal activity, a spokesman said.  

Deringer will continue to monitor Winter Storm Jonas; depending on the severity of the storm, there is the potential for significant delays and supply chain disruption. If you have any questions, please send an email to marketing@anderinger.com

The US Customs and Border Protection (CBP) released a new glossary of terms for the Automated Commercial Environment (ACE) on December 22, 2015. The Cargo Systems Messaging Service (CSMS) #15-000956 announced the glossary’s release, which details, “status notifications and processing results of ACE Cargo Release transactions with PGA (Partnering Government Agency) Message Set data.” The glossary of terms includes some verbiage new to the trade community.

The terms below are covered at length in the message. New terms are denoted with an asterisk and briefly explained below:

• May Proceed
• Partial Refusal
• CBP Release
• CBP Conditional Release
• CBP Conditional Release Period
• Hold Intact (*Requires examination by governing PGA)
• One USG
• Under Review (*CBP and/or PGA(s) are reviewing entry and will advise a “May Proceed” or “Hold Intact” status)
• Rejected
• Refused (*CBP or PGA regulatory body prohibits merchandise from entering the US commerce)
• Documents Required
• Intensive Exam
• Sample Required (*Sample of merchandise is required by CBP and/or PGA and must be delivered to the specified location)

Deringer recommends shippers become familiar with the existing and new terms before the approaching transition to ACE. Please contact Deringer's Compliance Department with questions about the transition to ACE or glossary of terms.

Several shipping lines have reported a dramatic increase in container dwell times at the GCT Delta Port, in Vancouver, over the last few days. Those shippers are also reporting that the Vancouver terminals serviced by CN and CP rail are the most severely impacted.

Questioning of the carriers discovered that a large quantity of missing rail cars has yet to be returned to Vancouver after being previously sent into the US. This is causing a huge backlog and in some cases increased container dwell time up to 14 days; however, Delta Port is publishing an average of 6 days dwell time.

In addition, GCT Delta Port is undergoing a large intermodal yard reconfiguration (construction at the facility is forcing a small amount of containers to be trucked off the terminal to VIT to alleviate congestion).

Presently, the shipping lines most affected are: Maersk, Hapag Lloyd, CMA-CGM, OOCL, MSC, ZIM, CSCL, and COSCO.

If you have any questions about your particular shipment, please send an email to marketing@anderinger.com. Deringer will continue to monitor and report on the congestion in Vancouver.

In a statement released by the Port Authority of New York and New Jersey, workers have staged an apparent walk off at port terminals in both states. It’s not immediately clear what preempted the strike, or how long it will last, but it appears to stem from a labor dispute. Attempts to reach the International Longshoremen’s Association, the union for port workers, have been unsuccessful.

The Port Authority has stated that there are heavy traffic backups at the terminals and “no truck operations at this time.” Due to the stoppage, no new trucks will be allowed to queue on port/access roadways. “The port authority is utilizing all available efforts to resume activity,” and truck drivers are being urged to avoid the ports. 

If you have any questions about your particular shipment, please send an email to marketing@anderinger.com. Deringer will continue to monitor and report on the walk off at the Ports of NY/NJ.

The US Customs and Border Protection and partnering government agencies (PGAs) are migrating to the Automated Commercial Environment/International Trade Data System (ACE/ITDS) from the Automated Commercial System (ACS). The next major implementation date occurs at the end of February 2016. As a result, the US Food and Drug Administration (FDA) is modernizing its processes.

To help fulfill some of the new requirements associated with ACE, FDA has worked with Dun & Bradstreet (D&B) to create an online portal for stakeholders to search for a specific Data Universal Number System (DUNS) number to provide to FDA along with the firm name and address. The D&B website “provides trade, at no cost, the ability to look up; verify; update; and if necessary, request new DUNS Numbers for use on FDA ACE/ITDS transactions, via a simple web interface.”

FDA’s announcement regarding the FDA ITDS/DUNS Portal, a quick user guide, and a step-by-step instruction guide is available on FDA’s website. For additional information, please contact Deringer’s Compliance Department.
 

US Customs and Border Protection (CBP) has worked closely with the Department of Homeland Security, the Border Interagency Executive Council, and the White House to actively track and assess stakeholder readiness for the mandatory filing of all electronic entries and corresponding entry summaries in the Automated Commercial Environment (ACE). While CBP has observed significant progress being made, “continued concerns about stakeholder readiness have necessitated an updated timeline for the mandatory transition to ACE.” The updated approach to mandatory filing is still expected to align with CBP’s December 2016 deadline for full implementation of ACE.

To view CBP’s statement and updated ACE transition schedule please click here.

For additional information about ACE, please send an email to compliance@anderinger.com. The ACE transition schedule (including entry/entry summary type definitions) for all electronic manifest fillings is available on the Customs and Border Protection website.

On January 25, 2016, the Transportation Security Administration (TSA) sent a directive to US aircraft operators, US all-cargo aircraft operators, foreign air carriers, and foreign all-cargo air carriers requiring that they not bring into the US any cargo that originated or transited through points in Egypt, Syria, Somalia or Yemen; the directive is part of the US Department of Homeland Security’s (DHS) efforts to continue enhancing existing Security Directives (SD) and Emergency Amendments (EA).

Under the most recent SDs and EAs, the air carrier is responsible for certifying, based on available documentation, which cargo did not originate or transit through specific regions. Resulting from the revised SDs and EAs, freight forwarders with air cargo operations at non US locations should expect to see updated requirements for all shipments destined for the US.

The TSA states, “in particular, U.S. aircraft operators, U.S. all-cargo aircraft operators, foreign air carriers, and foreign all-cargo air carriers will be requesting that certain information be provided for all shipments on each Master Air Waybill (MAWB) or House Air Waybill (HAWB) that they accept for transportation from a non US location to the US.” 

Should the air carrier be unable to determine shipment origin or routing point, based upon the available waybill documentation, then the information requested by the carrier “may also include a specific statement (specific language to be provided by the aircraft operator/foreign air carrier) in which the freight forwarder attests that, after reviewing the documentation for each MAWB or HAWB and to the bests of its knowledge, the shipment(s) did not originate or transit through the regions identified by the air carrier.”

If you have any additional questions or concerns, please send an email to marketing@anderinger.com. In addition, the TSA encourages the forwarding community to reach out to the Air Carriers for additional guidance.

The United States and any other country that is party to the International Maritime Organization’s (IMO) Safety of Life at Sea (SOLAS) container weight mandate may delay implementation of the weight rule past the July 1, 2016 deadline.

According to Article VIII(b)(vii)(2) to the amendment to the Safety of Life at Sea convention, each of the 162 signatory nations may delay the implementation of SOLAS by up to one year. Any nation choosing to do so would be required to inform the IMO of the delay before the rule takes effect on July 1.

US exporters have been outspoken in their requests for revision of the new rule. Earlier this month, they called on the Coast Guard to delay the rule until it can be amended and determined that US exporters will not face a competitive disadvantage against foreign exporters. 

The rule, which requires the shipper named on the bill of lading, or a designated representative, weigh the cargo by either measuring the contents of the container and adding it to the unladen weight of the container, or by weighing the sealed container and its contents as one, and then submitting the Verified Gross Mass (VGM) to the carrier and marine terminal in advance of vessel stowage to allow for stowage plans to be created.

The Coast Guard has responded to initial calls for delaying implementation of the rule; citing the difficulty of delay given the global rollout of the rule, the Coast Guard states that “foreign flag-ships, which carry the vast majority of containers from the US, would be bound by their flag states’ requirements not to load the containers in US ports as the VGM had not been verified.” In addition, if the US was to issue a unilateral delay, US-flag fleet and US container ships could still be at risk because the new regulations would still apply at foreign ports.

On February 18, 2016, the Coast Guard will host a public meeting on the VGM mandate at the Federal Maritime Commission headquarters in Washington, DC. If you have any additional questions or concerns, please contact Deringer’s Marketing Department.

Each year in Quebec, the Ministry of Transportation (MTO) enacts spring weight restrictions that limit loads carried across at-risk highways. The policy, created to prevent road damage and provide a safe and consistent network of highways for the transport of goods, targets commercial carriers and takes into account vehicle length, axle load and spread, and the total loaded mass of vehicles and vehicle combinations.

For customers shipping to/from the Province of Quebec, please see the projected dates of enforcement below.

Quebec:

Zone 1: Monday, March 14th to Friday, May 13th
Zone 2: Monday, March 21st to Friday, May 20th
Zone 3: Monday, March 28th to Friday, May 27th

For native French speakers, details and updates regarding Quebec’s spring weight restrictions can be found on the MTO website. If you have any additional questions or concerns regarding Quebec’s commercial weight requirement, please contact Deringer’s Marketing Department.

On Wednesday, February 24, 2016, President Obama signed into law the Trade Facilitation and Trade Enforcement Act of 2015 (H.R. 644) (TFTE Act). The wide-ranging law, also referred to as the Customs Reauthorization Bill, addresses among other things, the de minimis value of goods on which Customs and Border Protection (CBP) requires entry to be filed. More commonly known as Section 321, the legislative change will allow most goods with a value of $800 or less to enter the United States free of duty and fees and without filing an entry.

It is possible that beginning as early as March 11, most low-value import shipments will not be subject to duties or formal customs procedures.

While CBP will allow most cargo to be cleared as Section 321 for values under $800, the regulations on de minimis do not extend Section 321 clearance to all products. Products regulated by Participating Government Agencies (PGAs) for example, certain products regulated by the Food and Drug Administration (FDA), Consumer Product Safety Commission (CPSC), National Highway Transportation and Safety Administration (NHTSA), Food Safety Inspection Service (FSIS) and Center for Disease Control (CDC), to name a few, cannot be cleared under Section 321. 

Please contact Deringer’s Compliance Department if you have imports subject to PGAs and have questions regarding the individual PGA requirements (as they vary by PGA), or for general information about Section 321 clearance and the de minimis value increase. The full text of the Trade Facilitation and Trade Enforcement Act of 2015 can be found on congress.gov (please see section 901).

Major Steamship Lines have announced their intention to assess a General Rate Increase (GRI) on all US/Canada bound cargo from Far East and Indian origins.  In the US/Canada, a previous GRI scheduled to take effect on March 1, 2016, for both destinations, was postponed.

GRI Levels Effective April 1, 2016

For Shipments to all US/Canadian destinations:
20' Standard Containers: USD $540
40' Standard Containers: USD $600
40' High-Cube Containers: USD $675
45' Standard Containers: USD $760
LCL: USD $12 per CBM, min USD $12     
     
Along with our overseas partners, Deringer will try to mitigate the upcoming rate increases.  Ultimately, the market will determine carriers’ flexibility. However, as a result of global economic uncertainties and a decline in spot-market rates on containerized shipments from Asia to the US/Canada, rate volatility is possible and there is potential for rates to be at, or close to, the published GRI levels.

Deringer will continue monitoring GRI announcements and will work to mitigate additional fees when possible. Please send an email to Deringer's Marketing Department with any questions.

On March 23, 2016, US Customs and Border Protection (CBP) issued a guidance announcing that the final six Centers of Excellence and Expertise (CEEs) started handling the post-release operations for their respective industries. In addition to announcing the final six CEEs, the notice also provides clarification on the authority of Center Directors versus that of a Port Director. According to the CBP guidance, “Port Directors and Center Directors will communicate and collaborate to issue informed and consistent determinations and decisions effectively.” Further clarifications and exceptions are identified in the text of the notice.

The final industry CEEs include:

1. Agriculture and Prepared Products                                                                          
2. Automotive and Aerospace                                                                                   
3. Base Metals                                                                                                 
4. Consumer Products and Mass Merchandising                                                                   
5. Industrial and Manufacturing Materials                                                                      
6. Machinery      

The above mentioned CEEs join four others – Apparel, Footwear and Textiles, Electronics, Pharmaceuticals and Chemicals, and Petroleum and Minerals – that already handle the post-release processing for their respective industries.

The guidance provided by CBP on March 23, 2016, closely follows the agency’s initial delegation order in 2014 regarding the first three CEEs (here). Please address any questions or concerns to Deringer’s Compliance Department.

Ocean carriers are proposing a General Rate Increase (GRI) on cargo bound to all points in the US and Canada from Far East and Indian origins. In the US/Canada, a previous GRI which was scheduled to take effect on April 1, 2016, was postponed until April 15, 2016. In addition, steamship lines have announced their intention to assess an additional GRI on May 1, 2016.

Published GRI levels effective April 15, 2016

For Shipments to all US/Canadian destinations:
20' Standard Containers: USD $540 
40' Standard Containers: USD $600
40' High-Cube Containers: USD $675
45' Standard Containers: USD $760
LCL: USD $12 per CBM, min USD $12 

Published GRI levels effective May 1, 2016

For Shipments to all US/Canadian destinations:
20' Standard Containers: USD $1080
40' Standard Containers: USD $1200
40' High-Cube Containers: USD $1350
45' Standard Containers: USD $1520
LCL: USD $24 per CBM, min USD $24

Along with our overseas partners, Deringer will try to mitigate the upcoming rate increases.  Ultimately, the market will determine carriers’ flexibility. However, as a result of global economic uncertainties and a decline in spot-market rates on containerized shipments from Asia to the US/Canada, rate volatility is possible and there is potential for rates to be at, or close to, the published GRI levels.

Deringer will continue monitoring GRI announcements and will work to mitigate additional fees when possible. Please send an email to Deringer's Marketing Department with any questions.

An April 11, 2016, advisory from the Panama Canal Authority provided notice that, based on the present and projected level of Gatun Lake, effective May 9, 2016, the maximum authorized transit draft is set at 11.59m (38.0 feet) Tropical Fresh Water (TFW), as follows:

1. Vessels loaded to drafts over 11.59 meters (38.0 feet) prior to or on April 11, 2016, will have this draft restriction waived for transit, subject to safety considerations.
2. Vessels loaded after April 11, 2016, shall comply with this new draft limitation.
3. Vessels arriving with drafts over 11.59m (38.0 feet), TFW, may be allowed transit after May 9, 2016, depending on the level of Gatun Lake at the time of transit. Otherwise, they will be required to trim or off-load cargo in order to transit.

In addition, carriers have announced weight limits on USEC service via Panama:                      
(Weight = cargo weight + tare weight)
HJS: Control weight as 9 tons per TEU for AWH/AWT/AWC/AWY
OOCL: Control weight as 8.1 tons per TEU for NYE
EMC: Control weight as 7 tons per 20' GP & 10 tons per 40’ GP & 40’ HQ for NUE
COSCO: Control weight as 9 tons per TEU for AAE1/AAE2/AAE3/AWE1/AWE3/GME and 7.5 tons per TEU for AWE2

As in the past, draft restrictions will be implemented in 15-centimeter (six-inch) decrements at a time, with each announced at least four weeks in advance. Vessels already loaded to the prevailing draft limitation at the time of announcing new draft restrictions will have this draft restriction waived for transit, subject to safety considerations.

Presently, there is no expiration date for the above draft restrictions. The Panama Canal Authority will eliminate the restrictions once the Gatun Lake level returns to normal. Please send an email to Deringer’s Marketing Department with any questions.

Effective April 24, 2016, the description for HTS 9801.00.10 is changing to allow foreign goods, previously entered for consumption into the US, to return duty-free if they are returned within three years of the export from the US.

Text of 9801.0010 prior to 4/24/2016:

Products of the United States when returned after having been exported, without having been advanced in value or improved in condition by any process of manufacture or other means while abroad...

 Text of 9801.0010 on or after 4/24/2016:

Products of the United States, when returned after having been exported, or any other products when returned within 3 years after having been exported without having been advanced in value or improved in condition by any process of manufacture or other means while abroad...

Customs will require some evidence that the goods are returning within 3 years of exporting from the US. We recommend that importers confirm that they have proof of export before using this HTS for foreign goods. Acceptable proof of export can be, but is not limited to:

1. Canadian B3 entry with accompanying import invoice
2. Entry documents into another country
3. Carrier’s bill of lading (signed)
4. Legible proof of delivery
5. US Customs Form 4455 (Certificate of Registration)

Customs has not given any information at this time regarding required documentation for this new provision. However, we suspect that Customs will require evidence that the returning goods were not exported from the US under Drawback, 9813 (TIB), or were exported from an FTZ or Customs bonded warehouse in the US.

This change is authorized by the Trade Facilitation and Trade Enforcement Act of 2015. Please send an email to Deringer’s Compliance Department with any questions.

Ocean carriers are proposing a General Rate Increase (GRI) on cargo bound to all points in Canada from Far East and Indian origins; the GRI, previously scheduled for May 1, 2016, is now expected to be implemented on May 15, 2016.

Published GRI levels effective May 15, 2016
For Shipments to all Canadian destinations:

20' Standard Containers: USD$1,080
40' Standard Containers: USD$1,200
40' High-Cube Containers: USD$1,350
45' Standard Containers: USD$1,520
LCL USD$24 per CBM, min USD$24

Deringer has observed previously implemented GRI’s fluctuating between $100-$400 depending on service, carrier, and container size. Along with our overseas partners, Deringer will try to mitigate the upcoming rate increases; however, the market will ultimately determine carriers’ flexibility.

Deringer will continue monitoring GRI announcements and will work to mitigate additional fees when possible. Please send an email to marketing@anderinger.com with any questions.

In the April 28, 2016, Federal Register, the International Trade Administration (Department of Commerce) provided notice that they are seeking public comments on subsidies, including stumpage subsidies, applicable to softwood lumber and softwood lumber products. Solicitation for public comments every 180 days is mandated under the 2008 Softwood Lumber Act and may apply to the HTS numbers listed below. The solicitation covers the period from July 1, 2015, through December 31, 2015, and applies to countries that account for over 1% of US imports (i.e., Canada and Chile).

Parties making comments should include the name of the country providing the subsidy, the name of the subsidy program, a brief description of the program and the government or authority providing the subsidy. As part of its newest report, the Department intends to include a list of subsidy programs identified with sufficient clarity by the public in response to this notice.

Comments are due on or before 5PM EST, May 28, 2016.

Sample of HTS Numbers Impacted
4407.10.0101    4407.10.0102    4407.10.0115    4407.10.0116
4407.10.0117    4407.10.0118    4407.10.0119    4407.10.0120
4407.10.0142    4407.10.0143    4407.10.0144    4407.10.0145
4407.10.0146    4407.10.0147    4407.10.0148    4407.10.0149
4407.10.0152    4407.10.0153    4407.10.0154    4407.10.0155
4407.10.0156    4407.10.0157    4407.10.0158    4407.10.0159
4407.10.0164    4407.10.0165    4407.10.0166    4407.10.0167
4407.10.0168    4407.10.0169    4407.10.0174    4407.10.0175
4407.10.0176    4407.10.0177    4407.10.0182    4407.10.0183
4407.10.0192    4407.10.0193    4409.10.0500    4409.10.1020
4409.10.1040    4409.10.1060    4409.10.1080    4409.10.2000
4409.10.9020    4409.10.9040    4418.60.0000    4418.90.2500
4418.90.4605    4418.90.4695    4421.90.7040    4421.90.9780

Effective June 15, 2016, the Automated Commercial Environment (ACE) will become the sole CBP authorized electronic data interchange (EDI) system for processing electronic entries and entry summary filings accompanied by Food and Drug Administration (FDA) data.

Effective June 15, 2016, the below entry types must be filed within ACE:

1. - 01 Consumption – Free and Dutiable
2. - 03 Consumption – Antidumping/Countervailing Duty
3. - 06 Consumption – Foreign Trade Zone (FTZ)
4. - 11 Informal – Free and Dutiable
5. - 23 Temporary Importation Bond (TIB)
6. - 51 Defense Contract Administration Service Region (DCASR)
7. - 52 Government – Dutiable

Entry types that must continue to be filed in ACS until further notice: 

02 – Consumption (Quota/Visa), 07 – Consumption (Antidumping/Countervailing Duty & Quota/Visa Combination), 08 – NAFTA Duty Deferral, 09 – Reconciliation Summary, 12 – Informal (Quota/Visa, other than textiles), 21 – Warehouse, 22 – Re-Warehouse, 31 – Warehouse Withdrawal (Consumption), 32 – Warehouse Withdrawal (Quota), 34 – Warehouse Withdrawal (Antidumping/Countervailing Duty), 38 – Warehouse Withdrawal (Antidumping/Countervailing Duty & Quota/Visa Combination), 41 – Direct Identification Manufacturing Drawback, 42 – Direct Identification Unused Merchandise Drawback, 43 – Rejected Merchandise Drawback, 44 – Substitution Manufacturer Drawback, 45 – Substitution Unused Merchandise Drawback, 46 – Other Drawback, 61 – Immediate Transportation, 62 – Transportation and Exportation.

To view the CBP notice, please visit the Federal Register website. If you have any additional questions or concerns, please contact Deringer’s Compliance Department.

With the July 1, 2016, deadline quickly approaching, the US Coast Guard has offered guidance regarding SOLAS. In their April 28, 2016, declaration on Equivalency to Regulation, they offer multiple acceptable methods for providing verified gross mass (VGM).

The Coast Guard has determined that existing US laws and regulations for providing verified container weights are equivalent to the requirements in SOLAS; the Coast Guard notes that the current regulatory regime “provides for other entities within the container export chain to work in combination with the shipper to determine and verify container weights, and it provides ships’ masters with container weights in order to ensure ships are loaded and operated safely.”

Acceptable methods for providing VGM:

1. Shipper gets entire container weighed on a certified scale.
2. Shipper weighs all packages and adds tare weight of container, visible on the container door.
   a.    Needs to include all packaging materials, pallets, and dunnage
   b.    No estimates are permitted
   c.    Not acceptable for cargo such as scrap metal, bulk grain, other bulk cargo, or cargo types that do not lend themselves to individual weighing

The methods outlined above acknowledge and rely upon a “dynamic and flexible” business relationship between shippers and carriers to ensure compliance with the SOLAS amendments that come into effect July 1, 2016.

In coordination with the Coast Guard’s April 28 announcement, port authorities in several states have declared their intent to provide container weights to exporters: both the Ports America Terminal Operator at the Port of Baltimore and Port of Newark Container Terminal at the Ports of NY/NJ have stated that they will be offering fee based container-weighing services to shippers. The Port Authority of Georgia and Port of Charleston in South Carolina both announced they will be weighing shippers’ containers at no cost, while a spokesman from the Port of Virginia did not comment on whether the port intended to charge for its service. The Virginia port authority, however, did announce that a more detailed operating policy on the matter would be forthcoming.

While some East Coast ports are offering container-weighing services in order to help shippers comply with SOLAS regulations, terminals in the Los Angeles-Long Beach port complex have concerns about the service. A spokesman said that terminal operators are uncertain they can weigh export containers with the precision that might be required under SOLAS, which could intensify gate congestion, especially at the largest US port complex.

In addition to the aforementioned Port Authorities SOLAS determinations, the Ocean Carrier Equipment Management Association (OCEMA), a group of 19 container lines, plans to issue a common tariff rule within the next week, stating that customers “won’t be held legally liable for inaccuracies in the container tare weight when generating a VGM under the new rule.”

With the deadline for SOLAS fast approaching, Deringer will continue to monitor any changes and provide updates. If you have any additional questions or concerns, please contact Deringer’s Compliance Department.

Effective July 23, 2016, the Automated Commercial Environment (ACE) will become the sole electronic data interchange (EDI) system for processing electronic entries and entry summary filings associated with most entry types. In addition, the Automated Commercial System (ACS) will no longer be a CBP authorized EDI system for processing the electronic filings specified within the May 23, 2016, Federal Register notice.

Effective July 23, 2016, the below entry types must be filed within ACE:

1. - 01 Consumption – Free and Dutiable
2. - 02 Consumption – Quota/Visa
3. - 03 Consumption – Antidumping/Countervailing Duty
4. - 06 Consumption – Foreign Trade Zone (FTZ)
5. - 07 Consumption - Antidumping/Countervailing Duty and Quota/Visa Combination
6. - 11 Informal – Free and Dutiable
7. - 12 Informal – Quota/Visa (other than textiles)
8. - 21 Warehouse
9. - 22 Re-Warehouse
10. - 23 Temporary Importation Bond (TIB)
11. - 31 Warehouse Withdrawal – Consumption
12. - 32 Warehouse Withdrawal – Quota
13. - 34 Warehouse Withdrawal – Antidumping/Countervailing Duty
14. - 38 Warehouse Withdrawal – Antidumping/Countervailing Duty & Quota/Visa Consumption
15. - 51 Defense Contract Administration Service Region (DCASR)
16. - 52 Government – Dutiable
17. - 61 Immediate Transportation
18. - 62 Transportation and Exportation
19. - 63 Immediate Exportation
20. - 69 Transit (Rail only)
21. - 70 Multi-Transit (Rail only)

Entry types that must continue to be filed in ACS until further notice:

08 – NAFTA Duty Deferral, 09 – Reconciliation Summary, 41 – Direct Identification Manufacturing Drawback, 42 – Direct Identification Unused Merchandise Drawback, 43 – Rejected Merchandise Drawback, 44 – Substitution Manufacturer Drawback, 45 – Substitution Unused Merchandise Drawback, 46 – Other Drawback. 

To view the CBP notice, please visit the Federal Register website. If you have any additional questions or concerns, please contact Deringer’s Compliance Department.

Ocean carriers are proposing a Peak Season Surcharge (PSS) on US/Canada bound cargo from Far East and Indian origins. The PSS is anticipated on June 15, 2016. In the US/Canada, a previous General Rate Increase (GRI) took effect as scheduled on June 1, 2016, and the next anticipated GRI is scheduled for July 1, 2016 (Deringer has observed present GRI rates fluctuating between $150-$600 depending on service/carrier and container size).

Published PSS levels effective June 15, 2016, for US/Canada

20' Standard Containers: USD $360
40' Standard Containers: USD $400
40' High-Cube Containers: USD $450
45' Standard Containers: USD $510
LCL: USD $8 per CBM, min USD $8 

Deringer, along with our overseas partners, will continue monitoring GRI/PSS announcements and will work to mitigate additional fees when possible. Please send an email to marketing@anderinger.com with any questions.

Ocean carriers are proposing a General Rate Increase (GRI) on cargo bound to all points in the US and Canada from Far East and Indian origins.  In the US/Canada, a previous GRI took effect as scheduled on June 1, 2016. In addition, steamship lines have announced their intention to assess a Peak Season Surcharge (PSS) on US/Canada bound cargo effective July 1, 2016.

Published GRI levels effective July 1, 2016

For Shipments to all US/Canadian destinations:
20' Standard Containers: USD $540
40' Standard Containers: USD $600
40' High-Cube Containers: USD $675
45' Standard Containers: USD $760
LCL: USD $12 per CBM, min USD $12

Published PSS levels effective July 1, 2016

For Shipments to all US/Canadian destinations:
20' Standard Containers: USD $360
40' Standard Containers: USD $400
40' High-Cube Containers: USD $450
45' Standard Containers: USD $510
LCL: USD $8 per CBM, min USD $8

Along with our overseas partners, Deringer will try to mitigate the upcoming rate increases. Ultimately, the market will determine carriers’ flexibility. However, as a result of global economic uncertainties and a decline in spot-market rates on containerized shipments from Asia to the US/Canada, rate volatility is possible and there is potential for rates to be at, or close to, the published GRI levels.

Deringer will continue monitoring GRI/PSS announcements and will work to mitigate additional fees when possible. Please send an email to Deringer's Marketing Department with any questions.

Effective June 15, 2016, the Automated Commercial Environment (ACE) became the sole CBP authorized electronic data interchange (EDI) system for processing electronic entries and entry summary filings accompanied by Food and Drug Administration (FDA) data.

To support the implementation of ACE, the FDA started a 24 hr/7day a week help desk (called the ACE Support Center). This call center addresses issues with ACE and helps facilitate the resolution of reported ACE entry problems. The FDA will continue to also provide e-mail support. Issues related to ACE entries can be sent to Ace_support@fda.hhs.gov. 

The Helpdesk went live on Tuesday, June 14, 2016. It can be reached at: 

Domestic Toll Free: 877-345-1101
Local/International: 571-620-7320

For shipments on the water on and after June 30, 2016, CBP ports will no longer need to run suggested penalty action by headquarters for approval and will be free to issue liquidated damage claims locally.

As of this date the so called 3-strikes rule, whereby penalty action was generally not initiated until the importer had been warned three times, will also end.

Consequently, importers could start seeing far more penalties issued for “errors” such as:

1. Failure to submit
2. Late submission
3. Failure to update
4. Failure to withdraw

Penalty amounts are $5,000 per ISF transmission error up to $10,000.

If you have additional concerns, or are an importer petitioning for mitigation or cancellation of these penalties based on mitigating and aggravating factors, please contact Deringer’s Logistics Consulting Group with any questions.

Yesterday, Britain voted to leave the European Union (EU) by a slim margin. The “Brexit,” as it has come to be known, leaves a wake of uncertainty regarding worldwide economic and trade implications. Over the next two years, Great Britain will discuss its new relationship with the continent, including trade. While these negotiations take place, Great Britain anticipates that it will take an “extended period to negotiate…trade deals with countries outside of the EU,” as explained in the document The Process for Withdrawing from the European Union.

In the short term, the disparity in currency remains the most pressing concern. Great Britain’s sterling has weakened against other worldwide currencies, which makes exports from Britain less expensive. Meanwhile, stock markets in the US, the United Kingdom (UK), and the EU have been down this morning. Brexit has also caused political quandaries that may result in direct impacts to trade. The UK’s Prime Minister David Cameron, has resigned and will leave office by October. Furthermore, Scotland voted to remain in the EU, which could invoke another referendum for independence.

Deringer will continue to monitor trade implications resulting from Great Britain’s departure from the European Union. Please direct questions to marketing@anderinger.com.

On Saturday, June 25, 2016, Canada Post tabled offers for separate negotiations under way with the Canadian Union of Postal Workers (CUPW). With labor negotiations between Canada Post and CUPW ongoing since late 2015, the “cooling-off” period set to expire on July 2, 2016, and union members voting, overwhelmingly, to support a strike motion, a legal work disruption could occur as early as July 2.

In the event of a strike, Canada Post will not operate, mail and parcels will not be delivered, and no new items will be accepted. Any mail and parcels within the postal system during the strike would be secured and delivered once operations resume.

The main points of contention, between Canada Post and CUPW, are the implementation of a defined contribution retirement plan for new employees and the creation of new positions for evening and weekend deliveries, instead of regular workers taking overtime hours.

Negotiations Timeline

• November 20, 2015 – Canadian Union of Postal Workers officially served Canada Post with Notice to Bargain for both the urban operations unit and the RSMC unit. Talks began between both parties shortly after the official notice and have been ongoing since last year.
• December 31, 2015 – The collective agreement between Canada Post and CUPW-RSMC expired. The terms and conditions have continued to apply.
• January 31, 2016 – The collective agreement with CUPW-Urban expired. The terms and conditions have continued to apply.
• April 4, 2016 – Canada Post filed a request with the Federal Minister of Employment, Workforce Development and Labour to appoint conciliators to help stimulate constructive discussion at the separate bargaining tables. The process for requesting conciliation assistance is established by the Canada Labour Code.
• April 11, 2016 – The Federal Minister of Employment, Workforce Development and Labour appointed conciliation officers to help in separate negotiations with the CUPW.
• June 10, 2016 – The 60-day conciliation period officially ended, and a 21-day “cooling-off period” began.  Talks continued.
• July 1, 2016 – The “cooling-off” period is set to expire, which means a legal work disruption could occur as early as July 2, 2016. 

If you have any questions about the ongoing labor dispute, please send an email to Deringer’s Marketing Department. Deringer will continue to monitor and report on the situation.

Effective July 1, 2016, major steamship lines will implement a general rate increases (GRI) for transpacific cargo from the Far East and India to the US and Canada. In addition, a previously announced Peak Season Surcharge (PSS), scheduled for July 1, 2016, has been delayed until July 15, 2016.

Carriers’ surcharges may vary widely; average rates are as follows:

For Shipments to all US/Canadian destinations: 
20' Standard Containers: USD $480 -$540 
40' Standard Containers: USD $600
40' High-Cube Containers: USD $675
45' Standard Containers: USD $760
LCL: USD $12 per CBM, min USD $12 

Along with our overseas partners, Deringer will try to mitigate the upcoming rate increase. However, the market will ultimately determine carriers’ flexibility. Please send an email to Deringer's Marketing Department with any questions.

On June 28, 2016, U.S. Fish and Wildlife Service announced the implementation of an interim rule revising the civil procedures for the assessment of civil penalties when violations of laws or regulations have occurred.        

According to the notice, The Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 and the Office of Management and Budget (OMB) will adjust statutory civil monetary penalties, which may be assessed for violations of Service-administered statutes and their implementing regulations, for inflation every year after August 1, 2016.

The adjustments to the penalties for Lacey Act and the Endangered Species Act are as follows:

Endangered Species Act of 1973
16 U.S.C. 1540(a)(1)
Knowing violation of section 1538 - $49,467

16 U.S.C. 1540(a)(2)
Other knowing violation - $23,744

16 U.S.C. 1540(a)(3)
Any other violation - $1,250

Lacey Act Amendments of 1981
16 U.S.C. 3373(a)(1)
Violations - $25,000

16 U.S.C. 3373 (a)(2)
Violations - $625

The interim rule will become effective July 28, 2016. Comments on the rule should be submitted to the U.S. Fish and Wildlife Service – comments must be received or postmarked on or before August 29, 2016. Please send an email to Deringer’s Compliance Department with any questions.

On July 6, 2016, US Customs and Border Protection (CBP) released a Cargo Systems Messaging Service (CSMS) notice announcing that version 9.2 of the Automated Commercial Environment (ACE) Deployment and Development Schedule had been posted to CBP’s website under the “ACE and Automated Systems” page.

The main updates to the schedule are as follows:

• August 27, 2016 – Mandatory use of ACE for filing electronic Protests

• October 1, 2016 – Mandatory use of ACE for all remaining electronic portions of the CBP cargo process (including Duty Deferral, Drawback, Reconciliation, Collections and Liquidation)

• TBD 2016 – Mandatory use of ACE for electronic filing of remaining Partner Government Agency (PGA) data

The CSMS release can be viewed on CBP’s website. Please send an email to Deringer’s Compliance Department with any questions. 

On July 8, 2016, the West Coast Marine Terminals Operators Agreement (WCMTOA) announced a 1.9 percent increase in the Traffic Mitigation Fee (TMF) at the Ports of Los Angeles and Long Beach. The fee adjustment, scheduled to take effect on August 8, 2016, will enable PierPass OffPeak gates to remain fully operational amid labor cost increases.

Traffic Mitigation Fees as follows:

• $70.49 per TEU
• $140.98 per FEU

PierPass’s OffPeak program launched in 2005 to reduce severe cargo-related congestion on local streets and highways around both Los Angeles and Long Beach Ports; the program, which established regular night and Saturday work shifts, handles container pickups and deliveries at the 13 container terminals in LA-LB. To reduce congestion, PierPass charges a TMF on weekday/daytime cargo moves to incentivize cargo owners to use OffPeak shifts.

The TMF, and subsequent adjustments, fall under Rule 7 of the WCMTOA’s Marine Terminal Schedule No. 1, which states, “beginning in mid-2012, the fee shall be adjusted annually to reflect increases in labor costs based on Pacific Maritime Association (PMA) maritime labor cost figures.” The PMA negotiates and administers maritime contracts with the International Longshore and Warehouse Union (ILWU).

If you have any additional questions or concerns about the August 8th TMF increase, please send an email to Deringer’s Marketing Department.

Major steamship lines are proposing an August 1, 2016, general rate increase (GRI) for transpacific cargo from the Far East and India to the US and Canada. In the US/Canada, a previous GRI took effect as scheduled on July 1, 2016. In addition, a previously announced Peak Season Surcharge (PSS), originally scheduled for July 1, 2016, is expected to take effect July 15, 2016.

Carriers’ surcharges may vary; proposed rates are as follows:

Announced PSS Levels – July 15, 2016:
20' Standard Containers: USD $360
40' Standard Containers: USD $400
40' High-Cube Containers: USD $450
45' Standard Containers: USD $505
LCL: USD $8 per CBM, min USD $8

GRI for shipments to all US/Canadian destinations – August 1, 2016:
20' Standard Containers: USD $900 
40' Standard Containers: USD $1000
40' High-Cube Containers: USD $1125
45' Standard Containers: USD $1266
LCL: USD $20 per CBM, min USD $20 

Along with our overseas partners, Deringer will try to mitigate potential rate increases; however, the market will ultimately determine carriers’ flexibility. Please send an email to Deringer's Marketing Department with any questions.

The Softwood Lumber Agreement (SLA 2006) between the United States and Canada expired on October 12, 2015. The 2006 SLA was designed to regulate Canadian lumber exports to the US. Under the terms of the agreement, the US ended collection of anti-dumping (AD) and countervailing duties (CVD) on imported Canadian softwood lumber, and Canada imposed taxes and quantitative restrictions on softwood lumber exports to the US. “As part of the agreement, US producers agreed to a moratorium on the filing of AD/CVD petitions against softwood lumber from Canada until one year after the expiration of the SLA.” In accordance with the SLA provision, new AD/CVD cases could be filed by the US Lumber Coalition as early as October 12, 2016.

Please send an email to Deringer’s Compliance Department with any questions.

The St. Lawrence River water levels have decreased considerably throughout the first half of this year, with the latest forecast by the Canadian Coast Guard predicting further reductions. As a result, a low water surcharge (LWS) was implemented on July 15, 2016. The LWS is necessary as the current river level restricts the intake of vessels.

July 15th LWS, for all cargo moving via the port of Montreal, as follows:

• MSC: 100$/20’ and 150$/40’ (Note: MSC works with B/L date)
• MAERSK: 150$/20’ and 150$/40’ and 45’ (gate in)
• OOCL: 100$/20’ and 150$/40’ and 45’ (gate in)
• CMA: 150$/20’ and 175$/40’ (B/L date)

Deringer will continue to monitor and report on the St. Lawrence River water level. Please send an email to Deringer's Marketing Department with any questions.

According to China’s weather agency, typhoon Nida made landfall at 3:35 a.m. Tuesday at Dapeng Peninsula in the city of Shenzhen in south China’s Guangdong Province. The storm brought heavy rains, strong winds, and threats of flooding, which forced municipalities, transport services and businesses to close. The Guangdong region (Shenzhen, Guangzhou, Foshan, Shunde, Zhongshan, and Zhuhai) issued a brief red alert, its highest weather warning, in response to possible flooding.

According to China’s weather agency, rainfall totaled more than 7 inches (across the city) with a peak wind gust measured in excess of 90 mph.

Transportation services, throughout the region, began to resume activities on Tuesday afternoon. However, because of the city wide closures, some transportation services are experiencing delays.

Possible typhoon damage, and congestion within the transportation industry, may cause delays for shipments to or from China. Shippers should contact their Deringer representative to determine if their freight is impacted. Please send an email to Deringer's Marketing Department with any questions.

Major steamship lines are proposing a September 1, 2016, general rate increase (GRI) for transpacific cargo from the Far East and India to the US and Canada. In the United States, a previous GRI took effect as scheduled on August 1, 2016. Freight to Canada did not see an increase, in fact, most carriers observed declining freight levels.

Current freight levels for shipments to all destinations within the US (in response to the August 1st GRI) are expected to be higher in the interim; however, they are expected to level out within a few weeks.

Carriers’ surcharges may vary. Proposed rates are as follows:

GRI for shipments to all US/Canadian destinations – September 1, 2016:
20' Standard Containers: USD $900 
40' Standard Containers: USD $1000
40' High-Cube Containers: USD $1125
45' Standard Containers: USD $1266
LCL: USD $20 per CBM, min USD $20 

Along with our overseas partners, Deringer will try to mitigate potential rate increases; however, the market will ultimately determine carriers’ flexibility. Please send an email to Deringer's Marketing Department with any questions.

On September 1, 2016, Rule 15 of the West Coast MTO Agreement (WCMTOA) will become effective, establishing a Chassis Services Fee. The Chassis Services Fee of $5.00 will be levied upon each chassis that enters or leaves any Terminal Facility of a WCMTOA member at the Port of Los Angeles/Long Beach with either a loaded or empty container mounted on the chassis. Bare chassis (those not carrying a container) entering or leaving a Terminal Facility shall not be subject to the Chassis Services Fee.

For further information on the Chassis Services Fee, please read an August 1, 2016, press release from Paul Sherer (Sherer Communications LLC). For the MTO Schedule, which contains an explanation of Chassis Services Fee invoicing and payment, please visit the Pier Pass website.

Please send an email to Deringer's Marketing Department with any questions.

To combat the spread of mosquitoes, Zika virus and other infectious diseases, Chinese authorities, on March 2, 2016, instituted specific import rules for Chinese ports. The rules stated that “port authorities shall adopt effective anti-mosquito measures to eliminate mosquito breeding sites, reducing the mosquito density of the port." Additionally, inspection and quarantine authorities shall strengthen port health supervision to proactively address the spread of mosquitoes.

Per Chinese authorities on August 3, 2016, citing the World Health Organization (WHO), 55 countries and regions are experiencing Zika virus transmissions.

Africa (2): Cape Verde; Guinea-Bissau

Americas (43): Anguilla; Antigua and Barbuda; Argentina; Aruba; Barbados; Belize; Bolivia; The Netherlands Antilles (Bonaire); Brazil; Columbia; Republic of Costa Rica; Cuba; The Netherlands Antilles (Curacao); Dominica; Dominican Republic; Ecuador; Salvador; French Guiana; Grenada; Guadeloupe; The Republic of Guatemala; Guyana; Haiti; Honduras; Jamaica; Martinique; Mexico; Nicaragua; Panama; Paraguay; Peru; Puerto Rico; St. Barth; Saint Lucia; Saint Martin; Saint Vincent and the Grenadines; Sint Maarten (Netherlands Territory); Surinam; Trinidad and Tobago; Turks and Caicos Islands; The United States; United States Virgin Islands; Bolivarian Republic of Venezuela

Western Pacific (8): American Samoa; Fiji; Marshall Islands; The Federated States of Micronesia; Samoa; Tonga; The Philippines; Vietnam

Southeast Asia (2): Indonesia; Thailand

In addition to enhanced inspection and quarantine protocols, ports in China will be requiring a certificate of mosquito extermination for containers received from all countries with documented transmission of Zika virus – the certificate must contain:

• When and where the treatment was taken, the amount and the numbers of containers, the issuer, the exporter, the importer, cargo information as well as the effective ingredients, doses, instruction and duration of anti-mosquito agents.

For containers where no certificate is provided:

• Immediate mosquito eradication will need to be performed under the supervision of the inspection and quarantine authority, and strict quarantine and inspection measures on transportation vehicles, cargo, container, luggage and postal parcels are expected to be taken.

On August 10, 2016, the United States was placed on China’s list of countries which must take precautions to insure its shipments are mosquito-free. The situation is still developing and information on the cost to treat/fumigate has not been announced. Additionally, there exists the potential for exports to be delayed upon arrival at Chinese ports. Please send an email to Deringer's Marketing Department with any questions

The Blue Cut wildfire, which began around 10:30 a.m. PDT Tuesday, continued to burn steadily throughout Wednesday and firefighters expect it to continue intensely burning through the night on Thursday. Red-flag conditions remain in effect for San Bernardino County, until 9 p.m. Thursday, with gusty winds and low humidity continuing to spur the fire. At last report, Wednesday evening, firefighters were able to state four percent containment and reopen Interstate 15 northbound (as of Thrusday evening containment had reached 22 percent).

The wildfire continues to heavily impact the shipping industry; the southbound portion of Interstate 15, the main route between Las Vegas and Southern California, was indefinitely closed at noon on Tuesday, August 16 (Interstate 15 southbound reopened at 10:45 a.m. PDT on Thursday – traffic may flow through the pass, but not to exit). In addition, for much of Tuesday, the north-south railroad lines for Union Pacific Railroad and BNSF Railway through the Cajon Pass were shut down, delaying the distribution of cargo. Fire officials stated on Wednesday evening that some rail lines were able to resume activity – the reopened lines belong to BNSF. An additional line, belonging to Union Pacific, was reported to have sustained significant damage to a bridge and will remain closed.

For BNSF, track outages have impacted traffic to and from the Southern California On-Dock (SCOD), Los Angeles and San Bernardino facilities. Main Tracks 2 and 3 resumed services at 5:50 p.m. PDT on Wednesday, August 17, while Main Track 1 remains out of service indefinitely. Customers utilizing BNSF may experience delays of 36 to 48 hours on shipments moving through this corridor.

At the Ports of Los Angeles and Long Beach, the closure of Interstate 15 and impaired rail service have contributed to significant cargo congestion; within the ports terminals, container ships are being unloaded with nowhere for the cargo to go. Michael Gold, spokesman for the Port of Long Beach, stated that “for now, the congestion is manageable. [However,] it’s unclear when all of the rails lines through the region will be fully operational.”

Though firefighters are slowly making progress on California’s Blue Cut Fire, it continues to burn intensely. There are more than 1,000 firefighters from across California working to contain the blaze. Deringer will continue to monitor the situation in Southern California and report on impacts to shipping activity. Please send an email to Deringer’s Marketing Department with any questions.

Congestion at the Ports of Los Angeles and Long Beach has impeded the flow of containers throughout Los Angeles terminals. With the two key ports seeing a rise in volume over the past weeks, paired with the Blue Cut Wildfire, the disruptions have resulted in limited available working space and restrictions on the return of empty containers for both truckers and ocean carriers.

In addition to the difficulties returning containers, terminal congestion is affecting truckers’ ability to recover landed full containers – sometimes resulting in missed pickups as well.

Deringer will continue to monitor container congestion at Los Angeles terminals and will work with both ocean and truck carriers to mitigate detention and chassis fees accrued during this time. Please send an email to Deringer’s Marketing Department with any questions.

Over the past several months, importers have started to receive compliance letters from CBP’s Regulatory Audit Division. The letters remind importers of their obligation to exercise reasonable care in conducting their Customs business and identify a number of Informed Compliance Publications. CBP requests acknowledgment of receipt by a corporate officer, but we recommend our clients discuss with counsel whether to sign and return this acknowledgement.

These letters appear to be in response to changes brought about by the Trade Facilitation and Trade Enforcement Act of 2015, which included a mandate to CBP for improved enforcement. In a recent post, GDLSK, a top Customs law firm, provided their perspective and additional information regarding the CBP compliance letters. While opinions are divided over what actions Customs may take in light of these communications, we urge you not to ignore them and to review your compliance program for weaknesses. If you have yet to receive such a letter, this may be the appropriate time to review your compliance program if you have not done so recently.

Deringer Logistics Consulting Group stands ready to discuss your specific situation, answer your questions, or assist with a review of your current system culminating with a written report of our findings with suggestions for improvement where necessary. To speak with a highly qualified Customs Compliance expert at Deringer, please contact us via email at consulting@anderinger.com or call us at (518) 298-8281 (Champlain, NY) or (734) 641-6852 (Romulus, MI).

Over the last several days, various shipping lines have reported increased dwell times at the port of Vancouver, British Columbia. Current dwell times have been five to seven days, and the delays have resulted in demurrage for some shippers.

Deringer will continue to monitor the situation. If you experience longer than normal dwell times, please contact your Deringer customer service center so alternative options can be assessed.

On August, 22, 2016, DHS published the Interim Regulations and a solicitation for comments on procedures for CBP to investigate claims of evasion of antidumping and countervailing orders. Anyone wishing to comment on the Interim Regulations must do so by October 21st. Signed into law through the Trade Facilitation and Trade Enforcement Act (Enforce and Protect Act) or EAPA, this sets forth a formal process for CBP to investigate allegations of evasion. Antidumping (ADD) laws assess duty on imported products that are essentially sold at less than fair market value into the US and materially injure domestic industry. Countervailing (CVD) duties apply to imported products that benefit from a foreign government subsidy, thereby allowing foreign companies an advantage over domestic industry. Examples of evasion would include misrepresenting the true country of origin, or changing the description and tariff classification number in an effort to evade the extra dumping duties.

Under the EAPA, allegations of evasion may be filed with CBP from “interested parties” including importers, foreign producers, exporters or other federal agencies. Investigations under EAPA will be conducted by CBP’s Trade Remedy Law Enforcement Directorate. Equally interesting is if an importer/evader, foreign producer or exporter fails to comply to the best of their ability with a request for information, CBP may consider adverse inferences. Should evasion be found, CBP may suspend or extend the liquidation of entries along with taking action such as assessing penalties under 19 U.S.C 1592 or under any other relevant law.

If the determination is ultimately found to be negative, CBP will liquidate the entries as appropriate, and any evasion determinations are subject to administrative review by request of any party to the investigation.

This congressional action is not surprising following comments by the Government Accountability Office and the academic community that the US has lost billions in uncollected duties. Before importing or exporting products that you feel may fall within the ADD or CVD order, we suggest careful and close review of the Dept. of Commerce scope.

Deringer Logistics Consulting Group stands ready to answer your questions. To speak with a highly qualified Customs Compliance expert at Deringer, please contact us via email at consulting@anderinger.com or call us at (518) 298-8281 (Champlain, NY) or (734) 641-6852 (Romulus, MI).

The West Coast MTO Agreement (WCMTOA) announced on August 23, 2016, it has suspended plans to establish a Chassis Services Fee; the fee would have levied $5.00 upon each chassis that entered or left any Terminal Facility of a WCMTOA member at the Ports of Los Angeles and Long Beach with either a loaded or empty container mounted on the chassis.

Upon introduction of the Chassis Services Fee, leasing companies filed an August 9, 2016, Petition for an Order to Show Cause with the Federal Maritime Commission. In response to the petition, the FMC required interested parties to submit views and arguments relating to the chassis fee. Ultimately, in response to numerous complaints from chassis leasing companies, the WCMTOA decided to indefinitely suspend plans for the fee.

For further information on the cancellation of the Chassis Services Fee, please read an August 23, 2016, press release from PierPass. The release details WCMTOA’s decision to abandon the Chassis Services Fee, but also affirms their intention to seek compensation for services provided to chassis leasing companies at the Ports of Los Angeles and Long Beach.

Please send an email to Deringer's Marketing Department with any questions.

Major steamship lines are expected to implement a September 1, 2016 general rate increase (GRI) for transpacific cargo from the Far East and India to the US and Canada. The proposed GRI, if implemented, could be one of the largest on record this year. While freight levels for shipments to all destinations within the US are expected to be higher in the interim, GRI levels have fluctuated this year – rates at, or close to, published GRI levels have held for one to two weeks before leveling out.

Along with our overseas partners, Deringer will try to mitigate potential rate increases; however, the market will ultimately determine carriers’ flexibility. A previous alert, containing proposed rates can be found here. Please send an email to Deringer's Marketing Department with any questions.

Tropical Storm Hermine is expected to make landfall, as a Category 1 Hurricane, around the Florida Gulf Coast tonight. The storm is forecasted to bring heavy rain, high winds, storm surge flooding, and tornadoes; anything moving southeast via truck will likely experience weather related delays.

Storm watches and warnings have been issued along the southeastern seaboard – up to the Carolinas. The impact the storm will have is uncertain; however, rail carriers in Florida and Georgia anticipate delays and possible service suspensions.

Deringer will continue to monitor the situation and provide updates as conditions warrant. Please send an email to Deringer’s Marketing Department with any questions. 

Major steamship lines are proposing an October 1, 2016, general rate increase (GRI) for transpacific cargo from the Far East and India to the US and Canada. In the US/Canada, a previous GRI took effect as scheduled on September 1, 2016. In addition, a previously announced Peak Season Surcharge (PSS), postponed from August, is expected to take effect on September 15, 2016.

Current freight levels for shipments to all destinations within the US (in response to the September 1st GRI and Hanjin collapse) are expected to be higher in the interim; while rates have previously leveled out within a few weeks, some industry experts expect high rates/rate increases to continue for the remainder of 2016.

In addition to proposed GRI and PSS increases, new Bunker Adjustment Factor (BAF) levels for the 4th quarter of 2016, including Low Sulfur Fuel (LSF), will come into effect on October 1, 2016 – for transpacific cargo from the Far East/India to the US /Canada. West Coast shipments can expect a $35-$50 increase, over 3rd quarter levels, dependent on container size. For shipments to the East Coast, the expected increase over 3rd quarter levels is $65-$90 depending on container size.

Carriers’ surcharges may vary. Proposed rates are as follows:

Announced PSS Levels – September 15, 2016:
20' Standard Containers: USD $360 
40' Standard Containers: USD $400
40' High-Cube Containers: USD $450
45' Standard Containers: USD $510
LCL: USD $8 per CBM, min USD $8

GRI for shipments to all US/Canadian destinations – October 1, 2016:
20' Standard Containers: USD $1350 
40' Standard Containers: USD $1500
40' High-Cube Containers: USD $1690
45' Standard Containers: USD $1900
LCL: USD $30 per CBM, min USD $30 

Along with our overseas partners, Deringer will try to mitigate potential rate increases; however, the market will ultimately determine carriers’ flexibility. Please send an email to Deringer's Marketing Department with any questions.

Effective September 20th, 2016, the National Marine Fisheries Service (NMFS) will transition to US Customs and Border Protection’s Automated Commercial Environment (ACE) for its documentation programs. As a result of this implementation, the Highly Migratory Species International Trade Permit (HMS ITP) and Antarctic Marine Living Resources Dealer Permit (AMLR) will be replaced by a single permit: the NMFS’ International Fisheries Trade Permit (IFTP). The new consolidated permit will be required of imported products currently subject to Tuna Tracking and Verification Program (TTVP, Form 370) documentation. The consolidated permit allows the holder to conduct trade under any of the three NMFS programs: HMS ITP, AMLR, and TTVP.

Current HMS and AMLR permit holders may continue to use their permits until September 19th, and TTVP importers may continue importing without a permit until then. On September 20th, importers of HMS, AMLR, or TTVP products must have an IFTP when filing imports, exports, or re-exports with CBP. IFTPs will be valid for one year from the date of issuance, and must be held by the importer of record in the US. Prior to expiration, an email notice will be sent and permit holders will be required to renew their IFTP. Permits are available for $30 through the NMFS National Permit System (available online 24/7) and must be obtained prior to any shipments occurring after September 20, 2016. The permit number is a required data element for processing in ACE and is 13 numbers long preceded by a “P.”  

Most of the required documentation remains the same: commercial invoices, Form 370, copy of IFTP (or at least the permit number), and a copy of the International Commission for the Conservation of Atlantic Tunas (ICCAT). It is also helpful to include the scientific name of the fish and describe it as whole or otherwise. Additionally, ICCATs will be required for Blue Fin Tuna, Swordfish, frozen Big Eye Tuna, and shark fins. Form 370 will be required for all tuna and tuna products except fresh fish.

Frequently asked questions are available in the Compliance Guide for NMFS’ Implementation of International Trade Data System (ITDS). Additionally, the new regulations can be found in the Federal Register and trade program details are available on the National Oceanic and Atmospheric Administration website.

Major steamship lines are postponing a previously scheduled Peak Season Surcharge (PSS), from September 15, 2016, to October 1, 2016. In addition, a General Rate Increase (GRI) is scheduled to take effect on October 1, 2016.

Current freight levels for shipments to all destinations within the US (in response to the September 1st GRI and Hanjin collapse) are expected to be higher in the interim. While rates have previously leveled out within a few weeks, some industry experts expect high rates to continue for the remainder of 2016. Additionally, for USEC service, carrier space continues to be limited; for USWC service, due to extra loaders, market capacity has been increasing.

Carriers’ surcharges may vary. Proposed rates are as follows:

Announced PSS Levels – October 1, 2016:
20' Standard Containers: USD $360 
40' Standard Containers: USD $400
40' High-Cube Containers: USD $450
45' Standard Containers: USD $510
LCL: USD $8 per CBM, min USD $8

GRI for shipments to all US/Canadian destinations – October 1, 2016:
20' Standard Containers: USD $1350 
40' Standard Containers: USD $1500
40' High-Cube Containers: USD $1690
45' Standard Containers: USD $1900
LCL: USD $30 per CBM, min USD $30 

Along with our overseas partners, Deringer will try to mitigate potential rate increases; however, the market will ultimately determine carriers’ flexibility. Please send an email to Deringer's Marketing Department with any questions.

US Customs and Border Protection (CBP) announced on September 15, 2016, that an extensive construction project had started at the Port of Entry in Derby Line, VT. While there is no set completion date for the work, CBP advised that beginning Monday, September 19th, commercial operations will be reduced to one lane for several months.

CBP encourages travelers to check their border wait times dashboard or the “CBP Border Wait Times" apps for mobile devices before initiating cross-border travel, or consider using alternate CBP ports of entry; CBP’s alternate full-service commercial ports are in Highgate Springs, VT, and Norton, VT. Additionally, CBP has asked that both commercial and passenger vehicle operators exercise patience, as cross border delays are expected.

CBP’s official notice of construction is available here. Please send an email to Deringer's Marketing Department with any questions.

On September 19, 2016, a major fire broke out on Wan Hai 307, a 2,200 TEU containership. At present, the ship is stopped in the south-east of Cheung Chau, Lamma Island waters. The Marine Department has closed the channel to authorized vessels only while crews ensure the blaze is fully extinguished.

While no one was reported to be injured during the incident, firefighters are taking extra precautions as the containership was reported to be carrying hazardous goods.

Deringer will continue to monitor the situation. Please send an email to Deringer's Marketing Department with any questions.

On Thursday, September 8, 2016, US Customs announced a one month extension to begin mandatory filing in the new Automated Commercial Environment (ACE) of post-release documents for imported goods.

Resulting from the extension, Customs brokers can continue filing post-release documents in the legacy system until October 29, 2016; following the October date, liquidations, drawbacks, reconciliations, duty deferrals, collections, statements and automated surety interface forms will need to be filed in ACE.

The postponement of ACE for post-release functions was intended to give the industry more time to make a full transition to the new system.

The ACE system, in conjunction with the International Trade Data System (ITDS), was designed to facilitate legitimate trade while enhancing border security, which will improve consolidation, sharing, and processing of information submitted to CBP and other government agencies.

Additional information about ACE and materials in support of the October 29, 2016, transition are available on the US Customs and Border Protection website. Please send an email to Deringer's Compliance Department with any questions.

On January 5, 2015, President Obama issued a proclamation requiring all agencies to receive import data via the International Trade Data System (ITDS) by the end of 2016. The ITDS system is a clearinghouse of information allowing various Federal agencies oversight into the entry and release process via US Customs and Border Protection’s ACE system. Of the 47 agencies affected by the proclamation, the Environmental Protection Agency (EPA) plays a major role through the regulation of emissions controls, pesticides and the Toxic Substance Control Act (TSCA). In the past, importers have fulfilled EPA TSCA requirements by submission of a statement on the shipping documents or via a blanket TSCA statement. It will soon become mandatory for imports to submit TSCA data in an electronic format via ACE/ITDS. There are several new elements which will be required by your Customs broker to fulfill the data transmission requirements at time of entry into the United States. They are as follows:

• Commercial Description (e.g. – aluminum chloride)
• TSCA Declaration (positive or negative)
• Name of Qualifying Individual (authorized party who signed the TSCA statement)
• Telephone Number & E-mail Address of Certifying Individual

This information can be provided to the broker through a “traditional” TSCA statement (example attached) on a transaction by transaction basis. While CBP has officially discontinued the blanket TSCA statement, Deringer is happy to provide our clients with our own annual certificate program. Please feel free to discuss this with your local contact or the Deringer Compliance Department.

Additional information regarding the Toxic Substance Control Act, including a link to the EPA’s TSCA Inventory, can be found at https://www.epa.gov/chemical-data-under-toxic-substance-control-act-tsca. We encourage you to review this information and forward any questions regarding the clearance of goods subject to the TSCA to the Deringer Compliance Team at compliance@anderinger.com or call (518) 298-8281.

Under the Bioterrorism Act of 2002 and the Food Safety Modernization Act of 2011, facilities which engage in the manufacturing, processing, packing or holding of food which is to be consumed in the United States, must register with the Food and Drug Administration (FDA). In addition, these facilities are required to reaffirm the information submitted by renewing their registration during the fourth quarter of every even numbered year. Facilities subject to these requirements must submit their renewal information this year between October 1st - December 31st. Failure to fulfill this requirement may result in the suspension or cancellation of a facilities registration number.

The FDA’s registration and renewal page may be accessed by clicking on the link below.

http://www.fda.gov/Food/GuidanceRegulation/FoodFacilityRegistration/default.htm.

In addition to registration, foreign based facilities must select a US agent to act on their behalf. The “agent” assumes responsibility for communication between the FDA and the foreign facility in the event of a food related emergency. Deringer is proud to offer this service as well as assistance with facility registration and other food related matters. Please feel free to contact Deringer's Compliance Department at (518) 298-8281 or e-mail fda@anderinger.com.

Major steamship lines have postponed the scheduled October 1, 2016, General Rate Increase (GRI), and instead will try to implement on October 15th. Early indications are that the October 15th rate increase will be minimal, and there is a good possibility that the GRI is cancelled altogether. In addition, a Peak Season Surcharge (PSS) scheduled for October 1, 2016, has been indefinitely postponed.

With the PSS postponed and GRI expected to be minimal, it is unlikely that we will see a significant rate increase between now and the end of October. However, due to carrier over-booking and business closures in advance of China’s National Day Holiday, celebrated on October 1, 2016, cargo delays are expected. Additionally, lingering effects from the Hanjin collapse can still be felt as carrier space continues to be limited for USEC and USWC service.

Carriers’ surcharges may vary. Projected rates are as follows:

GRI for shipments to all US/Canadian destinations – October 15, 2016:
20' Standard Containers: USD $200 
40' Standard Containers: USD $400
40' High-Cube Containers: USD $400
45' Standard Containers: USD $500
LCL: USD $5 per CBM 

Along with our overseas partners, Deringer will try to mitigate potential rate increases; however, the market will ultimately determine carriers’ flexibility. Please send an email to Deringer's Marketing Department with any questions.

Customs announced Wednesday that the planned deployment of additional ACE capabilities, scheduled for implementation on October 29, 2016, has been delayed. CBP stated that they continue to…

“…assess stakeholder readiness for the mandatory transition of post-release capabilities in ACE.  In order to allow additional time for all stakeholders to prepare for this transition and to provide the opportunity to solicit and receive public comment…This transition includes the mandatory use of ACE for liquidation, drawback, reconciliation, duty deferral, collections, statements, and the Automated Surety Interface. CBP is targeting January 2017 for the revised deployment and mandatory date and will provide additional clarification regarding the precise transition date in the coming weeks.”

CBP is encouraging all stakeholders to use the additional time for testing of new software capabilities in their ACE Certification (CERT) environment and transitioning to the electronic PGA environment in the International Trade Data System (ITDS).

For questions, or to further discuss the latest ACE delay, please call (518) 298-8281 or send an email to Deringer's Compliance Department. More information about the ACE Mandatory Use Dates can be found on the US Customs and Border Protection website.

Following an inter-ministerial meeting, workers at the Port of Chittagong called off an October 4, 2016, strike; while no resolution was met, Prime Mover-Trailer Owners and the Workers’ Unity Council agreed to postpone the strike until October 13, 2016, allowing both sides a short window to ratify terms of an agreement.

The strike action stems from an August ruling that levied an upper limit on the maximum permissible load that a container carrying vehicle could tow. In response to the ruling, the Worker’s Unity Council called for a strike alleging that they have continuously been harassed and fined without reason at load control centers at Daudkandi and Meghna Bridge areas on the Dhaka-Chittagong highways.

Deringer will continue to monitor the situation and will advise of any further developments. Please send an email to Deringer’s Marketing Department with any questions.

Introduced more than 12 years ago, the Canadian Border Services Agency’s (CBSA) Advance Commercial Information (ACI) program ushered in a more efficient risk management process to help identify threats prior to the arrival of cargo and conveyances in Canada. Phases I and II of ACI applied to marine and air modes of transportation. The third phase of the ACI program, eManifest, impacts shipments traveling by ground (rail and highway) and ensures that electronic pre-arrival shipment information is sent and risk assessed prior to arrival in Canada. Pre-arrival risk assessment provides benefits to the trade industry including:

• Facilitated movement of legitimate trade across the border.
• Notification on the receipt of complete data sent to the CBSA by various trade parties.
• Notification on the arrival and status of shipments as they move through the commercial import process.
• Strengthening sharing of information with other trade partners who are registered CBSA clients.

Regulatory amendments supporting ACI/eManifest were originally published on May 6, 2015, in the Canada Gazette, Part II. The CBSA granted Canadian businesses and trade partners a six month grace period, from July 10, 2015 to January 10, 2016, where those identified for non-compliance with ACI requirements were issued zero-rated Administrative Monetary Penalty System (AMPS) penalties.

On January 11, 2016, the CBSA began enforcing the monetary penalty phase of the AMPS for highway carriers who did not comply with ACI pre-arrival cargo and conveyance data requirements.

Penalties for ACI contraventions range from $250 to $8,000. The CBSA recognized the potential impact to clients and therefore mitigated penalty levels to just Level 1 regardless of repeated non-compliance. This was done in an effort to provide additional time for carriers to make appropriate changes to their processes and training requirements. As this approach has been in effect for over eight months, the CBSA is now moving forward with graduated ACI penalties – found here.

Deringer and the CBSA remain committed to supporting clients in their transition to eManifest through online resources and dedicated client support activities. Visit the CBSA website regularly and subscribe to the eManifest Web feed to be notified of important eManifest updates. For the most up-to-date information about Canadian eManifest, please visit the eManifest section of the CBSA website. For additional questions, please send an email to Deringer's Compliance Department.

Many of our customers have reported receiving “Informed Compliance Letters” from US Customs and Border Protection’s Regulatory Audit department. While the letters vary, the theme is the same, CBP is advising that the recipient review the company's compliance programs, conduct internal reviews, and consider filing a prior disclosure if violations are discovered.

Deringer recommends that our clients take any communication from CBP, especially CBP’s Regulatory Audit group, very seriously. While the Informed Compliance Letter is not a guarantee that you are a target for some type of further action by CBP, it’s a good bet, and thus an incentive to check your internal compliance.

CBP uses four types of audit processes:

•    Focused Assessment Audits
•    Referral Audits and Other Professional Services (formerly Quick Response Audits)
•    User Fee Audit
•    Importer Self-Assessment Evaluations

We have learned that CBP has recently begun using another type of review that is called the Survey. The Survey consists of three parts:

•    Informed Compliance Letter
•    Questionnaire
•    Walkthrough

It is possible that the recipient of the Informed Compliance Letter may be targeted for the Survey process. At this point, we do not have a copy of the Questionnaire sent to Importers, but we expect it will cover areas about the importer’s internal controls.

Below is a chart showing the differences and similarities of the various audit processes used by CBP.

* Value and classification are usually reviewed for accuracy but may not be the primary focus of the audit.

It is always a good idea to do an internal compliance review and ensure your processes are documented. Deringer is proud to offer assistance with this process. Please feel free to contact Deringer's Compliance Department at (518) 298-8281 or e-mail compliance@anderinger.com.

Major steamship lines have implemented an October 15, 2016, General Rate Increase (GRI) for transpacific cargo from the Far East and India to the US and Canada. While early indications pointed towards a significant increase, Deringer has observed rates fluctuating between $200 - $500 depending on container size and carriers' surcharges.

Observed rates are as follows:

GRI for shipments to all US/Canadian destinations – October 15, 2016:
20' Standard Containers: USD $200 
40' Standard Containers: USD $400
40' High-Cube Containers: USD $400
45' Standard Containers: USD $500
LCL: USD $5 per CBM 

Deringer will continue to monitor and report on carriers' surcharges and upcoming rate increases. Please send an email to Deringer's Marketing Department with any questions.

On October 28, 2016, the World Customs Organization released the 2017 edition of the Harmonized System Nomenclature (HS), the world’s global standard for classifying goods in international trade; the 2017 edition will enter into use on January 1, 2017.

Used by over 200 countries, international organizations, and economic or Customs unions, the 2017 HS Nomenclature includes 242 sets of amendments – including some complementary amendments:

• 85 in the agricultural sector
• 45 in the chemical sector
• 22 in the wood sector
• 15 in the textile sector
• 6 in the base metal sector
• 25 in the machinery sector
• 18 in the transport sector
• 26 to various sectors

The 2017 edition of the Harmonized System comprises a total of 5,387 separate groups of goods identified by a 6-digit code (compared to 5,205 in the 2012 edition).

For more information about the HS Nomenclature, please see the included article from International Trade Today – here. For questions, or to further discuss the 2017 edition of the HS Nomenclature, please call (518) 298-8281 or send an email to Deringer's Compliance Department.

On October 31, 2016, three Japanese steamship lines elected to merge their container businesses, which would create Asia’s second-largest box carrier and the world’s sixth-largest one overall. The merger, between Nippon Yusen KK (NYK), Mitsui O.S.K. Lines Ltd. (MOL) and Kawasaki Kisen Kaisha Ltd. (K-Line), would establish a completely new joint-venture company to integrate and consolidate the container shipping businesses of all three companies. The combination still needs to be approved by regulators in the European Union, US, China and Japan among others. 

Jeremy Nixon, NYK’s Global Liner Management Division CEO, states in a letter “[that] the container shipping industry has faced over the last five years unprecedented financial challenges. Global trade growth has slowed and the industry has witnessed a significant over supply of new tonnage. These two factors have contributed to create an adverse supply and demand imbalance environment, which has significantly undermined long term industry financial stability and future investment sustainability. In order to combat these factors, industry participants have sought to gain scale merit consolidation through integration and acquisition activity. Under such similar circumstances, NYK, MOL, and K-Line have now decided to integrate all their container shipping and terminal operating businesses excluding Japan, into one new single entity.”

Looking forward pending regulatory approval, the new joint-venture company will be established on July 1, 2017 with business commencement expected on April 1, 2018. In the meantime, all three steamship lines will continue with standard operations.

Deringer will continue to monitor the merger and provide updates should there be any key developments. Please send an email to Deringer's Marketing Department with any questions.

In accordance with Customs and Border Protection’s (CBP) requirement that importers maintain all records pertaining to an importation for a period of 5 years from the date of importation, Deringer encourages all of our customers to use the end of the year as a time to review their internal compliance procedures.

Records pertaining to an import include, but are not limited to, commercial invoices, packing lists, bills of lading, and any other documentation that is required or used to create the entry and entry summary, the ACE transmission to CBP. While CBP rarely asks for copies of these documents at the time of importation, the importer is required to maintain these records and produce them upon request.  For questions about exactly what documents are of concern to CBP, review the included link (19 CFR Part 163), referred to as the “(a)(1)(A) list,” or a list of potential documents required to support an importation. Further recordkeeping guidance can be found in CBP’s Informed Compliance Publication.

With the advent of ACE, CBP has adjusted its policy as it pertains to the paper Customs Form 7501 (referred to as entry summary) and the Customs Form 3461 (referred to as the release document). Full paperless transactions are an important part of the new ACE process. This means that for ACE cargo release and ACE entry summary filing, there is no need to generate a CBP Form 3461/7501 nor is one required to be presented. 

Because these forms no longer exist based on an electronic transmission via ACE, CBP has issued recordkeeping guidelines to assist the importer in complying with recordkeeping requirements as it pertains to these obsolete forms when transmitting entry/entry summary data via ACE. This link contains a copy of CBP’s policy “recordkeeping in ACE” as it relates to the old paper forms which are now completely electronic.

Deringer encourages all our clients to consider applying for an ACE portal account as a means to partner with us in your compliance, and to ensure you have access to certain electronic records to reproduce the entry/entry summary data using an ACE report. Deringer also offers various methods for you to obtain documentation we used to create your entry summary. For example, you can elect to have your documents pushed to you via FTP, or you can log onto our system and pull down the documents you require for a specific transaction.

Deringer is proud to serve as your Customs Broker, and, as such, we want to be your partner in compliance. To learn more about these tools, or to further discuss recordkeeping in ACE, please call (518) 298-8281 or send an email to Deringer's Compliance Department.

On November 10, 2016, the United States Food and Drug Administration (FDA) released an industry Guidance regarding the FDA’s Voluntary Qualified Importer Program (VQIP). The program, created under guidance from the Food Safety Modernization Act (FSMA), is a fee-based trusted trade program for the expedited review and importation of both human and/or animal food products. Participation in the VQIP program is limited to importers who have at least 3 years’ experience importing food into the US, possess a Dun and Bradstreet (DUNS) number, are in good standing with the FDA, and maintain a certified facility.

Those accepted in VQIP will be eligible for the benefits listed below:

• The FDA will expedite entry into the US for all foods included in an approved VQIP application.
• The FDA will limit examinations and/or sampling of VQIP food entries.
• In the event that FDA samples VQIP food, the FDA will expedite laboratory analysis.
• The FDA will establish a VQIP Importers Help Desk dedicated to responding to questions and concerns from VQIP importers.

Applications for the FDA’s VQIP program may be submitted from January 1st – May 31st each year for the fiscal year beginning in 2018; participation will be limited to 200 importers for the first year of the pilot. Interested importers can visit the FDA Industry Systems website to establish an online account. In addition, VQIP participation must be renewed annually and participating importers must pay a fee to cover FDA’s costs of administering the program. In the Federal Register of June, 5 2015 (80 FR 32136), FDA estimated that a flat annual fee of approximately $16,400 would be paid by all VQIP participants. The FDA has yet to finalize the fee for applications in January 2018, but will publish the fee amount in the Federal Register on or before August 1, 2017, and each year thereafter.

Full VQIP Guidance, including eligibility criteria, can be accessed on the FDA’s website. To further discuss the VQIP program, please call (518) 298-8281 or send an email to Deringer's Compliance Department.

Effective November 15, 2016, exporters will be required to begin using the new unified Destination Control Statement (DCS) on their commercial invoice for tangible items controlled under the Export Administration Regulations (EAR) or the International Traffic in Arms Regulations (ITAR). The statement reads as follows:

“These items are controlled by the U.S. government and authorized for export only to the country of ultimate destination for use by the ultimate consignee or end-user(s) herein identified. They may not be resold, transferred, or otherwise disposed of, to any other country or to any person other than the authorized ultimate consignee or end-user(s), either in their original form or after being incorporated into other items, without first obtaining approval from the U.S. government or as otherwise authorized by U.S. law and regulations.”

The statement is not required for items on the Commerce Control List (CCL) that are classified as EAR99. Additionally, the final rule removes the requirement for placing the DCS on transportation documents including the bill of lading, air waybill, or other shipping documents.

The above changes were announced by the State Department’s Directorate of Defense Trade Controls (DDTC) and the Commerce Department’s Bureau of Industry & Security (BIS) in the Federal Register on August 17, 2016 (81 FR 54732 and 81 FR 54721, respectively). To further discuss the changes to export regulations, please call (518) 298-8281 or send an email to Deringer's Compliance Department.

On Friday, November 25, 2016, the US Lumber Coalition filed a petition for relief from Canadian subsidies on exports of softwood lumber to the United States. The industry group alleges that Canadian provincial governments, which own the vast bulk of Canada’s timber, provide access to loggers at a rate well below industry value. This gives the Canadian timber industry an unfair financial advantage allowing for the export of products at artificially low values. 

The decades old disagreement between the two trading partners had been addressed by the 2006 Softwood Lumber Agreement (SLA), which expired in October of 2015. After a one year “cooling off period” the US lumber industry has again taken up the torch and will proceed to address their claims of material injury to US lumber manufacturing. Should the Department of Commerce find merit to the claim, antidumping and countervailing duties (ADD/CVD) could be imposed as soon as early spring.

The Coalition claims that since the expiration of the SLA, imports of cheap Canadian softwood lumber have increased by over 30%. This could lead the Department of Commerce to declare “critical circumstances,” allowing the ADD/CVD cases to be implemented retroactively (90 days) once the preliminary determination of injury has been made. 

More information in regards to this case is available on the US Lumber Coalition’s website. For additional questions, please send an email to Deringer's Compliance Department or call (518) 298-8281.

Major steamship lines have postponed the scheduled December 1, 2016, General Rate Increase (GRI), and instead will look to implement the rate change on December 15th. Early indications are that the December 15th rate increase would be minimal, with rates fluctuating between $200 - $500 depending on container size and carriers’ surcharges.

Observed rates are as follows:

GRI for shipments to all US/Canadian destinations – December 15, 2016:
20' Standard Containers: USD $200 
40' Standard Containers: USD $400
40' High-Cube Containers: USD $400
45' Standard Containers: USD $500
LCL: USD $5 per CBM 

Deringer will continue to monitor and report on carriers' surcharges and upcoming rate increases. Please send an email to Deringer's Marketing Department with any questions.

Under the Bioterrorism Act of 2002 and the Food Safety Modernization Act of 2011, facilities which engage in the manufacturing, processing, packing or holding of food which is to be consumed in the United States, must register with the Food and Drug Administration (FDA). In addition, these facilities are required to reaffirm the information submitted by renewing their registration during the fourth quarter of every even numbered year. Facilities subject to these requirements must submit their renewal information this year between October 1st - December 31st. Beginning on January 1, 2017, if a foreign food facility is required to register with FDA, but fails to do so, food from that facility that is being imported or offered for import into the US is subject to be held under Section 801(l) of the Federal Food, Drug, and Cosmetics Act. In addition, failure to fulfill this requirement may result in the suspension or cancellation of a facilities registration number.

The FDA’s registration and renewal page may be accessed by clicking on the link below.

http://www.fda.gov/Food/GuidanceRegulation/FoodFacilityRegistration/default.htm.

In addition to registration, foreign based facilities must select a US agent to act on their behalf. The “agent” assumes responsibility for communication between the FDA and the foreign facility in the event of a food related emergency. Deringer is proud to offer this service as well as assistance with facility registration and other food related matters. Please feel free to contact Deringer's Compliance Department at (518) 298-8281 or e-mail fda@anderinger.com.

The National Retail Federation, the National Industrial Transportation League, and others have filed a petition for rulemaking asking the Federal Maritime Commission (FMC) to clarify their position on detention and demurrage. The US shippers, truckers, and transportation intermediaries are requesting that the FMC consider policy that would prevent marine terminals and container lines from charging demurrage and detention fees when uncontrollable incidents prevent cargo from being picked up from ports on time.

In a petition filed with the FMC, the Coalition for Fair Port Practices stated that “recent events involving port congestion, labor strife, an ocean carrier bankruptcy, inclement weather and other disruption events have had crippling effects on US ports and the stakeholders who rely on the efficient movement of goods.” Cargo owners and trucking companies normally have a small window during which they can pick up containers free of charge. After that, they can be assessed a demurrage charge; a fee intended to ensure that containers are removed promptly. In addition, detention and per diem fees can be charged if cargo containers and chassis are not returned within a specified timeframe.

The fees are designed to discourage the use of terminals for long-term storage and to improve equipment utilization. However, ongoing congestion at US ports, paired with the bankruptcy of South Korea’s Hanjin Shipping, has led to a surge in disputes over demurrage and per-diem detention charges. In some circumstances, cargo owners and trucking companies have been hit with additional fees in excess of $1 million.

Members of the coalition filing the petition are asking FMC to adopt policies that would extend free days during times of port congestion, weather-related events, and other situations that are beyond the control of the parties picking up or returning containers and chassis. In addition, demurrage, detention, and per diem charges would be reevaluated on a situational basis.

Deringer will continue to monitor the situation and provide an update should the FMC make an official statement. For questions, or to further discuss the FMC petition, please contact Deringer’s Marketing Department.

On December 12, 2016, US Customs and Border Protection (CBP) announced a final rule allowing for electronic liquidation notices. The rule, which will become effective on January 14, 2017, enables CBP to post "official notices of liquidation, suspension of liquidation, and extension of liquidation" to the CBP website.

For most importers (and their sureties), this rule will change the way in which they can access official notices of liquidation, reliquidation, extension, and suspension. Instead of posting weekly official bulletin notices of liquidation and reliquidation at each US customhouse and station and mailing official notices of extension and suspension, CBP will publish notices on the CBP website once this rule is in effect. CBP will also discontinue mailing all paper courtesy notices of liquidation and reliquidation with this rule. Because the vast majority of importers (and their sureties) rely on the electronic courtesy notices of liquidation, reliquidation, extension, and suspension currently provided, CBP estimates this rule’s transition to electronic official notice publications will only affect a small portion of importers.

As the final rule does affect current 19 CFR regulations, there will be amendments made to the following CBP regulations: 19 CFR Part 159 (Antidumping, Countervailing duties, Customs duties and inspection, Foreign currencies) and 19 CFR Part 173 (Administrative practice and procedure, Customs duties and inspection).

The text of the final rule can be found on the Federal Register’s Website. For questions, or to further discuss the rule, please contact Deringer’s Compliance Department at (518) 298-8281.

After Monday’s devastating Cyclone Vardah passed through the eastern seaboard of India, severely damaging the port city of Chennai, disrupting electrical and mobile networks, and causing damage to the city’s transport systems –­ especially rail infrastructure, workers at the Port of Chennai are doing everything they can to resume operations at India’s busiest east coast container gateway.

While the port proactively pulled all berthed vessels outside view for safety reasons, “there has been no official statement from the port or state authorities on the extent of damage to cargo handling facilities and other infrastructure (JOC).” As the city works to return to normalcy, the Chennai & Kattupalli Port terminals along with CFS facilities continue to assess damage inflicted by the cyclone.

Deringer will continue to monitor the situation and provide updates as conditions warrant. Please send an email to Deringer’s Marketing Department with any questions. 

Effective January 26, 2017, US Customs and Border Protection establishes an option for importers to electronically file the Environmental Protection Agency’s Toxic Substances Control Act (TSCA) certification. The final rule amends the current regulations by providing electronic means for filing TSCA, eliminating the paper-based TSCA blanket certificates currently permitted, and clarifying certain definitions.

TSCA certifications are required for the importation of chemical substances imported in bulk or as part of a mixture, as well as for non-TSCA chemicals. Importers or their Customs brokers must state in the signed certification that either (1) all chemical substances comply with applicable rules under TSCA and the chemical substances do not violate any TSCA rule or (2) all chemicals are not subject to TSCA.

The final rule:

• allows for the electronic method to file TSCA certifications and notices of exportation and abandonment;
• requires additional information regarding the certifying individual (e.g., name, phone number and email address);
• eliminates the blanket certifications option;
• includes language clarifying the regulation’s applicability to importations of chemicals regardless of whether they are subject to TSCA.

The complete text of the final rule is available online in the Federal Register. Deringer’s Compliance Department can also provide further clarification.

Major steamship lines have implemented a January 1, 2017, General Rate Increase (GRI) for transpacific cargo from the Far East and India to the US and Canada. Early indications pointed towards a significant increase; Deringer has observed rates fluctuating at, or close to, the announced levels depending on container size and carriers' surcharges. A subsequent GRI increase is scheduled to be implemented on January 15, 2017. Deringer will continue tracking the status of that increase in the coming weeks.

Rate increase as follows:

GRI for shipments to all US/Canadian destinations – January 1, 2017:
20' Standard Containers: USD $800
40' Standard Containers: USD $1000
40' High-Cube Containers: USD $1125
45' Standard Containers: USD $1265
LCL: USD $22 per CBM 

Deringer will continue to report on carriers' surcharges and upcoming rate increases, and will work to mitigate fees whenever possible. Please send an email to Deringer's Marketing Department with any questions.

Adverse weather conditions, specifically dense fog, has resulted in transit delays for all train services to and from the ports of Mundra, Pipavav, and Nhava Sheva – resulting in delays at their respective Inland Container Depots (ICDs).

In addition to the transit delays, shortage of power in the Northern port region has severely impacted the situation. Trains in the area have been experiencing a 1-2 day wait because of power shortages at ICDs. Transit time to and from Mundra, Pipavav, and Nhava Sheva has increased by 2-3 days, resulting in congestion and scheduling problems.

Deringer will continue to monitor and report on the India port delays. Please send an email to Deringer's Marketing Department with any questions.

With Chinese New Year approaching, space will become limited – especially for USEC service. Bookings for Asian cargo shipments to North America should be made at least 12 days in advance of sailing to avoid capacity problems.

Government bodies and logistics companies in China will observe the holiday between January 27 and February 2, 2017, and those in Hong Kong will observe it between January 28 and January 31, 2017. Additionally, many factories and businesses remain closed for an additional week following those dates.

For questions about bookings or space availability, please contact your local Deringer representative or send an email to Deringer's Marketing Department with any questions.

On January 6, 2017, the United States International Trade Commission (USITC) voted in favor of continuing investigations on softwood lumber products from Canada. The commission determined “that there is a reasonable indication that a U.S. industry is materially injured by reason of imports of softwood lumber products from Canada that are allegedly subsidized and sold in the United States at less than fair value.”

A news release from USITC, with access to the softwood lumber report, can be accessed on the US International Trade Commission’s website – here.

Please send an email to Deringer's Compliance Department or call (518) 298-8281 with any questions.

On a January 11, 2017, United States Customs and Border Protection (CBP) announced, in a CSMS message, that “the January 14, 2017, deployment of post release capabilities including liquidation (with the exception of the electronic posting of the Notices of Liquidation on CBP.gov), drawback, reconciliation, duty deferral, collections, statements and the Automated Surety Interface [would] be postponed.” Electronic posting of Notices of Liquidation are still scheduled to take effect on January 14, 2017.

In the notice, CBP identifies “stakeholder feedback” and the “complexity of the ongoing integration” as two factors that contributed to the postponement. In addition, “CBP is providing additional time to prepare for the final core ACE deployment and ensure a smooth transition.”

CBP will update the deployment schedule and provide further information at a later time. Please send an email to Deringer's Compliance Department or call (518) 298-8281 with any questions.

On January 12, 2017, the U.S. Fish & Wildlife Service (FWS) announced the suspension of its Automated Commercial Environment/International Trade Data System (ACE/ITDS) pilot program.  Under the pilot program the agency had flagged thousands of tariff numbers with the PGA code FW2, which required submission of data on many articles that had not been previously collected; even in cases where the goods were not subject to FWS regulation and could be “disclaimed,” the agency required the submission of a limited data set, including the name and address of the responsible party. 

During the interim period, the FWS will shift all tariffs flagged as FW2 to an FW1, with the exception of certain tariff numbers which require mandatory processing via the FWS extended data set (EDS) system.  Tariff numbers flagged with an FW1 will allow a disclaimer flag to be filed in cases where it is appropriate, rather than submission of the limited data set previously required. 

The FWS will continue to work with the Commercial Customs Operations Advisory Committee (COAC) FWS working group to explore alternative methods to collect data to ensure that goods are being properly declared. Please send an email to Deringer's Compliance Department or call (518) 298-8281 with any questions.

On February 8, 2017, US Customs and Border Protection (CBP) announced that commercial vehicle entrances at the Derby Line Port of Entry (Interstate 91), Vermont, would be modified for several months to accommodate construction of “new passenger and commercial vehicle lanes.”

• Beginning on Monday, February 13, 2017, commercial truck traffic will be routed through the eastern portion of the port complex. This lane is behind the main port building and commercial operators are asked to enter the port on the left side.

• Commercial trucks must not cross to the left lane of Auto Route 55 until after the Route 247 intersection. Trucks should do so safely and ensure the intersection is cleared. An emergency turnaround north of the Caswell Avenue overpass should not be blocked for any reason.

• Commercial bus operators will enter the port as normal, but are advised that they will be sharing this lane with commercial trucks.

• The estimated completion of this phase of construction and traffic pattern shift is May 30, 2017.

• Commercial truck and bus operators should be aware that delays can be expected during peak volume times. Due to construction activity there will be limited parking space for commercial trucks requiring additional processing and inspection at the I-91 facility.

CBP encourages travelers to check their border wait times dashboard or the “CBP Border Wait Times” apps for mobile devices before initiating cross-border travel, or consider using alternate CBP ports of entry; CBP’s alternate full-service commercial ports are in Highgate Springs, VT, and Norton, VT.

Additionally, “CBP operates permit ports of entry in North Troy, VT, Canaan, VT, Beecher Falls, VT and Pittsburgh, NH in the Derby Line area. In the Highgate Springs area the ports of Alburg, Alburg Springs, Morses Line, West Berkshire and Richford offer permit opportunities.”

CBP has asked that both commercial and passenger vehicle operators exercise patience, as cross border delays are expected. Please send an email to Deringer’s Marketing Department with any questions.

On February 8, 2017, US Customs and Border Protection (CBP) posted updated ACE Documentation on their website for both Partnering Government Agencies (PGA) Import Forms and PGA Export Forms. These documents outline how information required by specific PGA paper forms can be electronically submitted through ACE via the PGA Message set or the Document Image System (DIS) and can be found on the CBP website – here.

CBP has also updated their ACE PGA Filing Status chart and point of contact for the various PGAs. This form is also available on the CBP website.

While many of the PGAs have opened and closed pilot and electronic filing procedures that are already effective, there are still upcoming changes to be implemented for export. The PGAs are as follows:

• Agricultural Marketing Service (AMS)
• Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF)
• Bureau of Industry & Security (BIS)
• Directorate of Defense Trade Controls (DDTC)
• Drug Enforcement Agency (DEA)
• Environmental Protection Agency (EPA)
• Fish and Wildlife Services (FWS)
• National Marine Fisheries Service (NMFS)
• Office of Foreign Assets Control (OFAC)
• Alcohol and Tobacco Tax and Trade Bureau (TTB)

Deringer encourages exporters to start preparing now for the new electronic Message Sets that will be required by each of the PGAs. To prepare for the upcoming system changes this may require, you can refer to the AESTIR Appendix Q (PGA Record Formats) and Appendix X (HTS Codes for PGAs). These can be found on CBP’s website – here.

Please send an email to Deringer's Compliance Department or call (518) 298-8281 with any questions.

On February 14, 2017, US Customs and Border Protection (CBP) announced that the Food and Drug Administration (FDA) has, in accordance with the FDA Food Safety Modernization Act (FSMA), invalidated food facility registrations that were not renewed during the 2016 registration cycle.

According to the Cargo Systems Messaging Service (CSMS) notice, “Registrations that have been invalidated cannot be renewed and a new registration will have to be created.” Individual registration status may be viewed by logging into a FURLS Food Facility Registration Module account.

Under the Bioterrorism Act of 2002 and the FSMA, facilities which engage in the manufacturing, processing, packing or holding of food which is to be consumed in the United States, must register with the FDA. In addition, these facilities are required to reaffirm the information submitted by renewing their registration during the fourth quarter of every even numbered year. Beginning on January 1, 2017, if a foreign food facility is required to register with FDA, but fails to do so, food from that facility that is being imported or offered for import into the US is subject to be held under Section 801(l) of the Federal Food, Drug, and Cosmetics Act. In addition, failure to fulfill this requirement may result in the suspension or cancellation of a facilities registration number.

The FDA’s registration and renewal page may be accessed by clicking on the link below.

http://www.fda.gov/Food/GuidanceRegulation/FoodFacilityRegistration/default.htm.

In addition to registration, foreign based facilities must select a US agent to act on their behalf. The “agent” assumes responsibility for communication between the FDA and the foreign facility in the event of a food related emergency. Deringer is proud to offer this service as well as assistance with facility registration and other food related matters. Please contact Deringer's Compliance Department at (518) 298-8281 or e-mail fda@anderinger.com.