President's Desk Newsletter

INDUSTRY NEWS

Shipping Giants Impose Emergency Surcharges Amidst Gaza Conflict

Amid the Gaza conflict, Maersk, Zim and Hapag-Lloyd have individually introduced emergency risk surcharges (ERS) for cargo to and from Israeli ports. Effective January 8, Maersk's surcharge is $50 per TEU and $100 per FEU for Israeli shipments. Zim is applying a war risk premium, ranging from $50 to $120 per TEU, effective immediately and based on specific trade lanes. Hapag-Lloyd will introduce a War Risk Surcharge (WRS) from January 1, 2024, at rates of $40 to $80 per TEU, depending on the trade route. These surcharges are implemented to address heightened risks associated with shipments to and from Israel during the conflict.

Congress steps into debate over jurisdiction of rail fees for ocean containers

Rep. John Garamendi, D-Calif., is actively drafting legislation to "compel" the Federal Maritime Commission (FMC) and the Surface Transportation Board (STB) to establish a memorandum of understanding regarding their authority over international intermodal freight. Garamendi's involvement stems from shippers' concerns and the perceived indecision by the FMC and STB on jurisdictional uncertainties surrounding rail storage fees for ocean containers. The proposed legislation not only addresses these jurisdictional issues but also seeks to codify that rail demurrage fees should be billed to the ocean carrier. This approach aims to provide clarity and streamline processes for U.S. shippers. The National Shipper Advisory Committee (NSAC) recommends the inclusion of rail storage billing in the FMC's pending rules on detention and demurrage, emphasizing the importance of billing clarity for effective dispute resolution. Read More

USDOT opens multimodal freight office

In the inaugural meeting of the White House Council on Supply Chain Resilience, President Joe Biden and U.S. Secretary of Transportation Pete Buttigieg announced the establishment of the Office of Multimodal Freight Infrastructure and Policy. Led by Allison Dane Camden, the U.S. Department of Transportation's deputy assistant secretary, the office will oversee the nation's freight network and support the Freight Logistics Optimization Works (FLOW) program in collaboration with the U.S. Bureau of Transportation Statistics. Its responsibilities include developing the national multimodal freight network, reviewing state freight plans, and providing technical assistance to state and local governments. The FLOW program now includes the five largest U.S. container ports, seven of the largest ocean carriers and four of the five largest retailers by imports. Read More

Biden administration investing $653M in ports to improve supply chains and keep costs down

The Biden administration is allocating over $653 million from the bipartisan infrastructure law to fund port projects aimed at enhancing U.S. supply chain reliability. These projects, administered by the Department of Transportation's Maritime Administration, will benefit 41 ports across the country, including Long Beach, Milwaukee, and Newark. Notable allocations include $53 million for the Port of Long Beach to improve cargo flow and enhance safety at nearby railroad crossings, $43 million for a new commercial dock at Cold Bay, Alaska Port, and over $54 million for the Port of Tacoma, Washington, to install cargo racks and power supplies.

Customs Brokerage News

Importers Could Face Higher Tariffs Jan. 1

Importers of various goods from China could potentially face heightened tariffs starting January 1, 2024, should hundreds of Section 301 tariff exclusions expire as scheduled on December 31. These exclusions encompass over 300 products and include exemptions for 77 medical care products crucial for addressing the COVID-19 pandemic. Currently, these exclusions apply to any product meeting specified HTSUS numbers and product descriptions, regardless of whether importers submitted an exclusion request. Any reinstated tariffs would supplement those already in effect on imports worth hundreds of billions of dollars from China. These existing tariffs are anticipated to persist, regardless of the ongoing review by the Biden administration expected to conclude by the end of this year. U.S. Trade Representative Katherine Tai has indicated the possibility of changes, including removals, additions, and the introduction of a new exclusion process.

FMCSA tightens regulations to prevent fraud by brokers

The Federal Motor Carrier Safety Administration (FMCSA) has finalized a rule aimed at bolstering protection for trucking companies against unpaid claims from brokers. The rule, effective from January 16, 2024, tightens regulations in five key areas, focusing on broker financial responsibility and consequences for noncompliance. The rule includes provisions for assets readily available, immediate suspension of broker operating authority when financial security falls below $75,000, surety/trust responsibilities in cases of broker failure or insolvency, enforcement authority with monetary penalties, and eligibility criteria for entities providing trust funds. The Transportation Intermediaries Association and the Owner-Operator Independent Drivers Association view the rule as a crucial step in addressing potential financial fraud and enhancing broker transparency. Read More

Changes to Harmonized Tariff Schedule (HTS) and Schedule B by the 484(f) Committee for January 1, 2024

The 484(f) Committee, consisting of the U.S. Census Bureau's Foreign Trade Division, U.S. Customs and Border Protection, and the U.S. International Trade Commission, is responsible for reviewing requests related to changes in the Harmonized Tariff Schedule (HTS) for imports and the Schedule B for exports.

Recently, the 484(f) Committee announced revisions to the HTS and Schedule B, effective January 1, 2024. To view the full list of revisions, visit the USITC website.

Please be aware that this list is provided for reference purposes only and is subject to potential modifications before the specified effective date. If you have any inquiries or require further clarification, feel free to contact Eastern CHB, LLC.