|Happy Holidays from all of us at USA Cargo Services
Here are some news items that we got from our membership in the Agriculture Transportation Coalition, and which may affect any company involved in international trade.
Rates are likely going up as carriers consolidate. In the span of the next 18 months we are going from 18 ocean carriers to 10. UASC (United Arab Shipping Co.) is disappearing into Hapag Lloyd; USLines disappeared into CMA-CGM; APL in the process of disappearing into CMA-CGM; Hamburg Sud will be brought into Maersk; MOL, NYK and K-Line becoming one carrier; China Shipping into COSCO; Hanjin gone; ZIM re-focusing. Combined with Alliances (see below), fewer carriers with whom to negotiate, less competition for your cargo — freight rates will be heading up in 2017, in some cases, rapidly.
There will soon be only 3 carrier Alliances The carriers left standing are forming into 3 Alliances, sharing ships and operations. Same total capacity, but in fewer but bigger ships; this means fewer sailings. With several carriers loading on the same huge ship, won’t they be combining their operations? So what will be the difference between carriers? If an Alliance controls more than 35% of the market in a trade, should the FMC or other agency step in, to assure competition?
Will the FMC Finally Act on Per Diem Charges? Two years ago carriers collected millions of dollars of free time penalties when terminals were so congested that shippers/truckers missed free-time deadlines for container return. The AgTC helped its members get carriers to waive those fees. But carriers should never have imposed them, shippers are pressing FMC to make such fees, during times of congestion, a Prohibited Act under the Ocean Shipping Act (Our readers can request a copy of the Act, by responding to this message).
Zika Virus. China requires fumigation/certificate for cargo loaded in Latin America, and South Florida. If the Zika mosquito spreads north in Spring 2017, China will expand requirement to additional ports, in US and elsewhere. Through our AgTC membership, and their US and China contacts, we will be the first to learn about the new ports in US and China where fumigation is required. We will pass that information on to you.
Trump’s Impact on West Coast Labor Negotiations The President-elect has nominated Elaine Chao to be Secretary of Dept. of Transportation. During the 2002 West Coast longshore contract shutdown, Ms. Chao was Sec. of Labor under President Bush. They waited 6 days, and moved in to get ILWU and the terminals to start working again (compared to the 8 months it took Pres. Obama 3 years ago). Will ILWU take notice of Ms. Chao, and can we avoid recurrence of a WC port meltdown? Time will tell.
Do you still have to provide VGM? Simply put, if you are being told you must provide VGM for export cargo loaded in the US, it is not true! Do not provide VGM, do not pay anyone else to provide it. Call us at 770-951-2155. (The rest of the world, including Canada exports, still must provide VGM, but AgTC has gained an exemption for US exporters.) We can provide you with all the details.
If you would like to discuss any of the above issues, or have any other questions about international shipping in this unsettled environment, just call Richard, Bill or Todd at USA Cargo (770-951-2155) and we will be happy to help you.