In the last year or so, it has become clearly evident to us that ocean carriers are treating European and other forwarders differently than how they deal with U.S. forwarders, creating a distinctly competitive disadvantage for U.S. ocean forwarders, NVOCCs and Customs brokers. The bottom line activity is that ocean carriers are creating beneficial sell rates to “forwarders”, usually in ocean carriers’ tariffs, for use exclusively by European forwarders located in certain locations in Europe and elsewhere (not the U.S.). We are using the term “forwarders” here in the U.S. sense. But for our narrative here, the European forwarder, located in Europe and other locations[1], will dispatch cargo from Europe based on lump sum rates formulated from the sell rates offered to them by the ocean carriers, but will not hold out as NVOCCs, nor issue house bills of lading. Many of these forwarders are neither licensed nor registered with the FMC as NVOCCs. In fact, U.S. forwarders under the current definition of “forwarders” could similarly issue lump sum rates under the current FMC regulations for export transport from the U.S. Unfortunately, the ocean carriers, probably sensitive to U.S. regulatory structures do not provide U.S. forwarders similarly competitive rate structures for exports from the U.S. or for inbound traffic controlled by U.S. consignees. But also, more egregiously, if a U.S. forwarder, who also may be an NVOCC/Customs broker, controls import cargo to be shipped to the U.S. on a “collect” basis, the U.S. Ocean Transportation Intermediary (“OTI”) may have to “purchase” a favorable rate from the unlicensed, unregistered forwarder in Europe who does have the benefit of the competitive rate, even though it may not be a licensed or registered NVOCC.  The question: Is this legal? After discussing this with FMC officials, the answer is, “Probably.”
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Court of International Trade

Summary of Decisions

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On June 3, 2019, in the ongoing case of determining whether or not Plaintiff Midwest Fastener’s zinc and nylon anchor products are considered to be nails, the CIT sustained the Department of Commerce’s final results of the redetermination pursuant to the Court Remand. The CIT concluded that Plaintiff’s zinc and nylon anchors do not function like nails and are considered a separate type of product from nails by the relevant industry. Commerce’s remand results were sustained and Plaintiff Midwest Fastener’s products were excluded from the scope.

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On June 6, the CIT denied Plaintiffs Confederacion de Asociaciones Agricolas del Estado de Sinaloa, Consejo Agricola de Baja California, Asociacion Mexicana de Horticultura Protegida, Asociacion de Productores de Hortalizas del Yaqui y Mayo, and Sistem Producto Tomate (collectively, “Plaintiffs”) motion for a temporary restraining order (“TRO”) and preliminary injunction (“PI”) in the antidumping duty investigation of tomatoes from Mexico. The Court determined that the Plaintiffs had not met their burden to establish the likelihood of success on the merits and irreparable harm absent injunctive relief. They also had failed to establish if the hardships tip in favor of denying the Plaintiff’s motion. The Court also found the public interest to be neutral. For those reasons the CIT denied the plaintiff’s motions.
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According to the American Trucking Association, there is a current shortage of about 51,000 drivers which is impacting U.S. retailers, and it is predicted to get worse in the coming years. The driver shortage is leading to delayed deliveries and higher prices. Also coupled with driver shortages are equipment shortages, including in the maritime container/chassis environment. Many, if not most, retailers are subject to seasonal cycles where timely delivery is key to a “make it or break it” year. Other retailers, such as e-commerce retailers and other lesser known industry groups (the animal feed industry, for example) do not have seasonal peaks, but a substantial percentage of these industry segments have same day or next day delivery requirements essentially on an on-going basis. The retailer industry, including e-retailers, are looking to different solutions for addressing these real bottom-line issues—i.e., getting all kinds of goods to customers in a timely manner.
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IranPresident Trump signed a new Executive Order on August 6, 2018, titled “Reimposing Certain Sanctions with Respect to Iran”. The Executive Order was timed to coincide with the last day of the 90-day wind-down period established for activities associated with certain sanctions relief authorized by the Joint Comprehensive Plan of Action (“JCPOA”).  As a result, the first round of sanctions against Iran will become effective at 12:01 a.m. on August 7, 2018.
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On April 15, 2018, the Department of Commerce’s Bureau of Industry and Security (“BIS”) issued a denial order against ZTE Corporation and ZTE Kangxun Telecommunications Ltd. (collectively “ZTE”), effectively banning U.S. companies from providing components to ZTE  because the company had failed to comply with the terms of a disciplinary agreement reached in March 2017 arising from violations of U.S. export control restrictions against Iran and North Korea. It is estimated that U.S. companies provide nearly 25-30 percent of the components used in ZTE products. ZTE’s U.S. subsidiary advertises that it has been ranked by independent industry analysts as the fourth-largest supplier of mobile devices in the U.S. overall and second-largest supplier of prepaid devices.

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shipping containersOn Friday, February 23, 2018, the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) imposed blocking sanctions against one individual, twenty-seven entities and twenty-eight vessels known to have previously provided maritime support to North Korean coal and petroleum transactions. OFAC added the individuals, entities and vessels to its Specially Designated Nationals List (the “SDN List”), which will generally prohibit the fifty-six sanctioned parties from transacting with the United States or any United States person.

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North America MapThe government shutdown began on Saturday at 12:01am. Here is a list of several agencies involved in trade and transportation issues that will be affected.

International Trade Commission

The International Trade Commission will only have three to seven individuals working during the shutdown in order to protect life and property. The six Commissioners are presidential appointees and therefore are exempt from the furlough.
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shipping containers In guidance released August 28, 2017, U.S. Customs and Border Protection (CBP) reminded carriers whose ocean vessels have been diverted from their intended port of unlading by Hurricane Harvey to amend their manifests to reflect the new port of unlading. Amending the manifests ensures that the automated terminals at the new port of discharge will receive the appropriate notifications. But who must pay the additional costs that are incurred when cargo is rerouted because of extreme weather?

Shippers Usually Bear Disaster Expense

Hurricane Harvey has disrupted shipping in Texas and Louisiana, forcing carriers to divert vessels to alternate ports. This raises the question of whether shippers must assume the risk and additional costs of receiving cargo at a port to which it was not destined and for on-carriage to get the cargo to its ultimate destination. Additionally, shippers that intended to export cargo from ports impacted by Hurricane Harvey may face terminal demurrage charges for containers that were delivered before the hurricane but have not been shipped.


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Container ShipCurrent bills (HR 2593, S. 1119) authorizing appropriations for the Federal Maritime Commission contain substantive terms which seem to forecast the path the regulatory agency is taking with respect to both tariff requirements and regulation of ocean transportation intermediaries.

Tariff References

The bills address some meaningful changes to the current antiquated tariff system. Combined with the FMC’s new Regulatory Reform Task Force, and the corresponding Notice of Inquiry issued by the FMC seeking specifics from the shipping public for deregulation, it appears the FMC  may be taking a clear stance on tariffs. Acting Chairman of the Federal Maritime Commission, Michael Khouri, has made several public statements which confirm the conclusion that tariffs have no place in the current ocean transportation marketplace.


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shipping containersOn May 31, 2017, Petitioners DAK Americas LLC, Nan Ya Plastics Corporation, America, and Auriga polymers Inc. filed a petition for the imposition of antidumping duties and countervailing duties on imports of Fine Denier Polyester Staple Fiber from China, India, Korea, Taiwan, and Vietnam.
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