Flexport is monitoring developments of the Coronavirus and its impacts on supply chains. The Chinese New Year (CNY) holiday is officially over, but supply chains are still struggling to bounce back. Learn more about the latest supply chain impacts from the coronavirus, and steps you can take to mitigate them here.
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Coronavirus Tanks Ocean Shipping An already slow season is taking drastic hits from Coronavirus, the respiratory disease now infecting over 28,000 people in China. An in-depth review by American Shipper reports shipping stock prices collapsing to their lowest point in 10 years, force majeure claims accelerating commodity slumps, and blank sailings and low spot rates shorting revenue up to $350m per week.
Storm Ciara Hits Europe In the past week, Northern Europe has been struck by Storm Ciara. The Port of Rotterdam, Port of Antwerp, and ports in the UK had suspended operations, causing delays for both import and export cargo. All ports have recently opened but are now dealing with a large backlog. More specifically, the Port of Antwerp has announced a minimum delay of 72-hours for cargo moving through the port. Although Storm Ciara has passed, another storm is expected this weekend, escalating the current situation.
E-Commerce Warehouse Boom Slows The WSJ details how new e-commerce warehouse construction may outstrip demand in the US, Canada, and Mexico as early as this year—but it’s still a landlord’s game. Projections of vacancy rates increase from 4.6% in 2019 to just 5.2% in 2021, well below a ten-year average of 6.2%.
Meanwhile, this week, Flexport Chief Economist Dr. Phil Levy noted the following economic highlights:
Section 301 List 1 Updates The USTR published new product exclusions from the first list of Section 301 tariffs for products originated in China. As with previous lists, the exclusions will apply retroactively to the July 6, 2018 implementation date and will be in effect until October 2, 2020. The USTR is also seeking comments on extending the third set of exclusions granted in April 2019. The comment period will last from February 16 until March 16, 2020.
Section 232 Additional Guidance CBP issued a CSMS message on the additional steel and aluminum tariffs that were recently enacted under Section 232. The duties will apply to certain nails, certain bumper stampings, and various wire cables. None of the Section 232 duties are eligible for drawback. GSP and AGOA are also not allowed to be treated with a duty preference when the goods are subject to Section 232 duties.
China Announces Reduced Tariffs China released a statement that it would reduce its retaliatory tariffs imposed on the US from 10% to 5% on February 14th when the US is also scheduled to lower tariffs as part of the "Phase One" agreement between the two countries.
**For a roundup of tariff-related news, visit Tariff Insider.
Also, pre-register now for FORWARD 2020, a three-day event that brings together the greatest minds in global trade for ideas and insights to advance the industry.