Ocean and air freight rates and trends; customs and trade industry news for the week of January 15, 2020.
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US Bike Makers Struggle to Replace Chinese Supply Chains The Phase 1 trade deal signed by the US and China today leaves the 25% tariff on bikes and many other products from China. The difficulty of sourcing bicycles from outside China will be familiar to many industries, according to Reuters, which cites a Cowen & Co. survey showing only 28% of North American companies had moved supply chains away from China.
Carrier Overcapacity Will Continue in 2020 New research predicts that supply will continue to surpass demand in container shipping this year. New ships are likely to add 1.2 million TEUs, with about half of those on ultra large container vessels (ULCV), according to American Shipper. Conversely, even if blank sailings equal or surpass the 253 recorded in 2019 (up from 145 in 2018) while hundreds of ships stop sailing to be fitted with scrubbers, surplus supply should give freight buyers a pricing advantage in 2020.
Meanwhile, this week, Flexport Chief Economist Dr. Phil Levy noted the following economic highlights:
MTB Petition Process The International Trade Commission (ITC) received more than 4,000 petitions for reduced duties under the Miscellaneous Tariff Bill. The next step is the public commenting phase, where comments can be submitted between January 10 and February 24 for the ITC to consider. Feedback must be filed through its portal. Once the comment period closes, the ITC will compile a final list and submit it to Congress for approval in the fall of 2020.
CBP Releases 2020 Calendar and Updates its User Fees Customs and Border Protection (CBP) sent a Cargo Systems Messaging Service (CSMS) message listing the Federal Holidays that will be observed during the 2020 calendar year. In addition, it updated its user fees page to reflect all fees, outside of duties in connection with import or export of goods from the US.
**For a roundup of tariff-related news, visit Tariff Insider