Export Compliance Daily is providing readers with some of the top stories for March 30 - April 3 in case you missed them.
After 47,000 stores in the U.S. closed in a week, Flexport says that so many companies can't take shipments arriving at East Coast ports that those ports are now shopping for more warehouse space. Because importing companies' warehouses are either full or closed, they tell the ports they'll pay demurrage charges for the goods to stay there. “The ports are actually worried now they won’t have enough space,” said Chandrakant Kanoria, Flexport's head of network operations, during a webinar March 31. He said Savannah is hoping to almost double its warehouse space, and the New York and New Jersey terminals are talking with warehouse providers to try to make room, as well. There are problems in the warehouse logistics ecosystem, as well, because Amazon warehouses stopped accepting any goods other than essentials.
Agricultural exporters and shippers are losing “hundreds of millions of dollars” due to shipping uncertainty and cargo detention penalties caused by the response to the coronavirus pandemic, said Peter Friedmann, executive director of the Agriculture Transportation Coalition. Friedmann was critical of the Federal Maritime Commission, which has yet to finalize a proposed rule issued last year that would provide guidance about how the FMC assesses the fairness of demurrage and detention practices. The rule’s public comment period ended in October.
The Federal Maritime Commission should quickly adopt its proposed interpretive rule for addressing detention and demurrage charges (see 1909130026), trade associations said in a March 16 letter to the FMC. “With ongoing challenges posed by the coronavirus, there is real concern about these fees being assessed when there are equipment issues beyond the control of the shipper or motor carrier,” the groups said. “Thus, these fees appear to be punitive measures by the ocean carriers, not an incentive to expedite container flow.”
Although Chinese ocean operations and domestic trucking activities are returning to normal, there remains significant concerns over equipment and space availability for ocean fighters around the world, according to a March 17 emailed alert from Crane Worldwide Logistics. Air cargo transportation also remains uncertain, with availability of ports in China constantly changing and countries canceling flights to regions with high concentrations of coronavirus cases, the alert said.
The Agriculture Transportation Coalition is urging U.S. exporters, before loading their containers, to confirm with ocean carriers that the cargo will reach their Chinese customers and will have proper refrigeration in case of delays at Chinese ports due to the coronavirus outbreak. The AgTC also said it is continuing to urge ocean carriers to refrain from imposing detention penalties on containers that are stuck at ports due to the virus containment measures in place (see 2002030034). “Within China, the supply chain has been compromised, starting at the China maritime terminals extending all the way to the ultimate inland destination points,” the AgTC said in a Feb. 11 emailed press release.
As the coronavirus outbreak disrupts supply chains, U.S. agricultural exporters are unsure when normal cargo processing will resume and are concerned about penalties from ocean freight carriers, according to a Feb. 3 open letter to ocean carriers by Agriculture Transportation Coalition Executive Director Peter Friedmann.
Kenya introduced several tax-related measures that may have direct and indirect impacts on traders and shippers, KPMG said in a Nov. 26 post. Several value-added tax measures broaden the scope of the definition of “supply of imported services” to people who may not be registered for VAT, the post said, and expand the scope of supplies subject to VAT to include goods purchased online. Kenya also introduced “expanded relief for goods exported from special economic zones” and a larger list of “supplies” exempt from VAT, including “plant, machinery and equipment” used with certain “plastics recycling plants,” as well as certain corn, flour and wheat products. Another measure expands the scope of taxable income of “non-resident ship owners” to include payments from “demurrage and detention of containers at a port,” KPMG said.
Several issues related to detention and demurrage remain to be addressed as the Federal Maritime Commission moves forward with its recent proposed rule on detention and demurrage practices, said Richard Roche of Mohawk Global Logistics, at the National Customs Brokers & Forwarders Association of America’s government affairs conference Sept. 23 in Washington. Key among these are notices of availability for cargo and charges for customs holds, he said.
Export Compliance Daily is providing readers with some of the top stories for Sept. 16-20 in case they were missed.