Hello Customers, Colleagues, and Friends…
There are some major issues facing the international transportation industry as well as new regualtions that will affect many commodities you may be importing. A Canadian rail worker strike has shut down most railroad operations in Canada, Peak Season updates, and the Lacey Act Phase VII expansion will go into effect Dec. 1st.
Today, Aug. 22nd 2024, a rail strike in Canada was made official involving over 9,000 workers at CN and CPKC railroads. Maersk has already halted acceptance of cargo requiring rail transport through Canada. The strike will severely disrupt North American supply chains, especially impacting the movement of goods to and from U.S. ports. Specifically, West Coast ports that will absorb the overflow cargo not moving to Canadian West Coast ports but of course North American East Coast ports will see a disruption. The disruption could have significant economic repercussions, underscoring the critical interdependence of U.S. and Canadian transportation networks. While the longevity of this strike is unknown, all involved are hopeful for a speedy resolution. In addition to this troubling news, the ILA, which employs 45,000 maritime employees amongst the East and Gulf Coast ports, prepares for potential strike if labor negotiations aren’t resolved by Sept. 30th.
Asia-Europe ocean shipping is experiencing a softening in rates and demand as the early peak season momentum slows. However, seasonal factors are expected to stabilize volumes through the third and fourth quarters. Rates have dropped significantly from their mid-2024 highs due to increased capacity and summer market slowdown. Port congestion remains a significant issue, contributing to extended shipment durations and supply shortages, despite new capacity entering the market. Carriers, facing ongoing geopolitical tensions and a potential oversupply, are considering strategies like slow steaming to manage costs as demand fluctuates.
The USDA’s Animal and Plant Health Inspection Service (APHIS) has issued a notice regarding the ongoing enforcement of the Lacey Act’s import declaration requirements for certain plants and plant products, as amended by the 2008 Food, Conservation, and Energy Act. APHIS has announced the next phase (Phase VII) of this enforcement, scheduled to begin on December 1, 2024. A notice in the Federal Register (See below link) has included new regulated commodities (HTSUS) that will require PPQ Form 505 (See below link). IWPA is hosting training sessions that we suggest any importers involved in the importation of any Lacey Act regulated products attend. Do not hesitate to reach out to Krenz and Hannan for more information.
WHAT THIS MEANS FOR YOU
- Anticipated increased US port congestion from overflow cargo no longer flowing through Canada
- Softening of Asia-USA ocean import costs but stabilization in near term
- Potential for additional government agency filings for your import cargo that contains wood or wood products
- For those commodities requiring Lacey Act declarations, additional paperwork requirements of the Importer of Record
Please continue to plan accordingly for your import, export, and domestic transportation needs.
Sincerely, Your friends at Krenz and Hannan International
SOURCES
https://www.joc.com/article/canadian-ports-liner-operators-bracing-for-rail-strike-impact-5708554
https://www.joc.com/article/asia-europe-ocean-market-seasonality-kicking-in-bco-network-5708314
https://en.wikipedia.org/wiki/Slow_steaming