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“Horrible” conditions at NY/NJ seaport

Thursday, February 13th, 2014

trafficContainer terminals at the New York – New Jersey seaport complex are suffering the wrath of drayage company owners who claim conditions are “horrible” and “broken” and adversely affecting their businesses.  One of the major underlying causes appears to be the terminals’ limited truck gate hours, causing mile-long truck backups at the gates.  Additional factors include slow turn times due to ILA labor shortages and severe winter weather.

Although a Port Authority of New York and New Jersey task force promises to issue a report in June recommending improvements, it may be too late for the transport companies, whose customers are threatening to divert shipment to other East Coast ports.  See the full story in the Journal of Commerce (site registration required).

Tax law changes hit maquiladora industry

Friday, January 24th, 2014

mexico-flagOn January 1, 2014, a series of tax reform measures took effect in Mexico that have widespread impact on the country’s maquiladora operations along the US border, which account for 85% of Mexico’s manufacturing exports.

As reported in CGMA Magazine, among the changes are:

  • Tightening the definition what constitutes a “maquiladora”
  • Eliminating the maquiladoras’ exemption from VAT on imported materials and replacing it with a tax credit
  • Increasing the VAT in Mexico’s border states from 11% to 16%, in line with the rest of the country

After outcry from the maquiladora industry, Mexico’s President Enrique Peña Nieto issued a decree that addressed some of these concerns, including:

  • Imposing a two-year period that permits foreign owners to meet the criteria of the new definition of “maquiladora”
  • Allowing maquiladoras to claim the VAT credit in the month the VAT is paid (rather than the following month)

However,  in his decree, Peña Nieto also abolished income tax exemptions for maquiladoras, so their tax rate will increase from 17.5% to the standard 30% Mexican tax rate.



Attend next week’s Annual State of the LA/LB Port & CBP Update

Thursday, January 2nd, 2014

owit_oc_logo_smOn January 9, Women in Trade – Orange County is hosting the Annual State of the Los Angeles/Long Beach Seaport event with a panel of the following speakers from US Customs LA/LB officials:

  • Todd Owen – Director, Field Operations
  • Carlos Martel – Port Director LA/LB Seaport
  • Elva Muneton – Assistant Port Director, Trade

Also participating in the roundtable will be:

  • Dan Solis, Director of LA District of Import Operations, FDA
  • Hank Tapy, Director, Western Region, Office of Import Surveillance & Inspection, CPSC

Discussion topics will include:

  • Headlines of 2013 — Year in Review
  • Current Updates for Trade Compliance
  • Forecast of Trade Issues, Challenges & Priorities for 2014
  • Expected Operational Changes at National and Port Locations
  • Risk Assessment Methodologies
  • New CPCS and FDA Regulations and Standards
  • Import/Export Exams, Investigations and Inspections
  • Centers of Excellence & Expertise (CEE)

Register for this event to be held in Newport Beach.

Which country’s infrastructure is ranked worst in the world?

Tuesday, October 22nd, 2013

damaged rr

The Journal of Commerce has published a list of the “Nations with the Worst Infrastructure,” as determined by the World Economic Forum.  Included are overall rankings, and separate categories for worst ports, roads, railroads and air transport.  See if any countries in your supply chain are included!

Panama Canal expansion driving US port projects

Thursday, September 12th, 2013
Port of Savannah, GA.  © Henry County Development Authority

Port of Savannah, GA. © Henry County Development Authority

Anticipating the mega-ships that will traverse the Panama Canal when its expansion project is complete, the Port of Baltimore has already spent millions on enormous cranes that can service those vessels.  Moreover, Vice President Joe Biden just announced a federal grant of $10 million for “widening and straightening the shipping channels into the port.”

Other East Coast ports are following suit.  The federal government is helping to expedite the developing and deepening the harbors for New York and New Jersey; Charleston, S.C.; Savannah, Ga.; Jacksonville, Fla.; and Miami.  Eager to capture their share of mega-ship traffic, these ports are taking on debt to finance upgrades in advance of the canal project’s completion, set for 2015.  Not to be outdone, West Coast ports, such as LA and Long Beach, are undertaking their own projects to gain market share.

Outside of deeper channels and bigger cranes, ports will have to consider other improvements in port infrastructure, such as on-dock rail service to quickly move containers, and labor — ensuring that there are enough longshoremen to unload the larger vessels, and sufficient harbor pilots (and tugs) to guide the ships.


Port of NY and NJ suffers crushing delays

Tuesday, August 20th, 2013
© Port Authority of NY & NJ

© Port Authority of NY & NJ

Importers shipping to the New York – New Jersey port complex have been subject to extensive delays this summer, an immediate result of technical glitches with the terminal operator’s new operating platform.  However, according to the Journal of Commerce, the software issues “set off a chain reaction that exposed the port’s vulnerabilities in labor, facilities and operating practices.”

As a result, ships were diverted to other ports, truckers encountered hours-long waits, and drayage companies accumulated significant losses.  Meanwhile, retailers are worried about the upcoming peak season for holiday imports.

Plans are in place to reduce delays, including hiring more longshore workers and extending hours for truckers to access terminal gates (nearly 90% of the port’s traffic moves via truck).

The full article is available here.

New ISF enforcement procedures for Ports of Los Angeles and Long Beach

Thursday, July 18th, 2013


As part of US Customs’ stepped-up enforcement of liquidated damages for ISF violations, officials at the Los Angeles/Long Beach Seaport have announced new enhanced enforcement measures particular to that port complex.

Specifically, in light of “continued non-compliance with ISF requirements,”

[b]eginning July 15, 2013, CBP [at the LA/LB Seaport] will make use of newly activated cargo holds in [ACE] to address non-compliance with the ISF rule.  CBP will hold non-compliant ISF shipments at the terminal until the required ISF is filed.  Once the ISF data is received and a security assessment is made, additional enforcement actions including Non-Intrusive Inspection (NII) and/or intrusive exams may be initiated.  CBP may also assess liquidated damages of up to $5,000 per violations as warranted.

Importers may notice that this is a departure from CBP’s past practice for situations where no ISF was on file; in those cases, Customs would typically order a Non-Intrusive Exam (e.g., x-ray) and/or an Intrusive Exam (e.g., physical exam at a CES), and, in most instances, would then remove the hold and allow the shipment to proceed.

Now, the shipment will be held, and no action will be taken, until an ISF is filed.  If an importer receives notice that its shipment is being held, a manifest query should be run in order to determine the reason for the hold, which could possibly be no record of an ISF filing.

For more information, including the new ACE cargo hold codes, please see the attached Public Bulletin on LA&LB ISF Enforcement Procedures.


CBP opens final three CEEs

Monday, June 10th, 2013

US Customs has announced that it will launch the final three Centers of Excellence and Expertise (CEEs) – Agriculture & Prepared Products in Miami, Apparel, Footwear & Textiles in San Francisco, and Consumer Products & Mass Merchandising in Atlanta.

As reported here previously, the now 10 CEEs are the result of a collaborative effort between CBP and the trade to create a virtual one-stop processing center for imports that fall within broad industry categories (although each category is based in a specific port, CBP experts for that category are linked virtually to that CEE even if they work remotely).  As part of CBP’s Trade Transformation efforts, the CEEs lower the trade’s cost of business, provide greater consistency and predictability and enhance CBP enforcement efforts for transactions within each center.

Some additional points from Adrienne Braumiller, Esq., of Braumiller Schulz, LLP, from her recent post, “Centers of excellence and expertise:  a boon for importers”:

  • In a recent survey of the trade community,
    • 75% of participants indicated that they were very satisfied with their membership in a center
    • 96% percent indicated that their center helped them resolve issues they had with CBP
    • 50+% percent said they benefited from fast shipment delay resolutions, direct contact with CBP, and more clarity on CBP requirements.
  • Many non-CEE participants have used centers to answer questions ranging in subject from C-TPAT procedure to CF-28s and cargo holds and these non-participants seemed to be satisfied with the center’s assistance.
  • CEEs plans to transfer all port-of entry responsibilities to the CEEs, including revenue collection, a gap now that requires participating importers to file their entries with their designated CEE but provide a copy with a check for duties owed to the actual port of entry




Reminder about imported cargo shipped in wooden crates

Wednesday, May 29th, 2013

woodencrateIf you are importing cargo contained in regulated wood packaging materials (or importing the wood itself as cargo), you are reminded that the wood packaging must be heat treated in accordance with ISPM standards, and 

“…must be marked in a visible location on each article, preferably on at least two opposite sides of the article, with a legible and permanent mark that indicates that the article meets the [heat treatment standards].”  7 CFR §319.40-3(b)(2) (emphasis added).

At some ports, US Customs officials have been broadly interpreting this regulatory minimum to require the ISPM mark on all sides of the crate, presumably so that the inspecting CBP officers do not have to move heavy crates in order to find the required markings.  If the inspecting officer cannot safely view the heat treatment mark (depending on the particular orientation of the crate at the point of unloading), the importer runs the risk of having to re-crate the cargo at the port using suitable materials (and destroying the original wood), or possibly returning the shipment to its origin.

JOC’s top 50 container ports

Monday, May 13th, 2013

worldmapThe Journal of Commerce has published its annual list of the top 50 container ports in the world.  Not surprisingly, eight of the top ten ports are located in Asia.  In fact, six of the top ten are in China, with Shanghai ranked as number 1.

Los Angeles was the top US port at 16th, overtaking Long Beach (ranked 21st); the combined LA/LB port complex would rank 8th on the global list.