07.16.18 | USTR Issues Latest Round of Proposed Chinese Tariffs
As a result of China’s retaliation to the USTR Section 301 investigation and failure to change its import policies, the Trump Administration has directed the Office of the U.S. Trade Representative (USTR) to begin the process of imposing tariffs of 10% on an additional $200 billion of Chinese imports spread over 6,031 separate tariff lines. The new list of products and intended tariff increases can be found here>>.
Given the number of HTS codes in play, most importers are likely to feel the effects of this potential policy. Should your company wish to discuss mitigation opportunities, please contact your Kuehne + Nagel sales representative or brokerage manager.
The USTR will hold public hearings from August 20 – 23, 2018 to evaluate comments from interested parties in the United States. Should companies seek to provide input or testimony, all requests to appear before the USTR, as well as all pre-hearing submissions, must be received by July 27. Written comments, however, will be accepted until August 17. The USTR prefers electronic submissions through the Federal eRulemaking Portal at http://www.regulations.gov and reference docket number USTR-2018-0026.
It is uncertain how this latest round of proposed tariffs will end, and to what extent the list itself will be shortened or lengthened, but all importers should be aware of the potential consequences. The first step of any such evaluation is to make sure the HTSUS codes that are being used are in fact accurate and defensible.
The Kuehne + Nagel Customs Brokerage team is monitoring this situation closely and will follow up with additional information as necessary.
06.28.18 | New Tariffs on Chinese Goods Effect July 6th
The U.S. Trade Representative (“USTR”) has updated and released a list of HTS products imported from China that will be subject to a 25% tariff effective by July 6, 2018. Kuehne + Nagel is fully aware of the potential financial ramifications to our customers. For education and assistance in regards to these impacts and potential mitigation, please contact your local Kuehne + Nagel customs brokerage manager or sales representative.
The new tariffs are designed to be rolled out in two stages. Tariffs on products from 818 tariff lines, reflecting $34 billion worth of imports from China, are scheduled to become effective on July 6, 2018. USTR also proposed tariffs on products from an additional 284 tariff lines, reflecting $16 billion worth of imports. This latter set of tariffs is currently in the proposed stage. Written comments related to the second list of tariff lines are due by July 23, and public hearings will be held.
The proposed tariffs are being imposed after the USTR investigation determined that China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation are both unreasonable and discriminatory. As such, the subject merchandise generally focuses on products from industrial sectors that contribute to or benefit industries such as aerospace, information/communications technology, robotics, industrial machinery, new materials, and automobiles. The list does not include goods commonly purchased by American consumers such as cellular telephones or televisions.
The two lists discussed herein may not constitute the final word on the matter, as the Administration indicated it will consider pursuing future measures against China if the latter retaliates for the Section 301 tariffs. As expected, China indicated it would react swiftly, quite likely with a separate 25% tariff targeted at U.S. industries producing agricultural goods and motor vehicles. Companies that wish to seek an exemption from such additional tariffs may do so. However, the USTR is yet to publish specific details as to the process importers will be required to follow. Such process will be set out in a separate USTR Notice to be published later.
05.30.2018 | China's 24 Hour Advance Manifest Regulation effective June 1
China Customs Administration has released Order No.56 (2017) to adjust the advance manifest rules for China imports and exports, effective on June 1, 2018. Kuehne + Nagel will comply with the new requirements and transmit all required electronic data to China Customs prior to arrival or departure of airfreight and seafreight transports. In order to avoid delayed shipments, the following key points require your close attention in your future shipping documentations:
1. Manifest submissions must be made 24 hours prior to loading. This includes all inbound and outbound aircrafts or vessels going to/via/from China mainland ports.
2. The Manifest must reflect accurately and completely all goods under the bill of lading and waybills.
3. The cargo description must be complete, accurate, and cover all the goods.
4. Full contact details of the Shipper and Consignee (or the Notify Party if Consignee is as To Order) are mandatory, including the Enterprise Codes. For example, United Social Credit Identifier (USCI) and Organization Code (OC). Additional data elements required in your documentation include:
• Shipper’s company code – US EIN,
• Shipper’s phone number
• Consignee’s company name
• Consignee’s company code (your buyer will need to provide this to you)
• Consignee’s phone number
• Name of contact person for Consignee
• Phone number for contact person for consignee
• Notify Party’s company name
• Notify Party’s phone number
Note: As the US shipper, you must obtain the Chinese consignee’s USCI or OC before placing the booking with Kuehne + Nagel at origin. The US consignee would need to provide their EIN number to their shipper in China.
Currently, the Chinese Customs authorities have not announced consequences for missing, wrong, or late filings. However, some carriers have announced that the failure to comply with this new regulation will result in either the non-shipment of cargo from port of loading, or the risk of cargo being held or rejected by the Chinese Customs authorities. In either case, any potential additional costs will be for account of the shipper, regardless of the Incoterms being used for said shipment.
We will keep you posted when further developments regarding implementation of the regulation is available. Should you have any questions, please feel free to contact your local Kuehne + Nagel representative.
03.22.2018 | Additional Import Steel and Aluminum Tariffs
As you may already know, President Trump issued two proclamations - imposing a 25% import tariff on steel and a 10% import tariff on aluminum - from all countries except Canada and Mexico. These additional tariffs will apply to articles entered or withdrawn from warehouse for consumption as of March 23, 2018.
Kuehne + Nagel brokers are prepared to comply with the tariffs requirements for affected articles of steel and aluminum. If you have any questions regarding your potential duty exposure for the tariffs described above, please contact your Kuehne + Nagel representative.
For the new steel tariff, articles are defined in the Harmonized Tariff Schedule (HTS) as follows. The order does not apply to downstream products made with steel or steel parts, such as structures, reservoirs, tanks, containers, wire, etc.
- 7206.10 through 7216.50
- 7216.99 through 7301.10
- 7302.10, 7302.40 through 7302.90
- 7304.10 through 7306.90
For the new aluminum tariff, articles are defined in the Harmonized Tariff Schedule (HTS) as follows.
- 7601 – unwrought aluminum
- 7604 – aluminum bars, rods and profiles
- 7605 – aluminum wire
- 7606 / 7607 – aluminum plate, sheet, strip, and foil (flat rolled products)
- 7608 / 7609 – aluminum tubes and pipes and tube and pipe fittings
- 7616.99.5160 / 7616.99.5170 – aluminum castings and forgings
On March 19, 2018, the Department of Commerce’s Bureau of Industry and Security (BIS) published in the Federal Register, an interim final rule outlining the procedures for parties in the U.S. to submit requests for exclusions from the actions taken by the President in regards to the steel and aluminum tariffs. Exclusion requests may only be submitted by individuals or organizations using steel in business activities inside the U.S. Requests must be filed electronically on regulations.gov using the specific docket numbers. Steel interim rule can be found by searching BIS-2018-0006 and aluminum interim rule can be found by searching BIS-2018-0002. The Federal Register notice may be found here.
To read the presidential proclamations in full, click following links:
02.01.2018 | ELD Mandate - Plan your Shipments in Advance
We are still seeing that the implementation of the ELD mandate is affecting container truck capacity, rates, productivity, and driver shortages throughout the USA. As always, Kuehne + Nagel strives to accommodate your needs and asks for your continued cooperation and understanding during these challenging times.
- Load to driver availability ratio is running at a minimum of 10:1 in some areas, especially throughout the Southeast and Midwest.
- Increased volumes and longer turn times for loads are affecting chassis shortages at terminals and rail ramps in Dallas & Houston, TX; Chicago, IL; Minneapolis, MN; Omaha, NE; Denver, CO; Cincinnati & Columbus, OH; Memphis, TN; Atlanta & Savannah, GA; Charleston, SC; Charlotte, NC and Jacksonville, FL.
- Because of port and terminal congestion, ports and rail-ramps are blocking off areas to cargo pick-up so they can free resources to work on incoming vessels or trains. This results in cargo not being accessible until these areas are opened up again.
- Higher levels of pre-pulling of loads being stored on trucker’s yards to minimize port and terminal demurrage costs. This obviously adds to the chassis shortages.
- Lead-time for driver availability, in some areas is as high as 2 weeks!
- Ocean carriers are unable to manage the door moves within the allowed free time, which is resulting in the assessment of port/rail demurrage.
- Container trucking vendors are having to raise driver pay and other incentives in an effort to retain their services and are ultimately now raising rates to customers.
We do not anticipate any further changes in the near term. Not only does the current backlog in some areas need to be reduced, but we also anticipate a surge in import volumes as the pre-Chinese New Year shipments from Asia start to arrive at US ports and rail-ramps in February and March.
We will continue to monitor the situation and provide further updates. Please feel free to reach out to your local Kuehne + Nagel representative for any questions or concerns regarding this topic.
12.22.2017 | CBP updates on Merchandise Processing Fee (MPF) and Generalized System of Preferences (GSP)
We want to remind you of two important updates from the U.S. Customs and Border Protection - Click here
10.13.2017 | Kuehne + Nagel San Francisco, CA Update
KN’s Disaster / Business Recovery Center is monitoring the fires in Northern California. We are pleased to advise that none of our employees have been affected by the fires in Northern California. Our KN San Francisco, CA (SAL) office is operating as normal. The FAA has reported flight delays due to lower visibility at SFO Airport, please check with airlines for the latest status.
We will continue to monitor and advise of any news affecting our operations.
10.11.2017 | Kuehne + Nagel San Juan, PR Update
Please be advised that Kuehne + Nagel San Juan, PR continues to be fully operational under the following conditions:
- Kuehne + Nagel staff continue to work under difficult circumstances. Some are still working from the property owners offices with laptops and some staff are working from the hallway of our main office to facilitate the connectivity available from the main office I.T. Network System. The main office will remain closed until repairs are complete due to flooding from Hurricane Maria.
- The telecommunications service provider was able to finalize the installation of the WiFi antennas and configuration of the system from the main office to the warehouse. Today we will verify that connectivity is working, that way we can have everyone working back in the warehouse so we can start with other work that the office needs to be operational again.
- Telephone system is still down. Please contact SJU BM / Gilda Collazo cellular at +1-787-648-7554 for any urgent matters.
- The Kuehne + Nagel staff continues to handle daily business transactions but continue to face some constraints with the airlines ground handlers and steamship lines local agents, but cargo is moving (imports and exports).
- Shipping lines are operating, but the terminals are totally saturated and all the processes have to be done manually and with messengers. This slows down every move considerably.
- The situation at the airport is still chaotic with the warehouses of the airlines being damaged and airlines request immediate pick up of import cargo. Kuehne + Nagel SJU nevertheless is getting shipments in and out. But, all the processes are manually and messengers have to be used for everything.
- US Customs is operational, but they are still working in only one of the three locations that they have in the metro area. The airport office is still closed as of today.
- Kuehne + Nagel SJU has started receiving regular cargo, not only the aid-relief cargo which was the case the last few weeks.
07.10.2017 | LAX & LBG Marine Terminal Operators to Increase Traffic Mitigation Fee
The West Coast MTO Agreement (WCMTOA) announced an increase in the Traffic Mitigation Fee (TMF) at the Ports of Los Angeles and Long Beach, scheduled to take effect on August 1, 2017. As a result, Kuehne + Nagel will increase the TMF in quotes and billings by like amounts effective for cargo gating in or out of port terminals on or after August 1, 2017.
The TMF will be $72.09 per TEU (twenty-foot equivalent unit) or $144.18 per forty-foot container. The TMF is charged only on containers that are moved between 3:00 a.m. and 6:00 p.m. on weekdays. No TMF is due for containers moved during Off-Peak shifts (6:00 p.m. to 3:00 a.m. on weekdays or 8:00 a.m. to 5:00 p.m. on Saturdays). The TMF was introduced in 2005 to reduce daytime port congestion, and its proceeds help pay for the night and Saturday terminal shifts. For more information, click here >>.
Should you have additional questions, please contact your local Kuehne + Nagel branch office or representative.
06.06.2017 | Qatar Crisis impacts Air and Ocean transports
Several Middle Eastern countries severed diplomatic relations with Qatar and blocked flights and ocean transports to the country from its airports and seaports.
Our Kuehne + Nagel Airfreight Team is closely monitoring the situation and working with Qatar Airways and other carriers to make sure any cargo on hand in Doha (DOH) is scheduled as priority to be returned back to its U.S. origin. Kuehne + Nagel Airfreight gateways in Washington Dulles (IAD), Atlanta (ATL), Dallas (DAL), Chicago (CHI), Los Angeles (LAX), and Mexico (MEX) have established space and allocations with alternative carriers to destinations which cannot be serviced by Qatar Airways.
Several ocean carriers have stopped the acceptance of all bookings to and from Qatar effective immediately. Our Kuehne + Nagel Seafreight Team is also closely monitoring the situation, and any active bookings are under review and notifications will be sent as appropriate.
We will keep you posted as we receive further updates from Qatar Airways and other carriers. In the meantime, if you have any questions, please contact your local Kuehne + Nagel representative.