Biden’s Europe Trip Eases Trade Pains with Allies

This month, President Biden traveled to the UK, Brussels and Geneva on his first international trip since taking office in January. Among other purposes, the trip was billed as resolving transatlantic trade disputes, mending alliances, an affirmation of the American commitment to NATO, a chance to meet with the country’s closest political and economic partners and working to begin to create a coalition focused on investments G-7 member countries and elsewhere to counter China’s global ambitions in Asia, Africa and elsewhere.

His US Trade Representative, Katherine Tai, has been busy working with those member countries of both the G-7 and NATO (of which there is some overlap) on trade issues which have been simmering from both prior to and during the previous administration and were hampering efforts to forge this coalition.

Of greatest note for American importers and exporters are the suspended imposition of duties in the Digital Services Tax investigation and the suspension of duties in the large aircraft dispute, also known as the Boeing-Airbus subsidy – tit-for-tat tariffs that were imposed by both the US and EU on each other.

In January 2021, following comprehensive investigations USTR determined that the DSTs adopted by Austria, India, Italy, Spain, Turkey, and the United Kingdom discriminated against U.S. digital companies, were inconsistent with principles of international taxation, and burdened U.S. companies.

The US was set to impose Section 301 duties on these six countries, but suspended the planned implementation for 180 days after a consensus was reached that the G20 and the Organization for Economic Co-Operation and Development (OECD) would take up the matter of minimum tax levels so as to prevent corporations from seeking the lowest taxation haven to the detriment of other countries around the world.

The lists of products from the UK would have included consumer items such as handbags, shoes, cosmetics and clothing to name just a handful. The suspension gives all parties the breathing room to complete a global agreement and, hopefully, the ending of this investigation and no need to move forward with the planned punitive 25% tariffs.

In advance of President Biden’s trip to Brussels, USTR Tai traveled out ahead of him and met with her European and UK counterparts. Within days came news that the US agreed in principle on both a way forward and a five-year suspension on the large aircraft subsidy duties in the Boeing vs. Airbus case from the World Trade Organization.

Of bigger interest to U.S. companies should be the reaffirmation of The New Atlantic Charter agreed-to between President Biden and Prime Minister Boris Johnson. Both US and UK companies can look to this as the cornerstone for future transatlantic trade agreements, including a potential bilateral agreement directly between the two nations.

As an industry-leader providing eastbound and westbound logistics between the United States and United Kingdom, Future Forwarding is poised to take advantage of any improvements and strategic deals reached between these two nations. If your company does business between the US and UK or EU, speak to us today to learn more about our history and organization that features our own offices on both sides of the Atlantic benefits companies in the Southeast and the rest of the United States.

Unwelcome supply chain surprises: Withhold Release Orders

Importers need to add one more worry to their supply chains: detention orders issued by CBP for issues surrounding withhold release orders. Just as companies should perform due diligence before importing a shipment to look for antidumping or countervailing duties, questions should be asked of foreign suppliers whether or not the finished goods or component parts are the subject of withhold release orders and findings that would prohibit entry.

Every finished product begins with a bill of materials. The finished product, depending upon origin and parts, could need to undergo substantial transformation or meet minimum regional value contents to qualify for reduced or duty-free treatment under a bilateral or regional free trade agreement.

What happens, though, when one of those components turns out to be prohibited for entry? Importers of FDA regulated merchandise know about automatic detentions – if a product contains an ingredient deemed not safe for humans or animals, the agency detains and denies entry for consumption. CPSC regulated merchandise is the same. Fish & Wildlife prohibits improperly documented endangered species.

Importers of goods from China and other countries are becoming increasingly familiar with Withhold Release Orders – a determination made by CBP that goods from a country, manufacturer, or region are produced using forced or prison labor. When an entry is presented for release, Customs places the merchandise on hold and refuses to allow the importer to clear and receive the goods.

Recently, an apparel importer filed a protest challenging an exclusion of goods subject to a WRO. CBP excluded a shipment, claiming the cotton came from Xinjiang Production and Construction Corporation (“XPCC”) and its subordinate and affiliated entities who are the subject of a WRO.

CBP denied the protest.

The importer provided documentation showing the raw cotton was sourced from entities in the U.S., Australia and Brazil. What CBP demanded, and the importer could not produce despite the number and different types of records they presented, was no affirmative determination that at any point in the production forced labor was not used.

CBP maintains a list of active Withhold Release Orders that spans countries such as China, Brazil, India, Malaysia and others. Impacted industries include fishing, photovoltaic cells and even tomatoes.

Future Forwarding strongly encourages our clients to familiarize themselves with CBP’s Informed Compliance Publication on Forced Labor (available here) and also encourages requiring written answers about component sourcing and final point of manufacture locations. Companies should also lay out the expectation with vendors that production records can and will be produced on demand for either an internal compliance audit by the importer or in response to an inquiry from Customs and Border Protection.

For more information about Withhold Release Orders and whether your imports could be subject to this increasingly-used program by CBP, contact your Future Forwarding representative today.

FCL Not Available? Think LCL Instead.

Scheduled LCL as a viable option when FCL is unavailable

In the days of plentiful containers, on-time schedules and fluid ports, the decision whether or not to pay a flat rate for a full container versus per cubic meter for less than container load was never in doubt for most logistics managers. Now, with rates spiraling out of control and space allocations being how most cargo gets moved, the advantages to LCL shipping are outweighing the disadvantages.

If you’re new to contemplating LCL, we should probably start with what is LCL before moving on to why LCL is a better choice in today’s market environment.

Ocean freight moves in containers. What is inside those containers falls into one of three groups:

A full container that is loaded at a single origin factory for a single recipient at the destination.
A buyer’s consolidation in which freight from multiple suppliers is consolidated into that container for a single buyer or recipient at the destination.
A groupage container in which cargo from multiple shippers for multiple consignees is combined and shipped together.

Future Forwarding provides weekly scheduled LCL service between the United Kingdom and the United States, keeping our customers’ cargo moving on a stable, somewhat reliable schedule.

Each week, we commit to receive cargo until the closing date, the date that we stop accepting freight to load into the container. We then take all of the cargo in our possession, play a three dimensional game of Tetris to determine the optimal loading to maximize the space inside the container and give the loaded container to a steamship line.

That container with multiple cargo owner’s merchandise sails to the United States where it is taken to a deconsolidation warehouse to be separated into the same lots that were given to us at origin. Each of those shipments separately clears Customs and can be delivered after it is released and available.

We have discovered across our network that the cargo which moves the most reliability at this point is regularly scheduled less than containerload cargo. We have weekly confirmed bookings and equipment based on contracts and commitments we established and, by and large, carriers are honoring those contracts.

Unlike FCL, which comes with flat rate costs for ocean freight, bunker and terminal charges, the shipping costs and handling charges for less than container load are based on the weight, the volume or some combination of both. The extra handling that comes with loading and unloading the cargo containers at origin and destination adds cost, as well as the cargo being priced per cubic meter of space inside the container versus buying the entire container.

Future Forwarding has offices in both the United States and United Kingdom and are currently offering fixed-day weekly sailings for cargo between the United Kingdom and the United States.

We close out every week on Tuesday evening, sail on Friday and approximately seventeen days later, the cargo arrives in Atlanta via Wilmington, North Carolina.

For importers who order a monthly full container, working with their suppliers to ship whatever is produced weekly via LCL means a steady stream of cargo into their supply chains, avoiding additional weeks of delay after readiness waiting for equipment, a sailing or both. For companies who are unable to secure air freight capacity or for whom delays at origin or destination are causing gaps, LCL is a viable alternative.

At Future Forwarding, we understand that less than containerload may not be your first choice. It may not be your best option. It might, in all honesty, be your least worst option until rates, equipment and services have stabilized and become predictable and easier to demand forecast. Regardless of your reason for investigation less than container load, Future Forwarding is here to help.

For more information about our weekly LCL consolidation rates and schedule, fill out the contact form below and we’ll be in touch.

Future Forwarding’s Domestic Service

Commodity – High speed /high volume mailing machines used by healthcare, insurance and financial companies. Shipment can be 1 unit or as many as 21 different machines.

Problem – Damaged shipments arriving at Neopost’s customer (end user). Product is sensitive to rough handling and moisture. A secondary concern of Neopost was the on-time performance of the carriers. Current mode being used was traditional LTL.

Solution – Provide nationwide delivery coverage by utilizing a network of trucks that had available space outbound Atlanta to delivery markets required by Neopost. Network provided 1 pick 1 drop service which significantly reduced handling of their units. The network allowed more flexibility on final mile delivery as well as more overall shipment control (last minute diversion or delivery delay caused by the customer). A by-product of the program was an increase in on-time performance that traditional LTL struggled with.

Morphed Solution – As Neopost’s customer base grew so did the need to expand our service to them. FFC now provides white glove, inside delivery with debris removal upon request. Carpet protection when requested by the customer along with high COI approval for buildings that require special delivery clearance.

World Harvest Church

Future Forwarding’s Consulting Service

Future Forwarding offers a variety of consulting services ranging from simple classification questions to vastly complex projects.
A Global machine manufacturer came to Future Forwarding with an issue involving Customs and Border Protection. CBP was questioning the customer’s valuation and classification processes for import shipments. As the customer had a lack of understanding of import processes and international import law, the customer contracted Future Forwarding’s consulting services to investigate the issue and help provide Customs and Border Protection with clarification and the information requested.

In order to assess and address both the importer’s and Customs and Border Protection’s requests and concerns, Future Forwarding assembled an internal team of specialists to complete a classification and valuation review of all import entries for a five-year period. This team was comprised of four licensed customs brokers and one certified customs specialist with a combined total of 100+ years of classification and valuation experience. This assessment included “project” cargo valuations as the machine manufacturer imported multiple machines and parts across numerous import shipments in order to comprise a complete manufacturing plant as well as classification.

As a result of this evaluation, Future Forwarding was able to bring the importer into compliance with international import laws and Customs and Border Protection rules and regulations. Any irregularities and discrepancies discovered in previous entries were corrected. Future Forwarding was able to assist the importer’s legal counsel with submitting a prior disclosure to CBP in order to avoid any legal fines and penalties. In addition to the prior disclosure, importer education became a priority as well as assisting in implementing a compliance program for the importer to follow in order to avoid future errors and/or omissions in customs entries, duty/tax payments, and assisted the importer in understanding the true costs of import shipments.

Future Forwarding Featured in Business View Magazine

When Business View focused on supply chain and logistics in its February 2019, two of our vice presidents had a chance to speak about the ways our company boosts the efficiency of our clients. Based on interviews with Pam Brown and Shannon Whitt, the article highlighted Future Forwarding’s vision, history and growth, emphasizing our customized approach to every stage of the supply chain.

“We’re not everything to everyone, and we don’t try to be,” Whitt told the magazine. “We customize, whether that be import, export, warehousing, or domestic. We provide options to our clients, but we’re still very focused on doing what we do best. And we make sure we can handle it properly and economically before we commit.”

Read the Entire Article

Author: Colin Smith

Feds respond to supply chain woes

Multiple federal agencies scrutinizing supply chain performance, costs.

Biden’s Europe Trip Eases Trade Pains with Allies

Unwelcome supply chain surprises: Withhold Release Orders

FCL Not Available? Think LCL Instead.

Future Forwarding’s Domestic Service

World Harvest Church

Future Forwarding’s Consulting Service

Future Forwarding Featured in Business View Magazine

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