Freight Market Update: April 3, 2019
Ocean and air freight rates and trends; trucking and customs news for the week of April 3, 2019.
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Ocean Freight Market Updates
Port of Oakland to Install Hybrid Cranes
The Port of Oakland is retrofitting all 13 of its cranes at the Oakland International Container Terminal to operate using hybrid power. The cranes will have the same lift capacity and range, but will have the ability to generate its own power when lifting containers, only occasionally using diesel fuel.
UK Main Ports Remain Congested
Quay side operations have improved, but a shortage of haulage capacity restricts movement. Haulage capacity in Germany remains a challenge, reducing intake of barges and increasing moves via rail and truck. There are no solid plans for Brexit yet from carriers.
Impact of New IMO ECA Regulations
The International Maritime Organization (IMO) has mandated under new Emission Control Area regulations that by 2020, all merchant vessels must reduce their sulfur emissions from 3.5% to 0.5%.
Whether they install scrubbers, build new vessels, or use higher-quality fuel, carriers will need to make significant changes to comply with the new regulations, and those changes will come at a cost to shippers. Freight rates may climb between now and 2020 as a result. Some vessel owners are concerned that vessels may “cheat” and burn high-sulfur fuel oil anyway, as the IMO has not yet outlined enforcement guidelines.
For an in-depth look at the regulation and how to prepare, read our blog post: IMO 2020: What Shippers Need to Know Now
Air Freight Market Updates
Boeing 737 Max Jet Investigation Continues
The plane’s stall-prevention system is under scrutiny as a potential cause of recent crashes of Boeing 737 Max planes. The safety feature was unknown to pilots flying the plane, negating the need for additional training but providing no warning when the system malfunctioned.
Trucking Market Updates
NY Congestion-Pricing Plan Approved for 2021
New York approved a congestion-pricing plan expected to begin in 2021 that will make deliveries more expensive, but will help alleviate congestion. Trucks and cars will pay a fee to enter the congestion zone south of 60th Street in Manhattan. This fee will likely be passed off to consumers, but it is expected to reduce the amount of vehicles on the roads.
Customs and Trade Updates
Anti-Dumping Investigation for Wooden Cabinets and Vanities Update
CBP stated they will commence their investigation of wooden cabinets and vanities from China under case numbers A-570-106 and C-570-107. The comment period is now open for all to challenge any parts of the scope, and is intended to give the Department of Commerce the opportunity to hear all parties prior to issuing a preliminary determination.
DHS Order 750 Officers to Border
The Department of Homeland Security’s (DHS) Secretary Kirstjen M. Nielsen reallocated 750 customs officers to Border Control Sectors to help with the ongoing security and humanitarian crisis at the U.S.’s southern border. The redirection of officers from Ports of Entry will slow the processing of border-crossing shipments.
**CTPAT Social Compliance Proposal **
Customs Trade Partnership Against Terrorism (CTPAT) members will be required to maintain a social compliance monitoring system under a new proposal using the already-established seven criteria from the Department of Labor. If a member commits a program violation, violation information will be publicly disclosed. CBP’s current policy is not to disclose any participants of the CTPAT program.
For a roundup of tariff-related news, read our Tariff Insider_. _