Potential Refunds for Importers, China Production to Increase, Coronavirus Impact Continues
· Corona Virus Update
Shipping volumes from China increased to about 50% of the seasonal average this past week, a significant improvement over the previous week. While there is still a significant shortage of truckers (less than 30% able to work presently) the increase in export container volumes is a promising sign.
Chinese factories are starting to get closer to normal production output though this continues to vary greatly based on the region and whether the manufacturer is struggling to get parts and raw materials. With the Coronavirus spread seemingly slowing in China we are hopeful that factory volumes will increase week over week as more workers can return to work.
Carriers continue to have blank (cancelled) sailings and this is making getting space on a vessel a bit more challenging. Containers are being rolled (moved to a later vessel) quite regularly. Importers should communicate closely with their freight forwarder and their suppliers to help ensure they have accurate ship dates and U.S. ETA dates.
Import volumes in U.S. ports is down over 20% this past week and expected to remain below seasonal averages for at least the next several weeks.
· U.S. / China Trade War Update
Rumors were that the U.S. might temporarily roll back some of the additional tariffs on goods from China but Treasury Secretary Mnuchin said that was not likely at this time. He did indicate however that “all options are still on the table.” Stay tuned.
Several new tariff exclusions were announced and importers are encouraged to check to see if any of their products may qualify. Go to https://www.strtrade.com/assets/htmldocuments/Product%20Specific%20Exclusions%20Granted%20-%20All%20Lists%20Combined.pdf for the latest list. Contact our office for assistance in recovering any refunds you may be due or if you have any questions – firstname.lastname@example.org.
· Ocean Carriers Looking to Make Up for Recent Losses
Ocean carriers continue to reduce the number of sailings from Chinese ports to the U.S. in an effort to keep prices from dropping and to help increase container rates to help recover some of their recent losses. Expect to see an upward push in rates over the coming months as container volumes begin to increase. Plan ahead by booking early to help secure space and get the best possible rate.
· Airlines Expected to Lose Well Over $100 Billion Due to Coronavirus
Airlines are expecting drastic losses due to the impact of the virus and are cutting scheduled flights in order to account for the drop in passenger traffic. Expect cargo rates to rise as space becomes tougher to secure over the coming weeks. With many companies getting seriously short on inventory the demand for air cargo space is likely to increase as capacity is being reduced.
· The Importance of Cargo Insurance
U.S. companies imported well over $2.6 trillion of merchandise in 2019 and surprisingly less than 20% of that cargo was insured for loss or damage. Many importers take the risk not fully understanding the scope of the risk. Without having cargo insurance if cargo is loss or damaged the importer would likely recover less than 10% of their loss from the carrier.
Carriers have very limited liability, often only pennies on the dollar, and considering that many shipments cost well into the 10’s of thousands of dollars it is a chance not worth taking. Cargo insurance rates range from ½ to 1 percent of the shipment value offering peace of mind for a very reasonable cost. We can assist you in securing cargo insurance, please contact us at email@example.com.
Please contact us for further information or questions – firstname.lastname@example.org.