CV International Newsletter  
  
July 2020

In early 2020, our world changed radically as the novel coronavirus (COVID-19) began to spread throughout the U.S. and around the world. By early March of this year, our management team was holding daily meetings to review this rapidly unfolding situation as well as the guidance coming from federal, state, and local officials. There were many factors to consider as we formulated our response.

Our company was identified by the Department of Homeland Security as one of many operating an Essential Critical Infrastructure Workforce. We wanted to do our part in responding to this crisis, but we were also very concerned for the safety of our team and their families. So we set the priorities that would guide our decision-making – to maintain our business operations providing personalized service to our customers while guarding the safety of our team, their families, and the broader communities in which we work and live.

It quickly became clear in mid-March that the best way to achieve these priorities was to adopt a work-from-home model for a majority of our team. As nearly all staff were office-based, this change would present...Read More.

Transpacific

On the Transpacific Eastbound trade, stronger volumes than expected during Q2 have pushed rates to the highest levels seen in years, especially to US west coast ports. Carriers aggressively blanked sailings for May and June in anticipation of low demand as the pandemic spread. However, US consumers have been surprisingly active and import orders are on the rise. Demand had been outpacing capacity supply to the point that carriers reinstated key sailings over the last few weeks while successfully implementing premium and peak season surcharges for guaranteed loading. Space remains tight and vessels are booked up weeks in advance of sailing.

After several weeks of consistent rate increases, ocean freight levels recently stabilized. This is a sign that supply and demand are well balanced, and it speaks to carriers’ growing discipline with managing rates and loading factors. Carriers are looking to importers for...Read More.
 

Transatlantic, Domestic, and Global Trades

The EU has reopened for business and visitors, and space is a challenge across the board. Blank sailings are causing major space issues in both directions, as are limited passenger air services. Scarce equipment in Europe is also a major factor.

In the US, truck capacity has tightened over the last several weeks, corresponding with the late spring volume increase. There is a still a good deal of PPE moving around the country as well, utilizing road capacity and putting upward pressure on rates.

Blank sailings on transpacific and transatlantic ocean trades are keeping export space very...Read More.

For more information, please contact Rachel Shames, Director, Pricing & Procurement, rshames@cvinternational.com.

On July 1, NAFTA expired and was replaced by the newly ratified USMCA agreement.

Like NAFTA this trade agreement covers the US, Mexico and Canada and provides for the elimination or reduction of duties on many goods produced in and traded among the member nations. In fact, most of the rules remain the same though some important changes have been made. Included in the final rules are enhanced protections for intellectual property rights and more comprehensive obligations to protect the environment.

In an effort to keep this agreement up to date on changing trade issues, USMCA has a 16 year sunset clause and provides for a periodic review every six years. This corrects a perceived problem with NAFTA in that it was difficult to adapt the agreement to meet current trends.

USMCA provides for higher de minimus levels for member’s imports into each country and will address service market as well as trade issues. Most of the rules will become effective immediately upon implementation though the automotive sector will see a "phase in period" for some rules. 

NAFTA country of origin forms ceased to be accepted on July 1 and the new reporting requirements must now be met. There is no specific USMCA form on which the preference claim is to be made. Instead there are 
...Read More.
 
For more information, please contact Sam McClure, Director of Customs & Compliance Services, smcclure@cvinternational.com.

If you are currently benefiting from the Section 301 exclusions please be aware that all of the exclusion sets have an expiration date and that most exclusions are scheduled to expire before the end of the year. This August, most of the exclusions granted to products listed on the very diverse Round 3 of the additional tariffs will expire.

For a complete list of exclusions and their respective expiration dates, visit our "CVI Exclusion Guide". This guide has been updated to reflect all updates (view on desktop for optimal search): Go to CVI's Exclusion Guide 2020.

Our teams at CVI & Capes Shipping Agencies were designated as "essential critical infrastructure workers" by the Department of Homeland Security. During our own adjustments in the office and at home, it was clear how intricate and integral each aspect of the supply chain is. With one piece out of place, the entire chain is affected.

We are so honored our President and CEO, Mike Coleman, has a platform through the Virginia Maritime Association to express our own gratitude towards all maritime workers for their work and sacrifice that gives our communities stability throughout this uncertain time.

"We are sincerely grateful to those risking exposure on the front line of this fight. Among them, but not popularly recognized, are women and men keeping vital medical supplies and other essential goods moving through the maritime supply chain..."

The difference between delivering a critical shipment on time, or not. Like needed parts for a just in time assembly line. Or urgent medical supplies during a pandemic. Or even toilet paper, under stay at home orders. Essential transportation workers and truckers are making it happen during these trying times. At CVI, we know the importance of the "Last Mile" for businesses and consumers alike. That’s why we partner with the best local delivery agents, to make sure there are no surprises on the home stretch for you precious cargo.

For years in the Charlotte region we’ve entrusted local pickup and deliveries to International Consulting Express,“ICE”, like CVI, is a local family owned company. They share our commitment to outstanding customer service, handling every shipment with care, pride and respect for those on the other side of the loading dock. In all the markets we serve, we work with the highest quality first/last mile service providers, like the Moore family and ICE, to deliver on our promises every day.

When you are traveling in NC or SC and see that big CVI logo barreling down the highway, know that CVI and ICE are taking great care of your business. Caring for your cargo…it’s what we do at CVI.

Rachel Hornstein Shames' Market Update was featured in Furniture Today earlier this month. Be sure to visit our website for her weekly market updates.

"...if shippers need more space, which could be the case later this year given modest MQCs and higher demand, then they need to procure it in the spot market, which pays better margins for the carriers,” Shames said. “We could be heading towards a market in the second half of the year where a significant differential exists between long-term fixed ocean contract rates and the spot market."

Capes Shipping Agencies is proud to announce the newest member of our Cargo Forwarding team based in Norfolk, Rachel Upshaw – Assistant Manager Cargo Forwarding
 
Rachel has worked in maritime and supply chain logistics since 2014, holding various support roles and managing cargo movements by rail, truck, and vessel. For the previous three years Rachel has worked as a Freight Forwarder and Import Documentation Specialist for a large maritime logistics firm. Rachel brings broad talent and experience in dry and liquid bulk cargo import and export documentation. She has provided exceptional service and developed relationships with hundreds of shippers while handling thousands of vessels and cargos throughout the US East and Gulf Coasts. Rachel is a member of the Hampton Roads Coal Association, Maryland Coal Association, and the Propeller Club of Norfolk.
 
Rachel holds a Bachelor of Science in Business (Human Resource Management) from Robert Morris University and a Master of Arts (Industrial Labor Relations) from Indiana University of Pennsylvania.
 
Please reach out with any questions or concerns. Thank you.

Pete Hansen
Director of Operations
Capes Shipping Agencies

Container Shipping Tilts Toward New Profitable Future Despite Pandemic (JOC)
The growing frequency of blanked sailings over the past two years was a warm-up to the explosion of calculated capacity reductions this year in response to the COVID-19 crisis ...Read More.

New Autonomous Vessel Could Take Up Duty Guarding Offshore Wind Farms (The Maritime Executive)
The consortium have proposed an autonomous, battery-electric design that would reduce the size and cost of the guard vessel for surveillance of offshore structures like wind farms ...Read More.

NAFTA and the USMCA: Weighing the Impact of North American Trade (Council on Foreign Relations)
Many workers and labor leaders blame trade agreements such as NAFTA for the decline in U.S. manufacturing jobs. The U.S. auto sector lost some 350,000 jobs since 1994—a third of the industry—while Mexican auto sector employment spiked from 120,000 to 550,000 workers. But other economists have emphasized that increased trade produces overall gains for the U.S. ...Read More.

Backlash festers as carriers’ capacity discipline portends profitable 2020 (JOC)
Carriers’ reluctance to add capacity, after being burned badly after failing to remove capacity following the plunge in volumes triggered by the 2008-09 financial crisis, is understandable ...Read More.