Founder Tony Nuzio Quoted in Forbes
Read more about Tony’s thoughts on the latest news here;
Read more about Tony’s thoughts on the latest news here;
Over the past several months, Amazon Air has added additional aircraft to its fleet with a goal of increasing its daily schedules in excess of 160 flights a day. Obviously, the main focus will be to utilize these additional aircraft to enhance the Amazon delivery network. However, for years now, Amazon has been planning to grow a global delivery network that would not only enhance the level of service Amazon offers to its Prime customers, but one which would grow to be competitive with FedEx and UPS and even the USPS for that matter.
The good news for shippers is that as Amazon’s global delivery network grows, you can be sure they will be another choice for parcel shippers. How fast this happens is anyone’s guess, but the aspect of growing competition in the parcel arena is certainly good news.
It is quite clear that some importers prefer to purchase goods from overseas suppliers on a Delivery Duty Paid (DDP) basis. Their reasoning is that it is a less complex transaction especially when an importer is not well schooled in import regulations. Their reasoning for taking this course of action is not off the mark, but it also does not get them off the hook when fraud is involved. To put this into perspective, one must understand the full meaning of the Incoterm DDP, which is as follows:
Under the Delivered Duty Paid (DDP) Incoterm rules, the seller assumes all responsibilities and costs for delivering the goods to the named place of destination. The seller must pay both export and import formalities, fees, duties and taxes. … The seller is responsible for all costs and risk until the goods are unloaded.
While this type of transaction seems logical for many importers, we have been advised by one of the nation’s top Customs and International Trade Law firms, Grunfeld, Desiderio, Liebowitz, Silverman & Klestadt, (GDLSL, LLC), that The Department of Justice has announced a False Claims Act settlement with a company who purchased apparel on a delivered duty paid basis (commonly referred to as DDP or LDP). The purchaser, Byer California, admitted to either permitting or turning a blind eye to the fact that the importer from which it purchased the goods was undervaluing the imported garments.
This case highlights the fact that DDP purchasers, or any importers for that matter, are not insulated from liability for customs violations just because they are not the importers of record. DDP purchasers are well advised to implement due diligence programs to ensure that their vendors are accurately declaring their goods to Customs.
So while DDP transactions appear on the surface to be “easier” to transact, importers can and will be held responsible for not performing their necessary due diligence in every import transaction.
This is perhaps another good reason to make sure you are working with professionals who understand international logistics. Work with the international shipping experts, contact us today.
According to a report in Transport Topics, the national average price of a gallon of diesel increased 9.7 cents to $2.973 cents a gallon. This data is reported weekly by the Energy Information Administration and this rise covers the data released by the EIA on Feb. 22.
Some notable facts shippers should be aware of:
Keeping tabs on what’s going on with carrier capacity issues, as well as energy concerns around the world, it is our feeling that we will continue to see these diesel as well as gasoline prices continue to rise. Will we see $4.00 a gallon gasoline soon? There is certainly a good chance of that.
For shippers whose rates include variable diesel fuel surcharges, without any caps on fuel increases within their carrier contracts, get ready to dig deeper and deeper into your pockets.
We have heard from our friends at OEC Group that while traveling from Xiamen to Los Angeles, the Maersk Eindhoven encountered severe weather and possibly experienced engine failure, sending a significant number of containers overboard and damaging containers remaining on board. The full extent of the damage has not yet been confirmed.
OEC has advised their clients that their customer service representatives would reach out to all clients who have been affected by this incident. For those unfortunate shippers who are affected, it is possible that Maersk will not be liable for the damages based on the “Perils of the Sea” exclusion in the Carriage of Goods by Sea Act. This fact may leave uninsured customers with little to no recourse.
This is another example of the need for a full review of all cargo insurance policies as these incidents are becoming way too common.
Here is the latest news on the import ocean freight front as reported by Gene Seroka, the Port of Los Angeles’ Executive Director. As of Wednesday, February 17th, there are Sixty-two vessels at anchor in San Pedro Bay, including 20 container ships destined for the Port of Los Angeles.
“If we do nothing, we will still have vessels at anchor come midsummer,” Seroka said during a press conference Wednesday.
“Under normal conditions, we usually don’t have any container ships at anchor. Before the import surge, we would see 10 to 12 container vessels at berth on a typical day here at the Port of LA. Today we are averaging north of 15 container ships being worked every day. “About 15% of vessels that currently are on their way to Los Angeles are going direct to berth. Of the 85% of ships going to anchor, the average wait time has been climbing. When ships first started backing up in November, anchorage time was about two and a half days. In February thus far, anchorage time is now tracking at eight days.”
The container terminals, trucking companies, rail and warehouses all are “stretched thin,” he said.
“Container dwell time on terminals remains at about five days — or double what it was before the import surge started last summer. Street dwell time — waiting for warehouse space — is now at 7.6 days for a traditional 40-foot container,” Seroka said. “We need to get back to about three and a half days of on-street dwell time, where it was holding pre-import surge.”
A number of factors have contributed to the San Pedro Bay congestion, he said.
“It’s a pandemic-driven buying surge unlike one that we’ve ever seen from the American consumer. Most of us are not spending money on services. We’re not going to movies, taking airplane flights or going to ballgames. We’re spending money on tangible goods. And that’s what’s really driving this unprecedented surge in imports.
“Because of COVID-19, not all of our workers are on deck every day. That too has an impact,” he continued.
COVID-19 has had a big impact at the port, with a major outbreak in the San Pedro Bay complex reported last month. Currently, the Port of LA has “about 800 dockworkers off the job out of 15,000 due to COVID-related illness or otherwise being quarantined at this juncture. We need to get vaccines to these folks,” Seroka said.
“We are pleased that the vaccines are slowly starting to get into the arms of longshore workers,” he said, advocating for widespread vaccinations throughout the port community. “There are 15,000 longshore men and women on the job and another 80,000 to 85,000 in the truck industry, electricians, retail warehousing and so many others, including our marine terminal operators, who work on our docks every day, and we need to get vaccines for all of them. The Port of Los Angeles is ready to assist with a mass vaccination site at our cruise terminal as supplies of the vaccine and inventories become available.”
“If we stopped all shipments right now, we’d still have about a month’s worth of work with those ships at anchor to get through the system. So three things need to happen immediately. No. 1, we have got to get our workers vaccinated so we can have maximum capacity out on the job and the docks, the warehouses and our truck and rail community. Second, we’ve got to implore our importers to do their very best at emptying these containers once they arrive, picking them up quickly and returning them back to the port area so we get that round-trip cycle going. And again, not very popular, but we’ve already been in discussion with industry folks to see if we can meter cargo to help us dig out of this backlog. There have been several services that have been switched so far — temporarily — that will come back to us at Los Angeles, but we really need to catch our breath and go after this backlog of anchored ships with renewed enthusiasm.”
“It’s not a popular decision. It’s a very difficult one. I am not an individual who wants to turn a pound of freight away from our port. But with 62 ships at anchor, we’ve got to do something different, and all parts of the supply chain have a role to play in this,” Seroka said, pointing out that sending container ships to the Port of Oakland, for instance, “will allow us a little bit of time to dig out.”
With the help of other gateways, the ocean carriers and the container terminals, the Port of LA is “trying to chip away at this backlog and bring a level of certainty back to the port conveyance process,” he said.
“We will do everything we can to make sure that this [metering of cargo] is temporary, but the American economy has to keep moving,” Seroka said. “We’ll welcome these companies back to Los Angeles as soon as we all deem fit from a logistics arena.”
Need help understanding international shipping trends and changes? Contact us today to learn more.