Archive for the ‘Freight Management’ Category


 

Your Tsawwassen Container Examination Facility Update

tsawwassen container examination facility

Tidewater Container Services Selected To Operate New Examination Facility

In July of 2018 the Vancouver Fraser Port Authority (VFPA) announced they had selected Tidewater Container Services through Harbour Link to be the operator and drayage provider of the newly built Tsawwassen Container Examination Facility (TCEF) located on the Tsawwassen First Nation Lands.

Tidewater Container Services is a wholly owned subsidiary of Harbour Link Container Services. Tidewater will be performing the container and cargo handling services for VFPA related to the examination of containerized cargo by the Canada Border Services Agency (CBSA). Harbour Link provides container drayage and off-dock container terminal services to all sectors of the container shipping community and currently operates a sufferance terminal in Delta, B.C.

Tidewater will be utilizing approximately 50,000 square feet of the TCEF structure to provide commercial warehousing and transloading services.

TCEF Operational Before 2019?

The TCEF is in its final phase of completion. Once complete the VFPA will apply for an Occupancy Permit from the Tsawwassen First Nation and upon receipt of the permit, Tidewater will begin to outfit the facility to make it operational. TCEF is expected to be operational by the end of 2018.

In the November 2017 blog post, The Issues and Solutions of Container Exams at the Port of Vancouver, you learned about the frustrations of the lengthy delays and costs of container exams in Vancouver.

In June of 2018, CBSA provided an update on their website of the Marine Container Examination Process. CBSA reiterated that CBSA is only responsible for the examination of marine containers, but does not control, influence, or charge for the:

  • Movement of containers to and from the CBSA: and
  • Offloading and reloading of containers

CBSA provided the following diagrams:


tsawwassen container examination facility


tsawwassen container examination facility


Tidewater, the facility operator at the TCEF, will generate the fees for presenting the goods for examination, to cover the cost of transportation to and from the examination facility, and for unloading and reloading the container. Tidewater will then bill the shipping line for these costs who will pass the cost to the importer.

Stakeholder Recommendations To Improve Ocean Trade

Recommendations for improvements for Ocean Trade were made at a September 2017 stakeholder conference. The main thread with the recommendations made were to improve the communication between all stakeholders regarding delays, service hours, and service standards.

  • Shipping lines, terminal operators and warehouse operators are required to post standard fees associated with the movement and facilitation of freight through the marine process.
  • Terminal operators need to improve the reservation system for pick up and return of CBSA examined or targeted containers.
  • CBSA needs to provide proof of examination, LSI exam and ventilation timelines to stakeholders.
  • There needs to be a transparent dispute resolution between all stakeholders.
  • Use of technology for real-time status and progress of the exam providing importers and their service providers’ insight to better plan and mitigate impacts of the exam to their business and supply chains.
  • Importers need the flexibility and the option to deliver direct from the exam site.
  • CBSA needs to identify opportunities to improve efficiencies and consistencies with their targeting and examination of container freight. A clear focus on the client is necessary which is transparent with defined and measurable service standards.

The hope is, with the opening of the TCEF, all of the above recommendations from the stakeholders meeting will be put into effect. As of now all the trade community can do is wait and see.

Experts You Can Trust

If you need assistance importing into the U.S., importing into Canada, or Freight Forwarding around the world, contact our experts to help get your goods where they need to go.

Jan Brock | Author

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U.S. Customs To Pilot Test Blockchain Viability

blockchain

In September 2018, U.S. Customs and Border Protection (CBP) will start pilot testing the viability of blockchain technology in international trade. One of the first tests will be to see if they can successfully receive Certifications of Origin to identify if a product can qualify for preferential treatment under the North American Free Trade Agreement (NAFTA).

What is Blockchain?

Blockchain allows for digital information to be shared but not copied. It was originally created for financial transactions however, tech communities are starting to get more creative on what it can be used for. This includes smart contracts, transparent voting for elections, file storage, and in the world of trade, supply chain auditing.

Blockchain acts as a large database spread over a network of many, many computers. By not storing the data in any one location decentralizes the data. By decentralizing the data, it makes it difficult for a “hacker” to corrupt, thus making it a safe way for many people to access the data simultaneously.

Another interesting fact about blockchain is it can be setup to share with the entire public, or only shared with a few selected individuals. This allows for it to be used on massive scales, such as an election, or small scales, such as a one-on-one contract between you and a supplier.

History is another important factor. Blockchain has the ability to collect and maintain all transactions and previous data. In the trade industry this could be vital since records are required to be kept by Customs for multiple years in case of an audit. With a clear history that is accessible at any time, it can make it easier on Customs and the individual or business being audited.

What is Your Commodities Origin?

The goal is to certify the backstories of commodities are genuine. Is your sweater really made in Canada? Is every part from your laptop obtained or produced entirely in Canada, the U.S. or Mexico? Probably not, however with the assistance of blockchain technology and supply chain auditing, the answer could be quick and easy for CBP to discover.

Why This Potentially Helps U.S. Customs?

The reason CBP is excited for the viability of blockchain technology is because it can permanently verify transaction records in a fast and secure way. Being able to work fast and safe is any businesses dream, and CBP wants to start testing the technology in the early stages to make sure they are ready to handle the demand for blockchain technology once more companies adopt the relatively new idea.

How Supply Chain Auditing Can Help You?

It is easy to drown in the science behind blockchain technology, but what matters most to you is blockchain can allow you to do business easier and safer than before. The introduction of Electronic Data Interchange (EDI) has eliminated the need for faxing, mailing or hand delivering paper documents. By having a safe way to transport the same “paper documents” digitally in only a way where you, the sender, and CBP, the receiver, can access it, than business will become better for you.

If You Need An Expert

With pilot testing to begin in September it will be interesting to see what the findings are from CBP. This might be the first step U.S. Customs takes to adopting blockchain technology and electronic supply chain auditing. For the latest in trade news and expert advice feel free to contact an experienced trade advisor to help you navigate the world of trade.

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How To Kick Trade Anxiety Out of Your Business In 4 Steps

Trade

Watching the news these days really takes the gusto out of trade plans. Compared to previous years, trade nowadays seems far more risky. Each day we field calls from worried importers…

“Will there be surtax applied on my goods in the future?”

“Will NAFTA dissolve?”

“I signed a year long commitment to purchase goods that now carry an unreasonable amount of duty. What can I do?”

 

Whether you are currently importing or looking to expand into an international market, you may share these queries. And although there are many questions left to be answered at this time, it does not mean you cannot take action to alleviate some of the uncertainty and accompanying anxiety.

So here are our top 4 tips on how to curb your trade anxiety and forge forward with your trade plans.

Step 1: Arm Yourself With Trade Knowledge

Perhaps step away from the news feed and do some research on what can and cannot happen. Can NAFTA be dissolved overnight? Nope. Is there an existing bilateral trade agreement between Canada and the U.S.? There sure is. However, it is out of date and will take some work to make it current. Can you claim back surtax paid if it is significantly harming your business? Possibly. There are certain criteria to meet, but it is an option. The point here is that you need to understand what options you have, how quickly you need to move and how your company will be impacted if and when the trade winds change. In times of uncertainty, get as certain as you can.

You can seek this council from International Trade Lawyers, who are perfect for large companies or Trade Advisors for small to medium sized businesses. Both will gain an understanding of your questions and lay out the options you have currently as well as bring any potential issues to your attention. Together you can create an action plan for some of the expected outcomes.

Step 2: Research Financing and Other Trade Support Opportunities

There are many opportunities for financial assistance that go unutilized. There are entire government entities that have a sole purpose of facilitating trade by offering support. Here in Canada importers can work with EDC, or Economic Development Canada, who provide risk insurance, financing and working capital assistance to companies wanting to expand internationally.

Recently, the Government of Canada announced a Surtax Remittance process where those companies negatively affected by the imposed surtaxes that came into effect on July 1st, 2018 can apply for a refund. For more information to determine if your company is eligible read our blog Are You Eligible To Request Remission Of Canada’s New U.S. Surtaxes?

The Canadian Trade Commissioner Service is available to all Canadian companies looking to expand into new markets. They will team you up with your own Trade Commissioner who specializes in your industry. This partner will help you map out an export plan and connect you with their extensive list of network contacts across the globe.

Step 3: Spread Your Goods Thin

The advice we give out the most these days is diversify, diversify, diversify. Although it is not the goal, some companies may find themselves in a situation when one of their clients can make or break them financially. This is a dangerous situation to be in, especially if your client is from another country and you are acting as the non-resident importer in order to deliver your goods to their door.

So our advice is to begin seeking additional markets in which to sell your goods. Regardless of the current trade landscape, diversification can create sales stability. However, like all business ventures, it is not without its share of risk. Utilizing organizations such as EDC and the Trade Commissioners Services can help you in this area.

On the flip side, if you find yourself purchasing your goods from one international supplier, now is the time to look for alternatives. If you are locked into a purchasing agreement, speak to your supplier and determine if your long standing relationship can relieve some of the financial impact you may be experiencing from unexpected and increased duty.

Working with a Freight Manager and Trade Advisor can help you source from Countries that may offer preferential duty treatments or have a current Free Trade Agreement in place. A Freight Manager can help you determine the shipping costs from this new location. From there you can calculate your anticipated landed costs from these new locations and compare it to your current costs.

Step 4: Do It Now

Let’s say you are walking down a forest trail when a bear steps on to your path. Hopefully your instinct is to freeze and back away slowly as the experts advise. Reacting to threats in trade should not have the same approach. Do not freeze and back away. Do not even pause to ‘see what plays out’. Act NOW. Buy, sell, trade your heart out because few duties are retroactive (typically only found in antidumping and countervailing cases where companies were found to have been undercutting the domestic market), and they can not tax what is already in the country. So, do not wait, act now.

If you are new to importing internationally, know that the setup process typically only takes a couple of days provided the paperwork is filled out correctly and completely. Working with a Customs Brokers allows for swift business registration and import bond implementation.

Do you have unanswered questions regarding your trade future? Leave us a comment below and one of our experienced Trade Advisors will reach out to you.

Lisa Stevenson

 

 

 

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How The Proposed Tariffs Affect You In The U.S.-China Trade War

China U.S. Trade War Proposed Tariffs

For the second time in July the U.S. government has placed additional tariffs on products exported from China and imported into the U.S.  If the proposed tariffs were actioned, there would be changes for both American and Canadian importers. How will the additional tariffs on Chinese manufactured goods affect trade between the United States and Canada?

The Proposed Tariffs Effect On Canadians

Canada is already in the midst of a trade war with the U.S.  Now Canada is unwittingly affected by the trade war between the U.S. and China because many items proposed for additional tariffs are manufactured in China, exported to Canada and then finally exported into the U.S.  The additional tariffs levied against Chinese goods are applicable to goods manufactured in China without regard to the previous country of export.

Canada has enjoyed a long standing trade partnership with the U.S.  Canadian companies often act as Non-Resident Importers; handling all of the import requirements including payment of duties and taxes. This has allowed Canadians to sell their goods to companies in the U.S. as seamlessly as a U.S. company. This allows Canadian exporters to expand their market beyond the Canadian border.

The third list of tariffs released on July 11th cover consumer goods such as furniture, seafood, automobile parts, televisions and video equipment, which we see our clients from Canada ship on a daily basis.

Even though the trade war is between the U.S. and China, other countries are affected because they, like the U.S., have their goods manufactured in China.

Many of the items on the proposed list such as furniture and seafood, which are normally duty free, will be dutiable at 10% if the proposed tariffs are actioned.

If you are a Canadian company who exports Chinese manufactured products into the U.S. you will need to consider how you will address the increase in cost of exporting to Americans.

The Proposed Tariffs Effect On Americans

Over 75% of the new tariffs target machinery for manufacturing goods, electrical equipment, televisions, recorders, bicycles, bicycle parts, and automobile parts: all merchandise which is in high demand with american consumers. With the U.S. being a consumer based economy, where the consumer is interested in paying the lowest price possible, this new legislation would have an adverse effect on the U.S. economy.

In short order, the increase in costs to bring goods into the U.S. will increase costs for producers, importers and ultimately the consumer. This is never a popular solution, however the U.S. has tried to entice China to come to the table to discuss revising their unfair trade practices.  

The additional tariffs were initiated to combat Chinese regulations that require companies wishing to do business in China partner with a chinese company and share the technology associated with their products leading to violations of both intellectual property rights and World Trade Organization (WTO) rules.

Some economists say that a more appropriate way to combat these unfair trade practices would be to band together with other countries and take their concerns to the WTO to initiate a lawsuit against China.

In the long run, if the two countries can come to a satisfactory solution to the root of the issue the U.S. will benefit greatly and the trade deficit will balance out.

The Proposed Tariffs Affect On U.S. Import Bonds

How will the increased duties affect your import bond? Bond limits are set based on duties, taxes and fees paid in a 12 month period. With the increased duties, higher bond limits may be required. In addition to the higher bond limits, the surety company may request financial documents and collateral to secure the bond.

Your Guide To The Proposed Tariffs

This is a retaliatory move by the U.S. to address concerns of intellectual property rights.

The United States Trade Representative (USTR) will be holding a hearing August 20th-23rd on the impact the proposed tariffs will have if imposed. In order to appear at the hearing, submission must be made before July 27th, which must include a summary of the expected testimony. Written comments can be submitted to the USTR from now until August 17th, 2018.

A decision on if the additional 10% tariff will be imposed or not is expected to be announced at the end of August, after the hearings.

This 10% will be in addition to the already imposed 25% tariff on $34 billion worth of goods from China that came into effect on July 6th, 2018. China retaliates with a reciprocal tariff increase on U.S. commodities imported into China.

How You Can Prepare For The Proposed Tariffs

As a business it is best for you to be proactive in your approach to the impending changes. Contacting a trade professionals for advice on how the proposed legislation could affect your company will provide you with the knowledge to make quick decisions when change inevitably comes.

This includes understanding;

  • What country has the most cost effective solution to source your materials from,
  • Determining your rate of duty if there were changes to the proposed tariffs or NAFTA,
  • Education to make yourself prepared for current practices and future changes, as well as,
  • Freight costs to get your products from your source to you.

All of these services are provided to you by our Trade Advisory experts in Canada and the U.S. Contact us to start a conversation with a Trade Advisor today.

 

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Possible Trade War: U.S. and Canada

 

Canada, the U.S. and Mexico Flags NAFTA

On June 1, 2018, the U.S. committed to a 25% tariff on imports of steel and 10% tariff on aluminum, on the European Union, Canada and Mexico. The tariffs have triggered retaliatory tariffs on U.S. goods and heightened the chance of a trade war.

The U.S. steel industry will initially benefit from the tariff increase through decreased international competition, driving up the price of U.S. steel and therefore the profits. These profits can be reinvested into the steel industry by improving their technologies and potentially providing more job opportunities.

A potential downfall to the tariff increase is retaliatory measures from U.S. trade partners, as is the case with Canada. Canada has announced $16.6 billion in retaliatory tariffs. The Canadian tariffs will go into effect July 1, 2018, and cover a broad range of commodities. Some, mainly unfinished iron and steel products will be hit with a 25% tariff, while others including many consumer products will be hit with a 10% duty.

 

If history repeats itself, trade policy experts warn tariff increases could cause future harm. An example of this was in 2002, when the U.S. enacted a tariff of 8% to 30% on international steel. The increased tariffs set off a chain reaction with the European Union responding with tariffs of its own and a number of countries disputed the tariffs at the World Trade Organization. The WTO ruled the U.S. violated the international trade agreements, and opened the door for sanctions and retaliation. Retaliation by the EU cost many Americans their jobs, and in late 2003 the U.S. Government reversed the sanctions.

Canada’s Stance

The tariffs could cost the Canadian economy over $3 billion a year.  According to the Canadian Steel Producers Association, Canada is the largest supplier of steel and aluminum to the U.S.  Approximately 90% of Canada’s steel is exported to the U.S. The price of steel and aluminum is going to go up as a result of these tariffs and jobs will be lost in Canada. Steel production employs around 22,000 people in Canada concentrated mainly in Ontario. Canada exports around 84% of its aluminum to the U.S., which represents around 8,300 jobs in the aluminum sector with the majority being in Quebec.

Canadian consumers can expect to pay more for products imported from the U.S. that are largely made of steel and aluminum which could apply to anything from cars, refrigerators, canned sodas and beer.

International Stance

China, and the European Union have also responded negatively to the U.S. tariff increases. Brazil contributes 13%, followed by South Korea at 10%, and Mexico at 9%. The original target China only imports 2% of the U.S. steel imports.

Along with fighting the tariffs at the World Trade Organization, European officials have been preparing levies on an estimated $3 billion worth of imported American products in late June. In a joint statement, ministers from France and Germany said the countries would coordinate their response.

Steel and Aluminum Statistics

Below you can see a few interesting statistics on Canada-U.S. cross-border steel and aluminum trade.

  • In 2017, Canada exported nearly $17 billion of steel and aluminum products into the U.S. (Statistics Canada)
  • More than $14 billion of steel crossed the Canada-U.S. border in 2017 (Canadian Steel Producers Association)
  • Canada exported $11.1 billion of aluminum and aluminum articles to the U.S. in 2017 compared to $3.6 billion of imports from the U.S. (Statistics Canada)
  • Close to 45% of Canada’s steel production is exported to the U.S.  Predominantly to Michigan, Ohio, Illinois, and New York.
  • Over 50% of American steel exports go to Canada.
  • Canada sent more than $5.6 billion of primary aluminum exports to the U. S. in 2016. New York, Kentucky, Michigan and Pennsylvania are the top destinations.
  • Between 2000 and 2015, Canada’s share of world aluminum production fell from 10% to 5%. For the U.S. from 15% to 2.7%. While China’s increased from 11% to 55%.
  • U.S. aluminum production fell following the 2008 financial crisis and recession. It was up 6.9% in 2018 from 2017.
  • Canadian aluminum production is down 7.6% for the first two months of 2018 compared to the same time in 2017.

The Beginning of the End for NAFTA?

With the likelyhood of eliminating multilateral trade agreements in favor of bilateral trade agreements. In order to have control over your trade in these uncertain times, you must arm yourself with the knowledge of what your duty rates will be without NAFTA, alternative countries of origin for your imported goods and freight quotations on getting your goods from your new origin to the final destination.

You can talk with our trusted trade advisors to determine your rate of duty without NAFTA. Click here to get in contact with a trade advisory expert today.

Jan Brock | Author

 

 

 

 

 

 

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