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The U.S. National Retail Federation (NRF) and a coalition representing retailers, manufacturers, truckers, transportation intermediaries and other business groups has asked the Federal Maritime Commission to set new policy preventing terminal operators and ocean carriers from charging unfair fees when uncontrollable incidents such as storms and strikes keep cargo from being picked up from ports on time.

“Recent events involving port congestion, labor strife, an ocean carrier bankruptcy, inclement weather and other disruption events have had crippling effects on U.S. ports and the stakeholders who rely on the efficient movement of goods,” the 25-member Coalition for Fair Port Practices said in a petition filed with the commission. During the incidents, storage and use charges have continued “even though shippers, consignees and drayage providers had no control over the events that caused the ports to be inaccessible and prevented them from retrieving their cargo or returning equipment.”

Cargo owners and trucking companies are normally given a certain number of free days to pick up containers of imported goods from ports after they have been unloaded from ships. After that, they can be charged demurrage, a fee intended to ensure that containers are removed quickly and efficiently. In addition, detention and per diem fees can be charged if the cargo containers and chassis used to haul them are not returned within a specified time.

That system was thrown into disarray this fall when the bankruptcy of South Korea’s Hanjin Shipping left cargo owners unable to pick up containers on time and later prevented them from returning containers and chassis, says the NRF.

Delays have also occurred during other port disruptions cited in the petition, including the 2014-2015 labor slowdown at West Coast ports and Hurricane Sandy on the East Coast in 2012.

The coalition said millions of dollars in fees have been charged during such incidents:

  • A retailer was charged $80,000 because it took up to nine days to retrieve containers when only four free days were allowed.
  • A trucking company was charged $1.2 million after long lines at New York and New Jersey ports kept it from returning containers on time.
  • A transportation company was charged $1.25 million after containers it tried to return were turned away at West Coast ports. The amount was eventually reduced to $250,000 but only a year after the company was forced to pay the fees upfront.

“Shippers, consignees and drayage providers do not create and cannot avoid these events,” the group said. “They cannot control the weather. They do not choose the terminals that carriers use. They are not parties to port labor collective bargaining agreements.”

The federal Shipping Act requires that the fees and related practices be “just and reasonable.” The petition asks the FMC to adopt a policy that would require free days to be extended during times of port congestion, weather-related events, port disruptions or delays caused by government actions or requirements beyond the control of the parties picking up or returning containers. Demurrage and similar fees charged during such incidents would be declared “unreasonable.” In some cases, “compensatory” fees could be charged provided that they did not exceed actual storage or equipment use costs. The proposed policy would apply to ocean carriers and marine terminal operators. Source: Maritime Executive

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Authorities on both sides of the US-Mexico border have shut the 10th drug-smuggling tunnel to San Diego in more than a decade, a passageway Mexican authorities on Thursday attributed to the cartel of fugitive kingpin Joaquin “El Chapo” Guzman.

A sophisticated, super tunnel was discovered by federal officials Wednesday night near San Diego, leading to the arrest of 22 people and confiscation of 12 tons of marijuana estimated at $6 million.

The tunnel, originating from the Mexican border city of Tijuana, is about eight football fields in length, with the last quarter-mile crossing US territory before ending beneath a carpet warehouse in the busy Otay Mesa industrial district of San Diego, US and Mexican officials said.

The tunnel was uncovered through intelligence gathered by US federal agents who infiltrated a Mexican drug-smuggling ring during the past six months, according to Laura Duffy, the US Attorney in San Diego.

It marked the 10th subterranean passageway from Mexico to Otay Mesa discovered since 2002. Like those and dozens of others found along the nearly 3 200km border in the last decade, the latest tunnel was equipped with lighting, ventilation and a rail system for moving goods, authorities said.

Two Mexican government security officials, speaking on condition of anonymity, told Reuters the latest passage belonged to the Guzman-led Sinaloa drug cartel.

Duffy said US officials were less certain that Sinaloa was behind the new tunnel, based on the comparatively unfinished, dangerous nature of the tunnel shaft on the US side.

“We usually see ladders going down and staircases,” she said.

“This particular tunnel drops 32 to 35 feet straight down.”

Duffy said US federal agents moved to seize control of the tunnel on its north end on Wednesday after a shipment of 2 tons of marijuana arrived there, and six men were arrested, two of whom were to be arraigned on federal drug-smuggling charges on Thursday.

Mexican agents seized 10 tons of marijuana awaiting shipment through the passage at the Tijuana side, and authorities expect to find more contraband when a thorough search of the tunnel is made, Duffy said.

Guzman, the world’s most wanted drug trafficker, escaped in July from a Mexican maximum-security prison through a mile-long tunnel that surfaced right inside his cell.

His escape sparked a massive manhunt, and Mexico’s government said on Friday that Guzman had suffered injuries to his face and leg after recently beating a hasty retreat from security forces. Source: IOL

USCP Counterfeit stuffThousands of counterfeit designer handbags have been uncovered by federal officers in a shipping container at Miami’s seaport.

Customs and Border Protection officials say a recent review confirmed there were 1,200 fake Gucci handbags and 1,195 Louis Vuitton handbags in the container. The bags were initially seized Aug. 19 in a shipment from China.

Authorities say the handbags are worth more than $1 million if sold as legitimate.

Investigators began examining cartons containing the handbags after noting that they were not declared on any import documents. The shipment included 825 other cartons of clothes, shoes and similar apparel.

Last year CBP seized more than 23,000 counterfeit items nationally worth about $1.2 billion.

Cigarettes+XXX+smokingRampant cigarette smuggling isn’t the problem in New York–“sky-high” tobacco taxes are, according to an op-ed by Patrick M. Gleason, director of state affairs at Americans for Tax Reform, in The Wall Street Journal.

Gleason’s opinion piece, titled “A Laffer Curve for Smokes,” digested here, takes the city and state of New York to task for their $180-million lawsuit against UPS over what officials allege was unlawful delivery of nearly 700,000 cartons of cigarettes. (A Laffer curve, named for economist Arthur Laffer, shows the relationship between rates of taxation and levels of government revenue.)

“This misguided lawsuit demonstrates once again that too many in government do not understand the root cause of cigarette smuggling. New York state levies the highest cigarette tax in the nation, $4.35 per pack, and New York City tacks on an additional $1.50 local tax. All told, the cost of one pack there can run to $12 or more.

“The result? Most of the cigarettes smoked in New York, 58%, are smuggled in from out of state, according to the nonpartisan Tax Foundation. The higher that revenue-hungry politicians raise tobacco taxes, the more profit smugglers can make.

“Politicians never learn. Of the 32 state tobacco tax increases that went into effect between 2009 and 2013, only three met or exceeded revenue projections, according to industry data.

“Lawmakers can claim they’re raising taxes on cigarettes to reduce smoking and improve public health. That talking point is belied by the recent imposition of taxes on electronic cigarettes, which are saving lives by delivering nicotine in puffs of water vapor instead of chemical-filled smoke. There are more than 15 tax bills pending across the country for currently untaxed e-cigarettes. Hawaii is proposing a tax of 80%, New York of 75%, Oregon of 65% and Ohio of 60%.

“For politicians, cigarette taxes are—and have always been—about one thing: money.

“New York state officials claim that the cigarette smuggling via UPS cost the treasury $29.7 million in lost tax revenue. That’s less than 0.03% of the state budget. The $4.7 million allegedly lost by New York City represents less than 0.006% of its budget.

“For a mere rounding error, state and city officials want to grab $180 million from UPS. That’s $180 million UPS could use to hire new workers, give employees raises, or invest back into its business. The leaders of New York and New York City should drop this silly lawsuit and find a more productive use of their time.”

Click here to view the full Wall Street Journal opinion piece.

India_USA-3The U.S. and India have reached an agreement that promises to pave the way toward global implementation of the WTO Trade Facilitation Agreement (TFA). The breakthrough agreement between India and the U.S. should now make it possible for member countries to begin implementing the requirements of the agreement, providing potentially significant financial benefits to businesses trading goods around the world as local customs procedures are streamlined. The target date for ratification of the agreement is 31 July 2015. Upon ratification by two-thirds of the membership, the agreement will enter into force for all WTO states. Member state will then begin the process of adopting conforming legislation.

The Trade Facilitation Agreement

Concluded in December 2013, the TFA is intended to streamline, and to some extent harmonize, customs clearance procedures around the world by imposing new multilateral disciplines on customs procedures in all member countries. The agreement imposes basic globally applicable principles for transparency, due process, and reasonableness in the development and implementation of customs clearance requirements across a broad spectrum of activities related to importing, exporting, and transiting of goods.

The U.S.-India agreement

While the specific details of the bilateral agreement are not publicly available at this time, a press release from the Office of the U.S. Trade Representative states that there are two key elements of the deal:

  • the U.S. and India agree that the multilateral TFA should be implemented without conditions, on the basis of a standard legal instrument for implementing new WTO agreements; and
  • the “peace clause” agreed upon by WTO members in December 2013, under which WTO members will refrain from initiating challenges to certain food security programs under the WTO dispute settlement process, will remain in place “until a permanent solution is found.”

Since announcement of the agreement last December, India has raised concerns that developing countries need greater assurances regarding their ability to maintain government agricultural buying programs and other farm subsidies until an agreement could be reached among WTO members on how to bring such programs into conformity with the body’s trade rules. The U.S. and India had previously disagreed on the form such assurances should take.

Under the new bilateral agreement, the U.S. and India will seek a General Council decision on the two key elements outlined above. A General Council decision will require the consensus of all WTO members. Source: Hogan Lovells International Trade Alert

HSBCAccording to the recently released HSBC Trade Forecast Report, by 2020 India is expected to surge past the United States as the world’s biggest importer of infrastructure goods – a position it is expected to hold until at least 2030. This is a result of the country’s increased demand for materials for infrastructure projects (i.e., metals, minerals, buildings and transport equipment) as it invests more in the building of its civil infrastructure.

The report, which focuses primarily on infrastructure, notes that as Asian economies grow they will take an increasing share of infrastructure-related imports over the next two decades. Currently, the U.S. tops the list of countries importing infrastructure goods, followed by India, Hong Kong, China and Germany. By 2030, India will sit up the top of this list, followed by the U.S., China, Hong Kong and Korea.

Sandeep Uppal, HSBC India Managing Director and Head of Commercial Banking, noted that the “rising middle classes across Asia’s rapidly emerging markets, especially in India and China, will drive significant infrastructure demand in the region.”

“Aspirations of the new middle class and rapid urbanization will force India to upgrade its civil infrastructure, thus pushing up demand for overseas infrastructure related goods,” she added.

To continue with the rising trends, the report further states that Asia as a whole is predicted to see the most rapid growth in merchandise trade between 2020-2030 – led by India, China and Vietnam – at estimated annual export growth rates of more than 10 percent.

For comparison, the export rates of European countries, such as the UK, France and Germany, are forecasted to grow at about 4-5 percent annually on average over this 10-year period. Meanwhile, average export growth in the U.S. is estimated to top off at around 6 percent annually during the same period.

What this means is that by 2030 infrastructure-related goods will be the most commonly traded type of goods, increasing in market share from the current rate of 45 percent of total goods exported to upwards of 54 percent. Source: India Briefing