Gap Between United States, Canada Prices May Always Remain

(The Ledger – Jim Fox)

Canadians have always paid more than Americans for most goods and services and the price “wedge” between the two countries might always be there.

Bank of Canada Governor Mark Carney made that prediction, saying even with efforts to create a uniform North American market with identical tariffs and regulations won’t fully close the gap.  

While the Canadian dollar has been worth more than the U.S. currency for most of this year, shoppers paid an average of 11% more than Americans for the same goods in September, he said.  Testifying before a Senate committee looking into the price gap, Carney said the difference is down from 18% in April.

Among the factors despite currency fluctuations are higher sales taxes (in the double-digit range) and retail labor costs that are about 20% higher in Canada.  Canada has a smaller population, higher transportation costs and economies of scale that allow U.S. retailers to reduce costs, he said. Canadians living close to the border take advantage of price breaks but cross-border shopping is “quite modest” at about two percent of all retail sales, Carney said. Read more here.

Transpacific Box Freight Rates Continue to Rise

(International Freighting Weekly)

Increase in rates a reaction to lines cutting services

Transpacific box freight rates have continued to creep up in the past week. The World Container Index and the Shanghai Containerised Freight Index’s China-US West coast prices have both moved back above $1,500 per day, while Drewry’s Hong Kong-Los Angeles rate has also taken an upward turn.

The WCI reported a transpacific rate of $1,531 per feu, up $77 from the week before. This was a bigger jump than the $6 improvement in the SCFI’s price for this route, which closed at $1,500 per feu. Read more here.

India’s Manufacturing Policy is Wake Up Call for U.S.

(Industry Week – Adrienne Selko)

The threat is that the U.S. does not have its own national policy, says Alliance for American Manufacturing

The new National Manufacturing Policy, announced last week by India, is a strong signal to the U.S. that we “need to get our house in order,” explains Scott Paul, Executive Director of Alliance for American Manufacturing (AAM).

“We missed the boat with China ten years ago and we are still paying the price for that. So let’s make sure that India follows the WTO rules,” Paul says. “Beijing hasn’t fully lived up to its commitments on currency and other trade practices.”

In an effort to make manufacturing a larger percentage of its GDP (it’s now at 16%) and employ 100 million people, the government of India announced last week that it will cut regulatory burdens, create manufacturing zones and promote green technologies. Read more here.

Russia to Sign WTO Deal by Nov 10

(ABS-CBN News – Agence Fance-Presse)

Moscow will sign a Swiss-brokered deal with Georgia removing the last hurdle before Russian membership of the World Trade Organization by November 10, the Georgian foreign minister said.

“We have covered all matters of substance and we are now tackling the technicalities, which will have to be dealt with by November 9,” on the eve of the WTO’s working group on Russia, Sergi Kapanadze said Friday.  “We have a deal with Russia. We are happy that they were eventually able to accept Switzerland’s final proposal,” he told AFP, adding that Georgia would ink the agreement Saturday in Geneva. Read more here.

Business Groups Urge Action Against “Digital Protectionism”

(World Trade Interactive)

A group of business organizations released last week a list of actions the U.S. government should pursue as part of an effort to modernize international rules and practices governing cross-border flows of data and information technologies. A position paper from the group states that “the movement of electronic information across borders is critical to businesses around the world, but the international rules governing flows of digital goods, services, data and infrastructure are incomplete.” As a result, “digital protectionism is a growing threat,” and “a number of countries have already enacted or are pursuing restrictive policies governing the provision of digital commercial and financial services, technology products, or the treatment of information to favor domestic interests over international competition.” Read more here.

FMC Notice U.S. Inland Containerized Cargo Moving through Canadian and Mexican Seaports

(CIFFA eBulletin)

The Federal Maritime Commission is issuing this Notice of Inquiry to solicit the public’s views and information concerning factors that may cause or contribute to the shift of containerized cargo destined for U.S. inland points from U.S. to Canadian and Mexican seaports. Comments are due on or before December 22, 2011. 

The FMC is soliciting comments and information from all members of the interested public, including public port authorities, private marine terminal operators, ocean common carriers, ocean transportation intermediaries, supply chain experts, providers of rail and trucking services, state, local, provincial or national governments, importers, exporters and beneficial cargo owners, on the following issues.

Full detail can be found here.

U.S. Trucking Index Increases

(International Freighting Weekly)

Spike helped by tight capacity control

The U.S. Freight Transport Research’s (FTR) Trucking Conditions Index (TCI) increased by 3.1 points in September bringing the total reading to 9.2.  But the FTR warned that while this marks the eighth straight month of improvements, the TCI is still well below the 13.3 peak back in March. Read more here.

Study Offers Fixes for Border Congestion

(Buffalo News – David Robinson)

Better information about traffic conditions at the border crossings, coupled with improved coordination for local events and increased customs staffing during busy times, would ease congestion at the Buffalo Niagara region’s international bridges, a new study recommends.

The study, expected to be released within two weeks by the Binational Economic and Tourism Alliance, also calls for increased use of new technology to speed border crossings and inspections, as well as increased use of trusted traveler programs.

“It’s really important that we get this right,” said Arlene White, the alliance’s executive director.  “There is no magic bullet here, and we’re all responsible for fixing it,” she said. “We have to pitch in now at the business and community level.”

The economic stakes are high, with the region’s four international bridge crossings ranking as the busiest for passenger traffic and second for truck traffic. An estimated $70 billion in trade crossed the bridges in 2010, down from a peak of $80 billion in 2008. The report said 15% of all trade between New York and Canada crosses the bridges in the Buffalo Niagara region.

But crossing the bridges has become much more complicated because of the heightened security measures that have been put in place since the terrorist attacks on the World Trade Center a decade ago. Read more here.

U.S. Duty Exemption Would Push Down Canadian Prices, Expert Says

(Ellen van Wageningen — Postmedia News)

Exempting Canadians who make same-day shopping trips to the United States from paying duties on their first $200 in purchases will push down prices on this side of the border and help consumers take advantage of the strong loonie, says a University of Toronto expert.

The exemption would be a consumer-friendly way of smoothing the flow of traffic across the border that won’t hurt retailers as much as they claim, said Ambarish Chandra, an assistant professor of business economics. “I don’t think this is something that would lead to a flood of people shopping across the border. All it would do is legitimize something that’s probably already going on.”

He made his case last week to the Senate committee on national finance, which is investigating why prices are often lower in the United States than Canada. Read more here.

Every Container Shipped from Asia to Europe Costs Lines $141

(International Freighting Weekly – Kizzi Nkwocha)

Rising fuel surcharges mean operators lose money, even with rock-bottom rates

Shipping lines are losing a record US$141 for every container they carry to Europe from Asia, as slowing economies continue to take their toll on demand, experts have warned.

Analysts at ACM/GFI, a joint-venture between London-based ACM Shipping and GFI Group, said companies were losing money because of a fuel surcharge of $790 for each container. Read more here.

New EU Traceability Requirements for Food of Animal Origin

(Lexology – Jane Hanney,  Blake Lapthorn)

The EC General Food Law Regulation lays down the general principles and requirements of food law and procedures in matters of food safety. This includes general provisions for traceability which cover all food. These require food business operators at all stages of production, processing and distribution to have in place systems to ensure that businesses are at least able to identify the immediate supplier of their products and the immediate subsequent recipient, with the exception of retailers to final consumers. This information must be made available to enforcement authorities on demand.   

Apart from meeting regulatory demands, the advantages of a traceability system are clear. If a food safety emergency occurs, the food can be traced backwards or forwards through the food chain and, if necessary, enable a rapid and targeted withdrawal and/or recall of products. While internal traceability is not a legal requirement for most foods, it is best practice to have production records that link inputs with outputs. The more traceability information you have, the more targeted and accurate any withdrawal/recall if a food safety incident occurs. This means only those products affected will require withdrawal which will obviously reduce the company’s financial exposure. Read more here.

Good News for Shippers and Importers, as Glut of New Capacity will Keep Ocean Carriage Rates Low for Some Time

(SC Digest)

The large number of ships ordered during better times – many of them of the megaship variety – are likely to continue to overwhelm the pretty strong global growth in container shipping demand for some time, industry analysts say, while noting big drop offs in transpacific volumes.

That's good news for shippers and importers, but will risk real financial troubles for some of the carriers, which are barely breaking even on just operational costs on Asia to Europe routes now, and with only a slightly better landscape from Asia to the North America.

“An excess of capacity on key routes, as well as poor discipline from carriers, means that container shipping lines will not cover their cost of capital in 2011 and many will lose money once again,” said the analysts at Drewry Shipping Consultants, in summarizing its latest quarterly container forecast. “Our new global demand forecast remains fairly positive, at just over 7% growth for this year and despite concern in the western economies, we still see decent volumes in intra-Asia and on emerging trades with Latin America.” Read more here.

TSA Mum on Missing Deadline for 100% Cargo Screening

(NextGov.com – Aliya Sternstein)

Explosives concealed in cargo on international U.S.-bound passenger planes could go undetected, since the Transportation Security Administration has apparently failed, for the second time, to meet a deadline for scanning all parcels on overseas planes, House Democrats warned TSA officials in a letter demanding an explanation.

A year ago, U.S. officials found bomb-making materials hidden in packaged printer parts that were headed from Yemen to the United States. At the time, federal officials acknowledged the Transportation Security Administration was unable to comply with a post-Sept. 11 mandate requiring that 100% of cargo on international inbound passenger planes be screened by August 2010. TSA officials set a new deadline for the end of 2011, partly due to technological challenges. A year later, the agency is reportedly screening only “identified high-risk” parcels and lawmakers are demanding to know if TSA is sidestepping the law, according to the Oct. 31 letter. Read more here.

NAFTA Trade Value Increases 18.3% in August to $80.4bn

(Transport Intelligence – Cathy Roberson)

For the month of August, NAFTA (North American Free Trade Agreement) trade increased 18.3% for a total of $80.4bn compared to same period in 2010. According to the U.S. Bureau of Transportation Statistics, this was only the second time on record that NAFTA trade by land modes exceeded $80bn in one month; the first time was in March 2011. Month-to-month, the value of U.S. surface transportation trade with Canada and Mexico increased 11.1% in August 2011 from July 2011. Read more here.

News from TAHOCO: Weekly Updates

An updated list of recently published US government memorandums, notices, regulations and decisions for the week ending November 4, 2011 is now available on our website here.

MPF Rate Increases by More Than 60%; Customs to Issue Retroactive Bills to October 1

(Peter J. Battaglioli – Katten Muchin Rosenman LLP)

On October 21, President Obama signed into law legislation that increases the Merchandise Processing Fee (MPF) from .21% to .3464% for formal entries. The higher MPF rate is effective for the period of October 1, 2011, to June 30, 2021.   

In order to pay the difference between the old and new MPF rates, U.S. Customs and Border Protection (CBP) will generate bills for October 1, 2011, through the day before the higher rate is implemented electronically via the agency’s Automated Commercial System (ACS) or Automated Commercial Environment (ACE). CBP is not expected to bill any difference in the MPF rate that is less than $20. CBP will also provide one week’s notice before the agency begins to require the higher MPF rate electronically.

The new law did not change the minimum MPF of $25 for formal entries, and the maximum MPF of $485 for formal entries. However, under the new rate schedule a greater number of lower value imports will fall above the minimum assessment, and a greater number of higher value imports will fall above the maximum assessment.

Official Notice from CBP: Merchandise Processing Fee (Class Code 499) System Changes Ready on 11/05/2011

CBP will be ready to accept the new MPF (class code 499) rate of 0.003464 on Saturday, November 5, 2011 at approximately 7:30 am.

The system changes will allow the trade to submit the new MPF rate for summaries that have a duty computation date of 10/01/2011 or later.

System changes regarding this message may be directed to your assigned client representative or to ACS, attention Tony Casucci at anthony.casucci@dhs.gov or 571-468-5053.

Global Ban on Hazardous Waste Exports Moves Forward

(World Trade Interactive)

Nearly 180 countries agreed last month to accelerate a drive to curtail exports of hazardous waste. The United States is not currently one of those involved in this process, but a new federal strategy on electronics recycling could change that.

According to news sources, the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal was amended in 1995 to prohibit all exports of hazardous wastes, including discarded electronic products and obsolete ships, from industrialized nations to developing countries. The ban has effectively lain dormant since then, but under a deal sponsored by Indonesia and Switzerland participants have agreed to allow the ban to take effect when 68 countries ratify it. Fifty-one have already done so, and supporters believe the remaining 17 could come on board within the next three years.

In July the Obama administration released a national strategy for electronics stewardship that includes a number of measures affecting exports of electronic waste, which are all but unregulated at the federal level. Among the steps outlined in the strategy is support for ratification of the Basel Convention, which would enable the U.S. to fully participate in discussions on how this agreement is applied to used electronics and e-waste.

India Traders Appeal Against Congestion Surcharge

(Cargonews Asia)

Representatives of leading chambers of commerce and trade bodies have urged the Chennai Port Trust (ChPT) not to give priority berthing to shipping lines that have collected congestion surcharge since August 15, citing delay in turnaround of vessels, reported The Hindu.

Voicing their protest, the representatives questioned the rationale behind such surcharge and said it was levied even when there was no congestion at the second container terminal.

They said since August 15 shipping lines started levying surcharge of US$75 per TEU and now it was in the range of $200-210 per TEU. It was bound to go up further. The shipping lines had collected about $40.93 million, of which half was collected during October alone. Read more here.

U.S. Canada Border Deal Waits - and Waits - and Waits

(Michael Den Tandt — Postmedia News)

Leaders of both countries seem to be in no hurry to discuss trade initiative

Beyond the Border, a bilateral trade initiative launched with a splash last winter by President Barack Obama and Prime Minister Stephen Harper, is purported to be a thorough sprucing-up of the continental relationship.

Good idea, long overdue. But where is it?

Since summer’s end, economics wonks on both sides of the 49th Parallel – but mainly the northern side – have waited with bated breath for details of the 30-point plan to be formally unveiled. When that didn’t happen by September the substance of the accord was leaked by sources “not authorized to speak publicly on the matter” – code for bureaucrats permitted to speak on background.

The delay in the ceremonial unveiling, it was reported, was due to scheduling: Obama, a busy guy, could not find time to get together with Harper, also busy but perhaps not quite as busy as Obama, what with the world collapsing around him all the time. And so they’d wait until an opportune moment.

The accord, people familiar with its thrust say, is about process: focusing on areas such as baggage pre-clearance, better co-ordination of border enforcement, reducing customs waits for pre-cleared passengers, and the like. There’s nothing to elicit too extreme a meltdown among nationalists; just low-key, important progress on the details of a trading relationship worth $1.7-billion a day, across a border that has become burdensomely “thicker” since 9/11. Read more here.

Higgins Seeks Movement on Peace Bridge Prescreening

(Chris Caya — WNED)

NY Congressman Brian Higgins is trying to speed up plans for easing congestion on the inbound Peace Bridge.

Higgins is asking the Department of Homeland Security and Customs and Border Protection to approve the prescreening of trucks in Canada, which would help eliminate lengthy bridge delays.

The South Buffalo Democrat says every aspect of the region's economy is tied to Southern Ontario, including professional sports teams and low-cost airlines. Read more here.

Just-in-Time Manufacturing Questioned Once More as Thailand Floods Threaten Global Supply Chains

(Transport Intelligence – Cathy Roberson)

For the second time this year, the viability of just-in-time manufacturing is being questioned. First it was the horrific Japanese earthquake and tsunami that caused disruptions in global supply chain. Now it is Thailand, as the country suffers through one of the worst flooding in five decades. The floods began in July, but have steadily worsened throughout October, and are mainly limited to northern and eastern areas around Bangkok. However, these affected areas are home to hundreds of manufacturing facilities that are now completely flooded. The automotive and hard disk drive manufacturing industries appear to be among the hardest industries affected. Read more here.