This week:

• Asia-USA imports move towards the US West Coast ports as security problems in the Suez Canal and levies in the Panama Canal increase Coastal price differences 
• Jacksonville and surrounding port areas see continued growth, mirrored by growing volumes 
• Retailers predict a strong retail and import season for the start of 2024 after a successful Black Friday 
• US ports urge Congress to pass new legislation that will release funding for needed improvement projects 
• Port of Los Angeles takes first step in construction of a new 80-acre chassis and container yard 

Panama Canal Limits Still Causing Delays for Shippers

Combined with the increase in vessel attacks in the Red Sea, several vessels are now traveling around the Cape of Good Hope, lengthening vessel delays to the US East Coast by as much as one month. The Hapag-Lloyd Asia-Latin America (JCS) and North America-South America West Coast (SWX) services have omitted calls into Kaohsiung, Taiwan, and Buenaventura in Colombia due to not being able to secure passage through the canal.

As of November 1, the number of daily transits through the Panama Canal dropped to 31 from the normal frequency of 40.

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Seasonal Drop in US Trucking Jobs Not Likely to Impact Freight Costs

US trucking employment is set to fall following the seasonal increase in positions for the end-of-year holiday period. Trucking employment rates have fallen by 28,100 jobs since peaking in July, according to non-seasonally adjusted data from the Bureau of Labor Statistics (BLS), with just 3,100 new hires between August and November. 

However, predicting the coming job losses for the first half of 2024 may prove difficult for employers and analysts. Excluding 2020, the average job losses at the beginning of the year totaled 23,000. But if this were to occur in 2024, it would undo job gains going back to 2022. Last Fall’s hiring performance for trucking saw the weakest results since before the pandemic, compared with the 15,300 added in Fall 2021 and 12,400 for 2022. 

The drop may indicate a return to pre-pandemic seasonal patterns, and many carriers may be more likely to hold on to workers through the start of 2024 in preparation for the Spring and Summer seasons to avoid difficulties in hiring new staff later.

CBP Ruling Prohibits US Customs Brokers from Using Offshore Third-Party Companies

A ruling made on December 19 by US Customs and Border Protection (CBP) prohibits US customs brokers from utilizing offshore third-party data entry companies in a wide range of trade compliance processes relating to US imports. 

In the ruling, CBP stated that using an offshore and unlicensed third-party company to handle reviews of shipping documents, such as bills of lading, violated US Customs laws. Brokers who previously reviewed data entry work conducted by offshore companies must now complete that work themselves. The CBP ruling will have a significant effect on brokers’ ability to reduce costs in a competitive market by utilizing cheaper offshore labor. 

A number of complaints have arisen in response to the ruling, such as how automation and data collection from overseas partners should be handled when a US-based broker does not collect this data. Other questions have been raised regarding how importers who typically handle entry generation themselves will be restricted and what they must do to avoid violations. 

What is clear is that shippers need to be aware that brokers need to be using entirely US-domiciled staff and that global trade consultants must be licensed in the US when it comes to import documentation services.

Schedule Reliability Improves in the East-Bound Trans-Pacific Amid Seasonal Import Lull

Trans-Pacific imports to the US East and West Coasts saw improved schedule reliability in November following the seasonal drop in Asian imports. West Coast schedule reliability reached 58.7%, its highest for the year and up 5.3 percentage points from October. East Coast reliability reached 40.3%, an increase of 3.8 percentage points and the highest rate since June. 

Year-over-year, the West Coast was up 18.1 percentage points from 40.6% in November 2022, while the East Coast was up 4.8 percentage points from 35.5% across the same period.

Californian Drayage Operators Allowed to Register Internal Combustion Vehicles in State Registry

Drayage operators in California were facing a deadline on December 31, which would have prevented them from registering any new internal combustion vehicles (ICVs) in the state drayage registry in an effort to transition to zero-emission vehicles (ZEVs). However, in a letter to the California Trucking Association (CTA), the California Air Resources Board (CARB) stated that it will temporarily withdraw this requirement, allowing drayage operators to register ICVs in the new year. 

The temporary withdrawal will last until CARB obtains a waiver from the Environmental Protection Agency (EPA) to implement the state’s Advanced Clean Fleet (ACF) rule, which includes the ZEV drayage requirement. The required EPA waiver is expected to take months, or even a year, providing drayage operators in California with additional time to register ICVs through at least the beginning of the year.