On January 1, 2024, the second stage of the three-year toll adjustment, as per the recommendation of the Panama Canal Authority Board of Directors and approval by the Cabinet Council of the Republic of Panama on July 12, 2022, will come into effect. It is important to highlight that the updated tolls for the passenger vessels category will be implemented on January 1, 2024, following a two-year advance notice to the industry. Details of the approved toll adjustments can be found on the Panama Canal's Published Scheduled Tariffs. 

In response to the ongoing water challenges in the Panama Canal, Danish carrier Maersk has made adjustments to its OC1 service, which operates between Oceania and the Americas. The vessels that previously used the Panama Canal will now bypass it, opting for a land bridge that involves rail transportation across the 80 km stretch of Panama. This modification results in two separate loops, one for the Atlantic and one for the Pacific.

For Pacific vessels, the route involves turning at Balboa, Panama, for cargo exchange between Latin America, North America, Australia, and New Zealand. Meanwhile, Atlantic vessels will turn at Manzanillo, Panama, facilitating cargo exchange between Australia, New Zealand, Latin America, and North America.

Maersk, in an advisory, assures no delays for northbound vessels stopping in Philadelphia and Charleston but cautions about potential delays for southbound vessels.

Shipping companies are grappling with difficult decisions due to attacks on two dozen ships since November, primarily by the Houthi militia in Yemen. The dilemma involves choosing between navigating the risky Red Sea route, with potential attacks and higher insurance costs, or taking a longer, safer voyage around Africa, incurring additional expenses and delays. This situation, described as the "weaponization of global supply chains," could result in higher prices for consumer goods. The disruptions follow recent recovery in global supply chains from pandemic-related challenges and the Suez Canal blockage. Major companies like MSC and Maersk are adjusting routes, and some, including Ikea and Next, anticipate product delays due to avoiding the Suez Canal. Challenges vary among vessel types, with oil tankers largely unaffected while specialized car-carrying ships experience significant disruptions. The Red Sea issues compound existing challenges, such as low water levels in the Panama Canal, prompting longer routes and increased costs for the shipping industry. An analysis by Flexport reveals that over a fifth of global container capacity has diverted from the Suez Canal. The situation emphasizes the importance of risk assessment in navigating volatile regions and protecting life, property, and cargo.

The European Union (EU) is set to implement the third phase of Import Control System 2 (ICS2) on June 3, 2024, extending safety and security data reporting to all transport modes. Earlier this year, similar regulations were enacted for air transportation.

Under ICS2 Release 3, carriers in maritime, inland waterways, road, and rail must provide pre-arrival data on goods. Traders are advised to prepare for this phase by ensuring accurate data collection, updating IT systems, and conducting staff training. A self-conformance test is mandatory for connecting to ICS2.

EU Member States will grant authorization for traders to connect to ICS2 in specific time-limited windows upon request. Failure to comply may result in goods being halted at EU borders.

The European Union officially approved the Implementing Act for Electronic Freight Transport Information (eFTI) on December 19, 2023, marking the initial step toward replacing paper documents with electronic systems. The eFTI Regulation outlines common procedures for accessing and processing eFTI data. Anticipated for full implementation by the end of 2026, the EU's Digital Transport and Trade Facilitation Committee endorsed the regulation after a year of discussions. Recent developments include the European Commission's proposal on October 24, providing specific guidelines for stakeholders, and the allocation of over 28 million euros to the eFTI4EU project for creating a prototype eFTI platform solution.

For more information, visit the official website for the European Union.

Breakbulk and project cargo owners are gearing up for higher shipping costs starting January 1 due to the phased implementation of the European Union's emissions trading system (ETS) on all vessels calling at European ports. Multipurpose and heavy-lift (MPV/HL) and roll-on, roll-off (ro/ro) operators are deliberating whether to incorporate the ETS charge into their freight rates as an "all-in" rate or as a cargo surcharge, similar to a bunker surcharge. The ETS, a tax on fossil fuel use, sets an annual limit on greenhouse gas emissions, requiring carriers to purchase European Union Allowances (EUAs). The phased implementation will cover 40% of emissions in 2024, rising to 70% in 2025 and reaching 100% in 2026.

MPV/HL operators, such as Germany's BBC Chartering and Singapore's AAL, are adopting varying approaches. BBC Chartering offers both an all-in rate and a surcharge, while AAL has already published its ETS surcharge rates for January-March 2024. However, some operators are still evaluating their strategies, considering factors such as fuel emission, consumption, EUA prices, and trade lanes. Calculating EUA costs presents challenges due to varying vessel performance and fluctuating EUA prices. Despite these challenges, MPV/HL operator Coli Shipping & Transport aims to simplify by providing shippers with an all-in rate based on historical data, ensuring transparency and avoiding disputes.

Ro/ro operators, including Wallenius Wilhelmsen, Höegh Autoliners, UECC, and Grimaldi Group, plan to impose surcharges to cover the ETS, diverging from the all-in rate approach. Surcharges will be reviewed quarterly and based on factors like lane meter length or GHG accounting methods. The ETS is expected to incur significant costs, with estimates indicating about $36,600 in additional costs for a 40-day MPV voyage from Shanghai to Antwerp during the first year. As the ETS progresses, costs are projected to increase, reaching $64,000 in 2025 and $92,000 in 2026 for the same voyage. Clarksons estimates that the shipping industry will spend billions on ETS allowances, with $3.3 billion in 2024 rising to $8.2 billion in 2026.

The 484(f) Committee, consisting of the U.S. Census Bureau's Foreign Trade Division, U.S. Customs and Border Protection, and the U.S. International Trade Commission, is responsible for reviewing requests related to changes in the Harmonized Tariff Schedule (HTS) for imports and the Schedule B for exports.

Recently, the 484(f) Committee announced revisions to the HTS and Schedule B, effective January 1, 2024. To view the full list of revisions, visit the USITC website.

The U.S. Trade Representative has actively adjusted measures in the Section 301 investigation regarding China's practices in technology transfer, intellectual property, and innovation. Specific Chinese products were exempted from additional duties. In September 2023, the U.S. Trade Representative decided to extend 352 previously reinstated exclusions and 77 COVID-related exclusions until December 31, 2023. This latest announcement officially confirms the extension of these exclusions for an additional five months, until May 31, 2024. Additionally, the U.S. Trade Representative is proactively opening a public comment docket on January 22, 2024, to collect input on the potential further extension of specific exclusions. It is crucial to note the extension of reinstated and COVID-related product exclusions through May 31, 2024, as detailed in the Federal Register notice.

Starting February 15, 2024, some Section 232 exclusions will be deactivated in the ACE system when the imported quantity reaches 95% of the allocated amount, instead of the previous 100%. This change applies to exclusions for non-quota countries, the European Union (EU) countries under Section 232 steel tariff rate quotas (TRQs), and exclusions for multiple countries facing both Section 232 duties and quotas. Once deactivated, importers can't use these exclusions for new entries and must pay the appropriate Section 232 duties. Importers may file a Post Summary Correction (PSC) for certain exclusions deactivated below 100% to claim remaining amounts and seek a refund of paid Section 232 duties. However, for exclusions valid for multiple countries under both duties and quotas, importers can only file a PSC for Section 232 duty countries or EU steel tariff rate quotas. Other Section 232 exclusions remain subject to the 100% threshold for deactivation, as PSC cannot be used to claim remaining amounts for these.

For more information, visit CBP's Cargo Systems Messaging Service #58942510

Starting January 16, 2024, the U.S. Customs and Border Protection (CBP) will implement a nationwide cargo messaging system to alert filers about potentially noncompliant entry summaries for antidumping and countervailing duties (AD/CVD) while in trade control. CBP specifically targets entry summaries with omitted AD or CVD case numbers and improper use of a company-specific 10-digit AD/CVD case number. The cargo messages are informative, not mandatory, and filers are encouraged to take corrective action during trade control to potentially reduce further CBP intervention. CBP plans to review all entry summaries for AD/CVD compliance and notify filers through cargo messaging when issues are identified. Enforcement actions may be taken by CBP for identified compliance concerns, regardless of cargo message notifications.

For more information, see CSMS # 58721104 - Announcement of Antidumping and Countervailing Duty Cargo Messages.

In a significant ruling, the US Customs and Border Protection (CBP) has prohibited customs brokers from utilizing offshore data entry companies for various trade compliance processes. The decision, based on a request from Heizwerthy Customs & Freight Solutions, states that using unlicensed third-party entities to handle reviews of shipping documents violates US customs laws. This ruling has broader implications, preventing US brokers from employing less expensive offshore labor to reduce operational costs for import entry preparation. The move aims to maintain compliance standards but raises concerns for brokers under competitive pressure to cut costs. For questions or assistance with customs clearances, duty drawbacks, and more, contact Eastern Shipping Worldwide.