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April 2017

News and Views for the clients of Universal Logistics

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Storm clouds ahead for NAFTA?

NAFTA storm clouds

The U.S. is looking for significant changes in NAFTA, based on a letter the Trump administration recently sent to Congress. The specific changes, targeting three key areas of trade, include demands that could be contentious for the other NAFTA members, Canada and Mexico.

Trade in Goods:

  • expand current market access on the broadest possible basis
  • eliminate non-tariff barriers, including permit and licensing barriers, and other trade restrictive measures
  • improve competitive opportunities for textile and apparel exports while addressing U.S. import sensitivities
  • level the playing field on tax treatment


  • improve World Trade Organization trade facilitation commitments, including rules requiring each NAFTA party to conduct customs operations with transparency, efficiency, and predictability and to not apply Customs laws, regulations, decisions, and rulings in a manner that would create unwarranted procedural obstacles to international trade
  • seek terms for cooperative efforts regarding enforcement of Customs rules and related issues, including in the areas of trade in textiles and apparel, agricultural products of concern, and enhanced ability to prevent and address anti-dumping and countervailing duty evasion and transshipment

Rules of Origin:

  • seek rules of origin that ensure NAFTA supports production and jobs in the U.S., procedures for applying these rules, and provisions to address circumvention to ensure that NAFTA preferential duty rates apply only to goods eligible to receive such treatment without creating unnecessary obstacles to trade

Acting U.S. Trade Representative Steven Vaughnsaid changes in NAFTA are necessary to correct “the persistent U.S. deficit in goods trade” with Canada and Mexico and “respond to new 21st century challenges.”An opposing view has been presented by other trade representatives, who say NAFTA has benefited all three countries.

For more information, contact Brian Rowe, Director – Customs Compliance & Regulatory Affairs.

Canadian lumber producers face U.S. duties as high as 24 per cent

The U.S. Department of Commerce has confirmed that duties will be placed on Canadian lumber imports, beginning next week. The duties, ranging from 3 to 24 per cent, are being applied because the U.S. believes Canadian lumber mills are subsidized by the Canadian government.The U.S. Lumber Coalition believes Canada’s timber pricing policies "give Canadian producers an unfair cost advantage that injures U.S. producers and their workers."

Canada has responded directly, with a StatementbyCanada from the Honourable Jim Carr, Minister of Natural Resources and Honourable Chrystia Freeland, Minister of Foreign Affairs. “The Government of Canada disagrees strongly with the U.S. Department of Commerce’s decision to impose an unfair and punitive duty. The accusations are baseless and unfounded.” Ms. Freeland also stated in an interview “…when it comes to defending Canada’s interests, we’re going to playhard”.

The merchandise subject to this investigation is softwood lumber, siding, flooring and certain other coniferous wood (“softwood lumber products”).

The scope includes:

  • Coniferous wood, sawn, or chipped lengthwise, sliced or peeled, whether or not planed, whether or not sanded, or whether or not finger-jointed, of an actual thickness exceeding sixmillimeters.
  • Coniferous wood siding, flooring, and other coniferous wood (other than mouldings and dowel rods), including strips and friezes for parquet flooring, that is continuously shaped (including, but not limited to, tongued, grooved, rebated, chamfered, V-jointed, beaded, molded, rounded) along any of its edges, ends, or faces, whether or not planed, whether or not sanded, or whether or not end-jointed.
  • Coniferous drilled and notched lumber and angle cut lumber.
  • Coniferous lumber stacked on edge and fastened together with nails, whether or not with plywoodsheathing.
  • Components or parts of semi-finished or unassembled finished products made from subject merchandise that would otherwise meet the definition of the scope above.

For more information, contact Brian Rowe, Director – Customs Compliance & Regulatory Affairs.

Alliance formed to provide shipping safeguards

Hanjin Container Ship

Members of THE Alliance have put safeguards in place that kick in when cargo movement is stopped because a member company is insolvent.

THE Alliance members, Hapag-Lloyd, Yang Ming, KLine, MOL and NYK, are reacting to customer complaints about shipping interruptions, following the bankruptcy of Hanjin Shipping, which led to 100 ships, carrying about 500,000 TEUs of cargo with a value of $14 billion, being stranded around theworld.

A representative of THE Alliance said the new agreement gives shippers the "safety net" theyrequested.

For more information, contact Debbie McGuire, Manager – Freight Solutions.

What pending emission standards mean for fleet operators

The predicted impacts of new emission rules for merchant ships – higher operating costs and fuel shortages – could cause shipment disruptions when the new regulations are implemented in 2.5years.

Meeting the new regulations, passed to lower Sulphur emissions, will cost an estimated $60 billion, a huge financial challenge for an industry that is already struggling financially. Fuel shortages are predicted because oil refiners say they do not have enough capacity to produce the required low-Sulphur fuel.

Industry observers are predicting that it will be difficult to tell which carriers have complied with the new regulations, which could lead to some vessels being barred from making deliveries, disruptingshipments.

For more information, contact David Lychek, Manager – Ocean & Air Services.

More questions than answers as UK starts Brexit negotiations

British International Freight Association (BIFA)

It is too soon to predict the exact impact of the UK’s withdrawal from the European Union, says the British International Freight Association (BIFA), the industry group that represents UK freight forwarding companies. BIFA Director Robert Keen says his group will work closely with the UK government to ensurethat

  • import and export trade does not become "overburdened by over-complicated trade procedures"
  • government departments involved in trade are fully aware of the challenges that will exist in the "post-Brexit landscape"

For more information, contact Brian Rowe, Director – Customs Compliance & Regulatory Affairs.

Global Spotlight Quiz
Global Spotlight
An unusual feature of this city’s port is a red, wrought-iron fence, constructed in the 1920s to prevent rampant cargo theft.

Global Spotlight Quiz

What city with more than 50 volcanoes is regularly rated among the most livable places in the world?

You may need a few more clues to name this most unusual city – here they are:

  • This city is a major national gateway that handles 60% of the country’s imports and 30% of the exports.
  • This city is the southernmost capital city in the world.
  • This city has the largest Polynesian population in the world.
  • Known as “The City of Sails”, this city has more boats per capita than anywhere else in the world.
  • The first man to reach the peak of Mount Everest was born in this city.

Click here to see the answer

For more information about freight to/from this city, contact Debbie McGuire, Manager – FreightSolutions.

Quick Tip

Recognize that additional costs in today’s market place may not be avoidable, so incorporate an "allowance" for various surcharges when establishing your costing

AMPS penalties, storage and demurrage fees, waiting time, customs inspections and exams and fumigation charges all have related costs and will not be avoidable 100% of the time.

Leony Bacunana – Customs Operations

Leony Bacunana –
Customs Operations

At Your Service: Leony Bacunana – Customs Operations

Since joining the company in April 1990, Leony Bacunana has always put clients first while holding various positions in our Toronto Head Office.

Leony’s current responsibility is customs release of ocean cargo, a function she handles by drawing on her practical experience and professional training as a Certified Customs Specialist (CCS), a designation she received in 1997.

Leony can be reached by phone (905) 882-4880, ext.209 or by email.

April 2017

is produced monthly for the clients of Universal Logistics. Reader comment and story ideas are welcome. Comments of general interest to all Route readers will, with the permission of the writer, be published. Copyright ©
Universal Logistics Inc. All rights reserved. Reproduction for any commercial use is strictly prohibited.

Route is produced by Universal Logistics. Editor: Bettina Scharnberg. While every effort has been made to ensure the accuracy of information contained herein, Universal Logistics accepts no responsibility or liability for errors or omissions. Written correspondence should be forwarded to:

Universal Logistics Inc.
125 Commerce Valley Drive West
Suite 750, Thornhill, Ontario L3T 7W4
Tel: 905-882-4880 Fax: 905-882-2250
Attention: Bettina Scharnberg
Universal Logistics

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