In the March issue of Route we identified the 4 key aspects to registering for CARM (CBSA Assessment and Revenue Management). All importers to Canada (whether resident or non-resident) must take certain steps – if not, they simply won’t be able to import into Canada once CARM Release 2 comes into effect (May/June 2022).
Universal Logistics will help our clients along the road to CARM to ensure a smooth transition. The CARM initiative will be implemented in phases (or releases). Release 1 is scheduled for May 25, 2021.
Here’s what you need to know to get ready…
Identify your company’s Business Account Manager(s) – BAM
Register your business in the CARM Client Portal
Delegate authority to your customs broker
Secure a Release of Goods Bond
Over the coming issues we will provide additional information on each of the 4 steps. Today’s article focuses on identifying your BAM.
In preparation for registering your company in the CARM Client Portal, you will need to establish your internal Business Account Managers.
The role of the Business Account Manager is to manage the business account and all program accounts within the CARM Client Portal for your company. As such, the BAM role provides full access to all functionality of the portal for a business account and all its program accounts. They are responsible for approving any access requests to your account, including internal employees and your customs broker, and for assigning user roles to each new user. The BAM has the unique ability to manage legal entity information and has access to sensitive information, including financial security requirements and CBSA payments.
IMPORTANT – It is recommended each importer assign a minimum of 2 Business Account Managers:
Financial contact – the person who has access to your CRA account and will manage your daily and monthly statements and payments to CBSA;
Operational contact – the person within your organization who interfaces with your customs broker.
Internal identification of your BAM is the stepping stone to registering your account in the CARM Client Portal and must be determined before registration may occur, as the individual who registers the company automatically becomes the company’s BAM.
For more details on CARM and for tips on how to get ready – visit our visit our website or contact your Client Care Rep to discuss how the proper delegation of authority will streamline your import clearance process.
Cost of Suez Canal blockage
Even before the Suez Canal closure at the end of March, logistics networks were struggling to keep up with the COVID-driven demand of last year as well as labour restrictions at key ports, which have reduced productivity at terminals and increased vessel delays.
Exporters in Asia should be prepared for prolonged container shortages, booking delays and an increase in cargo rollovers at key transshipment hubs. As carriers try to catch up with their schedules, the number of blank sailings will also increase.
Once the vessels leaving Suez get to Europe and the U.S., there will be vessel bunching, which will worsen port congestion. Chassis, trucks, rail and barges are going to be under extreme pressure and the flow of containers back to Asia will be delayed.
There is going to be a chronic shortage of containers in China, South East Asia and the Indian subcontinent, especially India, since the carriers prioritize China first in terms of container distribution, then ASEAN (Association of Southeast Asian Nations), India, etc..
Ocean carrier Maersk said that the Suez incident could mean a loss of capacity at “20-30% over multiple weeks, depending on market dynamics”. Based on this, Maersk has suspended spot and short-term contract bookings out of Asia and key trade lanes for the time being.
Major transshipment hubs such as the port of Singapore, already facing congestion and cargo rollovers along with feeder vessels missing connections, will see the situation worsen.
For more information, contact Debbie McGuire, Manager – Freight Solutions.
Demand for international airfreight continues
The demand for international air transport has been steadily increasing since last summer and is showing no signs of slowing down. February air shipment volumes increased 9% compared to the same month in 2019, according to the International Air Transport Association (IATA).
Demand for air transport is so strong that it has returned to elevated levels last seen before the U.S.-China trade war broke out in 2018. Cargo demand is being pulled up by the V-shaped recovery of the global economy and industrial production, roaring e-commerce sales as people spend on goods rather than services, conversion from ocean shipping where transport delays of several weeks are common, and low inventory-to-sales ratios that can mean stock-outs if companies don’t use air for replenishment.
The only thing dampening growth is a lack of capacity related to the severe pullback in international passenger flights. That’s a problem for air cargo shippers because more than half of available transport comes in the lower deck of passenger planes, especially large jets that crisscross oceans. Many cargo owners are experiencing wait times of seven to ten days from the time of booking to acceptance by a carrier because of the shortage of aircraft. The 15% shortfall in cargo capacity from two years ago is directly related to the stunted condition of passenger airlines, resulting in airlines removing half the global fleet from service at the height of the pandemic.
As the fleets return to service, airlines are opting for narrowbody aircraft versus widebody aircraft because of travel constraints. With fewer widebody aircraft available in the near future, cargo capacity for international trade will be compromised. Widebodies have maintained a consistent fleet share of close to 20% over the past decade, but that level is expected to drop in the coming years, which is a concern in terms of moving airfreight. The supply imbalance is also happening despite a 30% increase in freighter capacity. There simply aren’t enough all-cargo aircraft to make up for thousands of lost passenger flights.
Airlines are placing great hope in the busy summer travel season to help restore cash flow, but the level of bookings will depend on the progress of vaccinations and border re-openings. Bookings are robust in the U.S., but very weak in Europe. Industry officials say global standards are needed for digital COVID test and vaccination certificates, as well as governments agreeing to accept certificates digitally.
There are indications some U.S. airlines might be getting more aggressive about adding back international capacity, anticipating a return to foreign travel with the proliferation of vaccines. However, if precedents hold, the advance schedules will likely be reduced the closer they get to departure dates, given how airlines have been managing close-in capacity for the past 12 months. Matching capacity to uncertain demand during COVID is very challenging, but U.S. airlines are getting better at anticipating COVID-19 conditions.
The U.S. domestic airline industry is also moving toward recovery from the pandemic faster than previously estimated according to analysts and executives. Consumer eagerness to travel has some carriers predicting they will soon break even from an operating standpoint and some market analysts saying consensus growth projections are too conservative. It is expected robust leisure travel will pull U.S. operations of domestic airlines back to pre-COVID levels by early 2022, months ahead of predictions made last fall.
While there are positive signs on the horizon, the concern is that corporate and international travel levels are still more than 80% below normal, airlines report, and are not expected to bounce back until at least 2023.
Globally, the airline industry lost $118.5 billion in 2020, with revenues down 40% to $328 billion. IATA projects that core operations won’t become cash-positive for the sector until next year because of new waves of infection in some parts of the world and government travel restrictions.
For more information, contact David Lychek, Manager – Ocean & Air Services.
Truck driver shortage remains a concern
Truck carriers are continuing to struggle to hire drivers and this is not just an issue in Canada. The International Road Transport Union (IRU), an international supply chain group which includes the Canadian Trucking Alliance and the American Trucking Associations as members, reports driver shortages worldwide. They cite recruitment challenges such as an aging workforce, a lack of safe and secure truck parking and struggles to attract youth and women alike as contributing factors to this growing problem.
Data from Trucking HR Canada, a national, non-profit organization promoting modern HR solutions for the trucking and logistics workforce, identified 20,000 unfilled truck driving jobs in Canada during 2020. They are projecting 23,000 vacancies by 2023. Based on about 300,000 truck driving jobs last year, that puts the Canadian vacancy rate at more than 6%.
The IRU surveyed 77 companies from 23 countries between October 2020 and January 2021, and 38% of the participants said a lack of trained drivers was the main cause for the shortage. However, challenging work conditions made worse by the pandemic and trouble attracting women and young people to the job, were also identified as barriers.
IRU reports only 2% of the world’s truck drivers are women. In Canada, 3.5% of truck drivers are women while in the U.S., it is 7.8%.
Truck drivers under 25 make up 5% in Europe and Russia, 6% in Mexico, and 7% in Turkey. The situation in Canada is much more challenging, where a mere 3.4% of truck drivers are under the age of 25.
Ageing trucker drivers are certainly an issue now, as the average age of the world’s truck drivers has reached 50. In Canada, 31% are 55 or older. This average will only continue to increase each year and will get worse without action to reduce minimum driver age.
The IRU is promoting strategies such as lowering the minimum driving age to 18, and investing in safe and secure truck parking areas to fix the current massive global shortfall. It also adds that working conditions will improve when drivers are treated with more respect.
The IRU’s Secretary General, Umberto de Pretto, says, “the driver shortage is a real threat to the functioning of road transport, supply chains, trade, the economy, and ultimately employment and citizens’ welfare. This is not an issue that can wait. Action needs to be taken now. The solutions are there, but if governments do not act now to ease access to the profession, improve working conditions and upskill the workforce, the driver shortage will continue to disrupt and eventually irreparably damage vital supply chains networks.”
For more information about shipping freight to or from this city, contact Debbie McGuire, Manager – Freight Solutions.
Cargo Liability versus Cargo Insurance
Don’t make the mistake of assuming that Cargo Liability and Cargo Insurance are the same thing. They are not. Cargo Liability is the maximum amount of liability a carrier will assume if they are determined to be 100 percent at fault which must be stated on their Bill of Lading. Cargo Insurance is purchased by the shipper for protection against losses resulting from all perils (loss, damage, theft) and can cover more than 100% of the cargo’s value.
Mandy Chan, Freight Solutions
At Your Service: Mandy Chan, Freight Solutions
Mandy Chan has been with Universal Logistics since August 2012, when she first started with our Freight Operations team handling air import shipments. She joined the Freight Solutions team in July 2014, and has since focused on coordinating air and ocean import and export bookings for our clients, as well as PO Management for our key accounts.
Mandy brings a wealth of experience to her role and is committed to client service. She goes above and beyond to ensure our clients’ needs are met and they are kept abreast of any issues that may impact their shipments.
Mandy can be reached by phone (905) 882-4880, ext. 1298 or by email.
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