January 2023

Air Cargo outlook

The air cargo industry is always subject to a multitude of influences, and the current downturn in demand is a logical consequence of what is affecting consumers globally.  High inflation, high interest rates, high energy costs and concern over job security have compounded to create an air of defensive consumer spending.

While these economic factors are contributing to a downturn in demand, shippers are also returning to ocean transport, as this industry market landscape continues to improve.  The reduced demand has allowed air shippers to benefit from softening rates, a trend that is expected to continue in 2023.

Despite this downturn in demand for air cargo the industry is structurally in a good place, with quality performance in moving perishables, high tech, pharmaceutical and, of course, ecommerce commodities.  At the same time, we expect further capacity increases, as freighter conversions and production deliveries look very buoyant for the next few years.  We can also see the continuing return of passenger operations bringing further belly capacity back to the market.  In fact, at the present time air cargo capacity has recovered to over 90% of the 2019 (pre-COVID) levels.

Speed continues to be the main advantage of shipping by air, followed by meeting customer requirements and reliability.  While many industry experts are not expecting demand to increase quickly in 2023, the overall state of the industry is very strong.  Therefore, despite the downturn in demand, there is some optimism for the coming year, which is good news for everyone.

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

Are you on the list of customs verification priorities?

The latest semi-annual list of verification priorities for the Canada Border Services Agency (CBSA) has been released.

The list is made up of additional rounds for items that have appeared on previous lists:

• LED Lamps (Round 2) – Heading 85.39
• Furniture for non-domestic purposes (Round 4) – Headings 94.01 and 94.03
• Parts of machines and mechanical appliances (Round 2) – Heading 84.79
• Pickled vegetables (Round 5) – Heading 20.01
• Bags (Round 2) – Heading 42.02
• Spent Fowl (Round 2) – Headings 02.07, 16.01 and 16.02
• Cell phone cases (Round 3)  – Headings 39.26, 42.02 and 85.17

When a verification priority has been completed (or additional rounds added due to high levels of non-compliance), the CBSA posts the risk assessment and general verification results.  As an example, see below in regards to the misclassification of Pickled vegetables:

With respect to valuation, there is one continued item:

• Apparel (Round 4) – Chapters 61 and 62

For origin, there are no active verification priorities at this time.

CBSA also maintains a historical verification priorities list, which should be reviewed by all importers as they will likely circle back to these reviews in order to ensure compliance.

The next list of priorities is expected in July 2023.

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

	The city’s iconic suspension bridge is 1.7 miles long and took only 4 years to build.

Global Spotlight Quiz

Name the city known for its iconic bridge

• Before receiving its current name, this city was known as Yerba Buena.
• Known for its steep rolling hills, cable cars and fog named Karl.
• Built on more than 50 hills.
• In 1906, an earthquake and fire destroyed three quarters of the city.
• The Chinese fortune cookie was invented in this city by a Japanese immigrant.
• Levi Strauss invented denim jeans in this city for the Gold Rush miners who needed durable yet comfortable clothing.
• Alcatraz Island is located 1.25 miles offshore from this city.

See the answer

For more information about shipping freight to or from this city, contact Debbie McGuire, Director – Freight Solutions.

Quick Tip

Issue instructions in writing

Always put your requirements in writing to avoid misunderstandings.  What is completely obvious to you may be seen much differently by another person.  Don’t assume your suppliers and/or logistics service providers know what you are thinking (e.g. “Of course I wanted that to go by airfreight…it’s our year end!”).

Eliminate the possibility of errors by clearly communicating your instructions in writing and then having a record in the event things do go wrong.

	Audrey Keser US Customs Operations (Buffalo)

At Your Service: Audrey Keser, US Customs Operations (Buffalo)

Audrey Keser joined Universal Logistics USA in November 2021, handling cross border clearances.  Audrey has extensive knowledge handling all clearances at all ports across the USA.

Audrey can be reached by phone (716) 882-4100, ext. 2602 or by email.

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