Single Window Initiative (SWI) becomes
mandatory August 17, 2020
The Canada Border Services Agency (CBSA) has announced that the Single Window Initiative (SWI), scheduled to become mandatory as of April 1, 2020 but delayed due to the COVID-19 pandemic, will become effective August 17, 2020.
As of this date, the existing OGD PARS and RMD service options will be decommissioned and any import declarations submitted via OGD PARS and RMD will be rejected.
CBSA created the SWI in order to electronically communicate with Participating Government Agencies (PGAs) to better identify goods with import requirements, and exchange that information with the PGA at time of release.
Universal Logistics has continued to use SWI for all PGA release requests since October 2018, however, because the program was not mandatory during that period CBSA did not require complete information for all areas. Effective August 17, 2020 importers will be required to provide all required information at time of import.
As noted in our February 2020 issue of Route, additional fees will be implemented once SWI becomes mandatory.
For more information, contact Brian Rowe, Director – Customs Compliance & Regulatory Affairs.
Air, Ocean & Truck Freight Updates
The Coronavirus (COVID-19) pandemic continues to impact the entire logistics industry, and the situation going forward is still rapidly changing and uncertain. The daily articles in the logistics trade media often contain conflicting points of view which underscores how difficult it is to accurately forecast when things will return to “normal”, i.e. Pre-Coronavirus.
To get a clearer picture, we have turned to Universal’s operational specialists for their insights on what they are actually experiencing in their day to day handling of air, ocean and truck freight shipments.
The Ocean Freight team has been immersed in tackling the many challenges caused by COVID-19, with its impact on shipping schedules, cancelled sailings and port operations. The overall view is the reliability of ocean carriers service has suffered and deteriorated.
The lack of available space on the Asia, Europe and India to North America lanes has been a big issue, with the main cause being “blank sailings”. China’s rapid economic recovery from the outbreak took carriers by surprise. They had overestimated the number of “blank sailings” needed, which caused a real shortage in available space on vessels. Even when the carriers do provide space, they often “roll over” bookings at the last moment to the following week’s vessel sailing. Some carriers are even offering “roll over protection” by adding an additional $750.00 USD on top of rates. Many in the industry consider this to be taking unfair advantage of a situation that was created by the carriers’ own supply and demand issues.
However, sharp swings in container freight rates are likely to continue this quarter as shipping companies struggle to gauge demand amid an uneven global recovery from the Coronavirus. The cost to ship containers slumped earlier this year as the pandemic lowered demand, with rates bottoming out in late April. Rates have rebounded steadily with economic activity through May, but then jumped 20% in June as carriers removed capacity from the market. In addition, the rates on the Asia trade lane have increased dramatically due to implementation of a July General Rate Increase (GRI).
Many industry experts believe volatile ocean freight capacity is likely to continue for some months. They expect ocean freight carriers to continue their practice of tactical sailing cancellations for the foreseeable future due to the still uncertain and risky outlook for trade and the global shipping network.
We are presently starting to see an increase in volumes from clients who have not shipped in the past few months, especially in regards to imports from Europe and Asia.
While we are hopeful that carriers will start to add more capacity to the market during the next quarter, we are recommending that clients extend their normal order lead times to account for the potential of vessel sailing delays.
At the start of COVID-19, passenger flights came to a complete standstill. This greatly affected the ability to ship via air, as most air cargo moves in the belly space of passenger aircraft. The combination of no passenger flights and the limited option of airlines operating freighters (all cargo aircraft) made it a big challenge to ship by airfreight.
Although some airlines converted their passenger aircraft to carry air cargo, many airlines just ended their service. With reduced capacity for air freight shipments, rates soared.
The first six months of 2020, have been described as the craziest half year in air cargo, with recent studies indicating the average price of transporting one kilogram by air rose by an average of 48% worldwide.
Due to the sudden need for Personal Protection Equipment (PPE), airfreight rates from China rose an incredible 136% compared to the first half of 2019.
Air Canada’s worldwide flight routes were greatly reduced and they eliminated their standard service. All shipments moved on Air Canada’s priority service at very high rates. WestJet and Air Transat stopped their service altogether, along with most of the international air carriers. It became very difficult to get reliable bookings and the service was inconsistent, as carriers would wait until the space on their aircraft was filled and if not, the flight would be cancelled.
While economic activity is restarting after major lockdown disruptions, there has not been a major boost in demand and the rush to ship PPE has subsided as supply chains normalize. General commodities are starting to come back into the airfreight market, as on hand inventories are starting to deplete. However, the capacity crunch continues because passenger operations are recovering very slowly. There is still very little passenger travel, which keeps bellies out of action and belly capacity for international air cargo in June was down 70% over last year.
Air Canada’s standard service and rates started to be available in June. WestJet and Air Transat started flights again in July with limited services.
While the rates have come down slightly from their high points, they will probably never return to pre-Coronavirus levels. There is also still a bit of instability, as most air carriers are not offering rates on a fixed period basis and only quote using spot pricing. In addition, air carriers are implementing emergency handling COVID-19 surcharges on a per shipment basis as a means to mitigate the significant impact of the Coronavirus on the airline industry.
Rates are expected to rise again as the capacity crunch continues due to the slow recovery of passenger operations until passengers feel safe to travel again. Another concern with available capacity would be the arrival of a second COVID wave and another surge in need for PPE. There are also growing concerns that if a vaccine for COVID-19 is found, airfreight demand will soar beyond all capacity availability.
With airfreight rates being so high and capacity still lacking, we are advising clients to consider ocean freight as a viable option. Even though the transit time is longer, pricing compared to airfreight is making it a very attractive alternative.
For more information, contact David Lychek, Manager – Ocean & Air Services or Veena Ramesh, Team Leader – Airfreight Services.
Our North American Truck Services team noted that rates took a dive at the beginning of the Coronavirus pandemic, as few shippers were open and truck carriers were willing to lower rates in order to secure business.
At the onset of COVID-19, service was never a concern nor an issue, as we were able to utilize our preferred and most reliable carriers to handle the less than usual shipment volumes.
As business gradually picked up, there was not a significant increase in carrier rates and, thankfully, service levels were not affected.
As more and more businesses begin to reopen, increased demand for equipment could cause a rise in rates. We still believe carriers will be cautious regarding rate increases, as there is much uncertainty about when we will return to pre-pandemic levels.
All signs point to an improved business environment for the Truck Services team, however, a lot will depend on how quickly the U.S. can eliminate the effects the pandemic is having on business in general south of the border.
Truck carriers are hoping for a quick return to “business as usual”, but it is evident that it will be a gradual process that will require a concerted effort by all members of the supply chain working together to turn things around.
Summer and early fall are usually the strongest times of the year in terms of volume of truck shipments, so it will be an important time to gauge whether things have returned to “normal”.
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.
New to the list is LED lamps, Heading 85.39, which was added as a verification priority in May 2020:
The list also includes many items that have appeared on previous lists:
Disposable and Protective Gloves, Subheadings 3926.20 and 4015.19
Furniture for non-domestic purposes, Headings 94.01 and 94.03
Parts of machines and mechanical appliances, Heading 84.79
Pickled vegetables, Heading 20.01
Safety headgear, Subheading 6506.10
Spent Fowl, Headings 02.07, 16.01 and 16.02
Chapters 2 and 4 remain on the tariff classification list for Import Permit Numbers. The risk identified is that imported goods could be classified under “within access commitment” tariff items within Chapter 2 (meat of bovine animals and poultry) and Chapter 4 (dairy products), without the required import permit number on the declaration.
With respect to valuation, there are two continued items:
Apparel, Chapters 61 and 62
Footwear, Chapter 64
For origin, there is one continued item:
Bedding and Drapery, Headings 63.01, 63.02 and 63.03
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.
Both the current and historical items contain information as to the risk assessment and results of the verification priority. As an example, following are the results of the 2018 Olive Oil verifications:
The next list of priorities is expected in January 2021.
For more information, contact Brian Rowe, Director – Customs Compliance & Regulatory Affairs.
Battle to eradicate Asian long horned beetle deemed
successful in Toronto & Mississauga
Asian long horned beetle
The Canadian Federal government recently announced that the Asian long horned beetle (ALHB), which attacks and kills healthy broadleaf trees such as maple, poplar, birch and willow, has been eradicated in Toronto and Mississauga. This was the only known population in Canada, and an eradication is declared when a pest is not detected for five years.
This insect is native to Asia and was introduced to North America in the 1990s through untreated wooden shipping material such as pallets, crates and boxes. Once in a new environment, the ALHB can disperse naturally or spread long distance through transport of infested wood products, including firewood and logs.
To prevent the spread, the Canadian Food Inspection Agency (CFIA) established a regulated area within the cities of Mississauga and Toronto that restricted the movement of nursery stock, trees, lumber, wood and wood products, including all firewood, unless given prior authorization. Combined with a promotional campaign creating awareness about the movement of firewood, CFIA, with the help of residents and businesses, were successful in eradicating this destructive invasive species.
Long established import regulations regarding the shipping of wooden shipping material, have also helped prevent further infestation from overseas origin points.
For more information, contact David Lychek, Manager – Ocean & Air Services.
There are more bikes than
in this mystery city.
Global Spotlight Quiz
Name the city that has more bridges than Venice
There are over 2,500 houseboats in this city.
This city has 7 famous leaning houses in a row called the Dancing Houses.
This city has 165 canals that combine for a length of over 100 kilometers. The Canal Ring became part of the UNESCO World Heritage list in 2010.
Claude Monet painted the South Church during a visit to this city.
Over 85% of this city’s residents speak more than 1 language.
This city’s residents are the 2nd largest consumers of coffee in the world.
For more information about shipping freight to or from this city, contact Debbie McGuire, Manager – Freight Solutions.
By controlling your freight, you can choose the best routing and service level for your business
Time critical? If saving time saves you money, ensure your freight is moving on the fastest route available.
Cost the issue? Deferred services offer good savings.
Different carriers offer various service options, ranging from “no frills” to “executive treatment.”
Choose what works best for you.
At Your Service: Marina Mescerjakova, Ocean Services Exports
Ocean Services Exports
Marina Mescerjakova has been part of the Universal Logistics team since 2007, with her main focus on the coordination of ocean exports.
Marina’s industry knowledge of Canadian ocean export processes is second to none, which allows our clients to rest easy, knowing their shipments are being handled by a top calibre individual. This is especially important given the times we are in, as Marina’s skills and knowledge come to the forefront, ensuring our clients’ needs are met.
Marina can be reached by phone (905) 882-4880, ext. 1240 or by email.
Route is produced by Universal Logistics. Editor: Bettina Scharnberg. Email: email@example.com 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
News and Views for the
clients of Universal Logistics