November 2019

Offices without walls

Being in the global logistics business means our senior executives and managers need to get out of the office regularly to attend important industry and partner meetings. Most recently, we attended two keyevents:

Canadian Society of Customs Brokers (CSCB) National Annual Conference. This year’s event, held in Whistler, British Columbia from October 27-29, was attended by Michael Glionna, President, David Glionna, Vice President – Finance and Mark Glionna, Vice President – Client Relations & Business Development. The conference focused on one major topic – CARM (CBSA Assessment and Revenue Management) – a new initiative that will impact all importers. The vision of CARM is to deliver a globally-leading customs experience that is customer-centric, facilitates legitimate trade, improves compliance and revenue collection and contributes to securing the borders of Canada.

What all importers need to know:

• CARM will be delivered in a phased in approach.
• Release 1 (Fall 2020) allows for basic Portal functionality and payment processing for trade chain partners.
• Importers will set up a Business account on the Portal (based on Business Number RMaccount).
• Importers will delegate authority to their customs broker to manage the clearance and accounting of imported goods.

“Attending the annual CSCB conference and hearing first-hand the latest CBSA initiatives and the accompanying challenges and benefits of full implementation, helps us navigate our clients through the changes” said Mark Glionna.

	Michelle Erickson-Taylor, Connie Erickson, Brent Erickson, John Leis & Nicole Daly at the AAPEX-SEMA trade show.

AAPEX-SEMA Trade Show. John Leis, Director – Client Relations represented Universal Logistics at the 2019 AAPEX-SEMA trade show, held November 3-5 in Las Vegas, Nevada. AAPEX brings together every aspect of the more than $1 trillion global automotive aftermarket industry like no other event.

More than 2,500 exhibiting companies created a dynamic trade show floor with more than 5,500 booths displayingthe latest products, services and technologies for more than 51,000 targeted buyers. Nearly 162,000 aftermarket professionals from 126 countries converged in Las Vegas for AAPEX and the SEMA Show, creating the perfect environment for networking. John enjoyed spending some time with the team of our long standing client, B. Erickson Manufacturing Ltd..

New IMO 2020 Regulations Will Have Drastic
Impact on Shipping Industry

The International Maritime Organization (IMO), in a landmark decision for both the environment and human health, has set January 1, 2020 as the implementation date for a significant reduction in the sulphur content of fuel oil used by ships.

IMO Sulfur 2020 (IMO 2020) calls for a global sulphurlimit of 0.50% m/m (mass/mass). This represents a drastic cut from the 3.5% m/m limit currently in place and demonstrates a clear commitment by the IMO to ensure the shipping industry meets its environmental obligations.

The shipping industry as a whole is one of the greatest contributors to pollution and carbon emissions on the planet: maritime shipping consumes 4.4M barrels of oil per day, accounting for 10% of the oil consumption attributed to the entire transportation sector. Further, international maritime transport is responsible for approximately 5% of global oil demand.

There are three ways to meet the new IMO 2020 standards and compliance will be prohibitively expensive:

Buy cleaner fuel – Ships can make the switch from high-sulfur fuel oil (HSFO) to marine gas oil (MGO). This is the easiest and quickest solution, but will likely lead to an MGO fuel shortage if most carriers choose this option. MGO is approximately 50% more expensive than HSFO.

Install scrubbers – Vessels can continue using HSFO as long as scrubbers are installed to effectively “clean” the emissions before they are released into the atmosphere. However, scrubbers are a patchwork solution based on emerging technology and the industry has yet to create a set of standards. They can take four to six weeks to install and cost between $5-10 million depending on the size of the vessel. Capacity crunch and cost aside, carriers will also have to responsibly dispose of the sludge produced by scrubbers.

Order liquified natural gas ships – Ships that run on liquified natural gas (LNG) will drastically decrease pollutants, however, LNG tanks could also enhance the capacity crunch as they take up almost 3% of a vessel’s TEU slots, whereas scrubbers occupy at most 0.3%. In the long term, LNG ships take years to build and retrofitting current vessels to burn LNG is expensive.

IMO 2020 will have a ripple effect across the shipping industry, the economy, and the environment. Maersk determined that IMO 2020 will cause its yearly fuel costs to top $2 billion (approximately $100-175 per TEU, depending on length of journey), and announced its plans to shift those increased fuel costs onto its customers before the regulations take effect. Other carriers are following suit.

Importers and exporters must plan to absorb increased costs and be ready for potential service disruptions when carriers begin changing their rates as a result of complying with the regulations:

• Carrier costs are expected to increase by 15 to 20%, depending on distance.
• Price volatility and service disruptions are anticipated due to fluctuating fuel prices and reduced carrier capacity.

While IMO 2020 will have negative economic consequences for both carriers and the shipping community, the environmental consequences of not implementing these regulations could be enormous. IMO 2020 is projected to reduce overall sulfur oxide emissions by 85%, which will:

• Reduce the occurrence of lightning storms along trade routes, especially in the Indian Ocean and South China Sea.
• Reduce the occurrence of acid rain, which harms agriculture and crops.
• Reduce respiratory problems and cardiovascular disease in populated port cities and coastal areas.

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

What you need to know about shipping during the holiday season

Shipping during the holiday season is stressful for many importers, however, you can rest easy if you are well informed:

Step 1: Plan Ahead

• Book air shipments at least 5 days in advance of cargo ready date.
• Book ocean shipments at least 4-5 weeks in advance of cargo ready date.

Step 2: Prepare for extra fees

• This is peak season for both air and ocean freight and rates will normally reflect this.
• Congested ports/warehouses may mean longer wait times for truckers, who may assess waiting time fees.
• In the U.S., some ports and rail ramps may experience chassis shortages, which can result in chassis split charges.

Step 3: Be flexible

• Consider choosing a service with a slightly longer transit time. Most times, the faster transit options will be overbooked and your container could be rolled. By choosing an option with slightly longer transit, you may be able to get space and as a result, receive your shipment faster.

Step 4: After holiday lull

• After holiday periods such as Golden Week and Chinese New Year, many of the steamship lines implement “blank” sailings, which means that they cancel a sailing, where either a port is skipped or the entire string is cancelled. This is due to demand for space on vessels plummeting after the holiday rush. Remember that it could take a week or so before carriers’ schedules return back to normal, so plan accordingly.

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

Air freight continues its downward spiral

The International Air Transport Association (IATA) reported that September 2019 was the 11th consecutive month of year-on-year global air freight decline, the longest period since the global financial crisis in 2008.

Demand, measured in freight tonne km (FTKs), decreased by4.5%, while freight capacity rose by 2.1%versus the same period in 2018.

IATA’s Director General and Chief Executive, Alexandre de Juniac, said: “The US-China trade war continues to take its toll on the air cargo industry. October’s pause on tariff hikes between Washington and Beijing is good news but trillions of dollars of trade are already affected, which helped fuel September’s 4.5% fall in demand.”

The current state of the air freight market is volatile and showing some weakness as we enter into the final months of 2019, traditionally air freight’s peak season.

Air freight industry experts’ expectations for the peak season are mixed, with some reporting a slight improvement in demand in recent weeks, but most expecting a modest peak season, one shorter and less heavy and nowhere near the record volumes of 2018.

In short, it’s expected the tough business environment for air cargo will continue into 2020.

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

Time to renew NAFTA Blanket Certificates

Don’t forget to get your Blanket NAFTA Certificates of Origin renewed for 2020. Or simplify your life by taking advantage of our NAFTA Management Service, the fast, easy way to ensure your NAFTACertificates of Origin are fully compliant.

This is important because significant AMPS (Administrative Monetary Penalty System) transactional penalties could apply if you make a claim for preferential treatment without a valid NAFTACertificate.

Get started now by forwarding your 2020 Blanket NAFTA Certificates to nafta@universallogistics.ca or contact Ivy Woo, Manager – Customs Compliance Resources, for more information.

	Largest passenger port in Europe.

Global Spotlight Quiz

Name the largest passenger port in Europe

• This city was founded in the early 5th centuryBC.
• It is the country’s 3rd largest city and 5th largest municipality, located only 6 miles from the country’s capital and largest city.
• The city has attracted huge investments by one of the world’s superpowers, aiming to make it Europe’s number one port and key component of the New Silk Road plan.
• Key transportation hub between the country’s capital and thousands of offshore islands.
• The Trouba district has changed faces many times – it was the commercial center in the early 20th century, then the red light district until the 1970s. Today it’s a little nightlife hub with trendy bars and cafes.
• Sotiros Dios, the pedestrian shopping street, is lined with name brand stores and smaller mom and pop shops.
• Ideal place to visit for fish and seafood lovers, with a great variety of restaurants to choosefrom.
• City of the most successful soccer clubs in the country’s history, founded in 1925 and having won 44 league titles, 27 country cups and four country super cups.

See the answer

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

Quick Tip

Small clerical errors can have big implications

Here are some facts to remember before you complete the documentation that goes with your next shipment:

• Document requirements in the country of origin can be very different than the standards in the country of destination
• 800 documents are used in international transportation
• Some countries will accept copies of documentation, others demand originals

Make sure you do your homework before completing any documentation. Or better still ask us for help (call 905-882-4880, ext. 308 and ask for Debbie McGuire) and remove the risk of making a clerical error that could end up costing you time and money.

	Mila Leon, Customs Operations

At Your Service: Mila Leon,
Customs Operations

Mila Leon joined the Universal Logistics head office Customs Operations team in April 2018, and is currently responsible for the customs clearance of ocean and air shipments.

Mila expanded her professional qualifications by obtaining the Certified Customs Specialist (CCS) designation in October 2019.

Mila can be reached by phone (905) 882-4880, ext. 250 or byemail.