How U.S. Logistics is Handling Record High Imports

The U.S. logistics sector is currently at a critical juncture, confronting near-record levels of imports that are testing the capacity and efficiency of the supply chain. This surge in imports, unprecedented in recent years, is propelled by robust consumer spending and strategic inventory accumulation by retailers, anticipating a sustained high demand. Over the coming months, key U.S. ports are expected to manage monthly import volumes that exceed 2 million TEU—a scenario that could extend for more than half a year​

This influx has reignited concerns about potential bottlenecks, particularly in critical areas such as rail systems and ports. These challenges are not new; they echo the severe logistical congestion experienced during 2021/22 when the infrastructure was swamped by unexpected volume increases. Although there has been some progress since those peak crisis years, problems such as rail delays and inefficient drayage operations at various ports persist and may worsen given the current volume of imports​.

The current circumstances underscore the importance of enhanced planning and the deployment of advanced technology to improve visibility and response capabilities within the supply chain. Shippers are being advised to prepare alternative plans and consider different routing options to avoid delays and disruptions, ensuring smoother operations despite the high traffic​.

Amid these challenges, Future Forwarding emerges as a pivotal partner for businesses seeking efficient logistics solutions. By integrating sophisticated technology for improved supply chain oversight and crafting detailed contingency strategies, Future Forwarding ensures that your business can adapt to and manage the demands of increased global trade flows effectively. For businesses aiming to optimize their supply chain strategies in these turbulent times, engaging with Future Forwarding means accessing tailored, efficient logistics solutions that prioritize your operational needs.

Explore how Future Forwarding can assist your business in managing the current surge in imports and prepare for future logistics challenges by visiting our website at Future Forwarding. Let us help you enhance your supply chain resilience and operational efficiency in this dynamic global market.

 

Section 301 Exclusions Set to Expire

In 2018, the U.S. Trade Representative (USTR) invoked Section 301 of the Trade Act of 1974 to address China’s unfair trade practices related to technology transfer, intellectual property, and innovation. This led to a series of tariff increases on two-thirds of U.S. imports from China. To mitigate potential harm, the USTR introduced a policy allowing stakeholders to request “tariff exclusions.” While this process has been met with both support and skepticism, it remains a crucial aspect of U.S.-China trade relations.

Challenges and Concerns

Despite the USTR’s efforts to address concerns about the negative impact of tariffs, challenges persist. Some Members of Congress question the USTR’s discretion in granting or denying exclusion requests, raising doubts about the effectiveness of this approach. These concerns became particularly pronounced in the wake of the COVID-19 pandemic, which disrupted supply chains and heightened the need for certain products. However, others argue against exclusions, fearing that they may undermine the overall efficacy of Section 301 or hinder efforts to encourage domestic manufacturing of critical goods.

Biden Administration’s Approach

The Biden Administration, continuing the review of its trade strategy for China, has not aimed at broader tariff relief. Instead, actions in 2021 and 2022 focused on extending exclusions related to medical supplies essential in combating the pandemic.

Background and Exclusion Process

The USTR’s Section 301 investigation identified four key areas justifying U.S. action against China. In response to stakeholder concerns during the tariff increase proposals, the USTR established a tariff exclusion process, allowing interested parties to request exemptions for specific imports. The criteria for granting exclusions include considerations such as product availability from non-Chinese sources, economic harm to importers or U.S. interests, and strategic importance to Chinese industrial programs.

As of January 2020, the USTR received 52,746 exclusion requests, with a 13% approval rate. Exclusions covered 99 tariff subheadings and 2,129 product descriptions, providing relief for certain importers.

COVID-19 and Medical-Care Products

The USTR’s response to the COVID-19 pandemic saw a prioritization of exclusion requests for medical products in short supply. Exclusions on COVID-19 response products have been extended multiple times, demonstrating a commitment to addressing urgent needs.

Reinstating Previous Tariff Exclusions

In October 2021, the USTR sought comments on reinstating 549 expired or expiring exclusions. In March 2022, it announced the reinstatement of 352 eligible exclusions, subsequently extending them through September 2023. Importers may file claims for tariff refunds for products covered by these exclusions.

Four-Year Review Process

The USTR initiated a four-year review in May 2022, considering the effectiveness and impact of Section 301 actions. The agency expected to conclude the review in the fall of 2023, maintaining actions in place while leaving room for potential modifications. Two extensions were granted during that time, but USTR Tai is expected to make recommendations whether to renew again or allow them to expire. 

Issues for Congress

Congress and the USTR face the task of addressing issues surrounding Section 301, with some members proposing amendments to Title III of the Trade Act of 1974. The ongoing dialogue involves discussions on recalibrating tariffs, aligning them with strategic priorities, or maintaining them for negotiation leverage.

The exclusions are set to expire 12/31/2023 and if another extension isn’t passed, the tariffs will return 1/1/2024.

Importers navigating the complex landscape of Section 301 tariff exclusions should partner with a trusted logistics expert. Future Forwarding, with our commitment to staying current on the latest policies and our team of expert staff, is well-equipped to guide businesses through the evolving policies and processes. As uncertainties loom over potential tariff changes in 2024, having a strategic logistics partner becomes essential for informed decision-making and proactive risk management. Reach out to us today to find out more.

Preparing for Lacey Act Phase VII: Your Guide to Ensured Compliance and Sustainable Trade

The Lacey Act, originally enacted in 1900 to combat bird poaching, has evolved significantly over the years. In 2008, the Farm Bill brought substantial amendments to the Act, extending its protections to a broader range of plants and plant products. These amendments aimed to tackle issues like illegal logging and the unlawful harvesting of wild plants, which are often linked to terrorism, deforestation, political instability, and illegal trade. Today, the Lacey Act plays a crucial role in safeguarding forests, wildlife, and people globally by regulating the importation of certain plants and plant products into the United States.

What Is the Lacey Act?

The Lacey Act requires importers to submit a Lacey Act declaration when importing certain plants and plant products into the United States. This declaration is essential for ensuring that imported plant materials have been legally harvested and traded. The declaration must include detailed information, such as the scientific name of the plant, the importation’s value, quantity, and the country of origin.

Over the years, the Act has undergone several phases of implementation. The most recent development is Phase VII, set to roll out soon. This phase will expand the list of materials and plant products that require Lacey Act declarations, impacting a wide array of imported items like furniture, essential oils, and cork, which have not previously needed such declarations.

Preparing for Phase VII

The U.S. Department of Agriculture’s Animal and Plant Health Inspection Service (APHIS) will soon announce the schedule for Phase VII of Lacey Act declaration implementation. To prepare for these changes, here’s what importers need to do:

  • Know Your Supply Chain: Familiarize yourself with your supply chain for each piece of plant material in the product you import. Ensure that the materials have been legally sourced and documented.
  • Learn How to File a Declaration: Understand the process of filing a Lacey Act declaration. This can be done electronically through the Automated Commercial Environment (ACE) or the Lacey Act Web Governance System (LAWGS). Review the guidelines provided by APHIS to ensure a smooth declaration process.
  • Read Frequently Asked Questions: Explore the frequently asked questions (FAQs) provided by APHIS to clarify any doubts you may have about Lacey Act compliance.
  • Stay Connected: Stay updated on the latest developments and announcements related to the Lacey Act by keeping in touch with APHIS through their official channels.

Who Needs a Lacey Act Declaration?

If you import items containing plant products and your products fall under specific Harmonized Tariff Schedule (HTS) codes listed on APHIS’ Implementation Schedule, you are required to submit a Lacey Act declaration. However, there are exceptions, and you may not need a declaration if your product meets certain criteria:

  • Common Cultivars, except trees
  • Common food crops
  • Scientific specimens of plant genetic material used solely for laboratory or field research
  • Plants that will remain planted or will be replanted
  • Packaging materials, such as wood crating, pallets, cardboard boxes, and packing paper (unless the packaging material itself is the imported item)
  • Plant material representing no more than 5 percent of the total weight of the individual product unit, provided it does not exceed 2.9 kilograms for entries within the same 10-digit tariff provision

Penalties for Non-Compliance

Compliance with the Lacey Act is crucial, as non-compliance can result in civil or criminal penalties. Civil penalties can range up to $250 for violations, while criminal penalties can be much more severe, including imprisonment for up to five years and substantial fines.

The Lacey Act plays a vital role in protecting forests, wildlife, and the environment from illegal trade and exploitation. As Phase VII approaches, importers must prepare to comply with the expanded declaration requirements. By understanding the Lacey Act’s provisions, knowing your supply chain, and staying informed, you can ensure a smooth transition, contribute to the preservation of our planet’s natural resources, and keep your cargo moving.

If you have any questions, feel free to reach out and let us guide you

 

Understanding MoCRA: A Guide to the Modernized Cosmetics Regulation Act of 2022

In the ever-evolving world of cosmetics, ensuring consumer safety and regulatory compliance is of paramount importance. Recognizing the need for modernization, the Modernization of Cosmetics Regulation Act of 2022 (MoCRA) has ushered in significant changes to the regulatory landscape governing cosmetic products in the United States. Aimed at enhancing safety, transparency, and oversight, MoCRA replaces outdated regulations from 1938 and introduces a range of new requirements that impact manufacturers and importers alike. In this blog, we will delve into the key updates brought about by MoCRA, providing valuable insights to beauty manufacturers and importers regarding compliance and industry best practices.

 

Under MoCRA, cosmetic facilities must register with the US Food and Drug Administration (FDA) and renew their registrations every two years. The registration requirement applies to establishments involved in manufacturing or processing cosmetic products distributed in the United States. Existing facilities have until December 29, 2023, to complete their registrations, while new facilities must register within 60 days of commencing manufacturing operations. It is crucial for facilities to initiate the registration process early to account for any unforeseen issues or potential delays from the FDA.

 

The FDA holds the authority to suspend a facility’s registration if it determines that a product manufactured or processed by the facility poses a reasonable probability of causing severe adverse health consequences or death. Moreover, if the agency believes that other products in the facility may be similarly affected due to an inability to isolate the failure or a pervasive failure concern, registration suspension is also applicable. In such cases, the facility is prohibited from selling or distributing cosmetics products in the United States.

Additionally, responsible persons, such as manufacturers, distributors, or packers whose names appear on the label, are required to list each cosmetic product with the FDA. This step promotes transparency and facilitates efficient monitoring of products in the market.

 

The Voluntary Cosmetic Regulations Program (VRCP), which allowed voluntary submission of product information to the FDA, is no longer accepting submissions. MoCRA mandates a more extensive volume of submissions, necessitating the development of a new program by the FDA to handle facility registrations and product listings. This change enables the FDA to manage regulatory oversight effectively, ensuring greater transparency and safety within the industry.

 

MoCRA places a strong emphasis on consumer safety by mandating cosmetic manufacturers to submit safety information about their products to the FDA. This includes reporting any adverse reactions experienced by consumers and disclosing information regarding potentially harmful ingredients used in the products. The FDA utilizes this data to evaluate product safety and take appropriate actions to protect consumers.

 

Furthermore, manufacturers must adhere to Good Manufacturing Practices (GMPs), which encompass guidelines ensuring the quality and safety of cosmetic products. Compliance with GMPs involves using clean equipment, proper handling and storage of ingredients, and implementing robust quality control measures.

 

Another crucial aspect of MoCRA is the requirement for cosmetic manufacturers to disclose the full list of ingredients used in their products on the product label. This shift from previous regulations, which allowed vague terms like “fragrance,” provides consumers with enhanced transparency, enabling them to make informed decisions about the products they use.

Under MoCRA, certain exemptions are granted to cosmetic/drug and cosmetic/device combination products, relieving them from specific requirements including compliance with Good Manufacturing Practices (GMPs), adverse event reporting, registration and listing obligations, safety substantiation, and recordkeeping. These exemptions do not extend to facilities involved in the manufacturing of both combination products and cosmetics.

 

Small businesses are exempt from GMP and registration and listing requirements. A small business is defined as having average gross annual sales in the U.S. for the previous three-year period of less than $1,000,000, adjusted for inflation. It is important to note that the small business exemption does not apply if the business manufactures products that come into contact with the eyes, are injected, are intended for internal use, or alter appearance for more than twenty-four hours.

 

The Modernization of Cosmetics Regulation Act (MoCRA) represents a crucial leap forward in the regulation of cosmetics in the United States. With its emphasis on safety, transparency, and compliance, MoCRA ensures that the beauty industry aligns with evolving consumer expectations. Manufacturers and importers must familiarize themselves with the updated requirements to ensure they meet the standards set forth by MoCRA.


At Future Forwarding, our expertise in supply chain management and deep understanding of regulatory compliance can help you stay on top of these complex requirements. By leveraging our industry knowledge and network, we ensure that you can effectively navigate the regulatory landscape, maintain compliance, and streamline your operations. With our reliable support, shippers can focus on core business while confidently meeting the obligations imposed by MoCRA. To find out more, reach out to Future Forwarding today.

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