Canadian National Back to Normal Following Strike

December 19, 2019

Canadian National announced that its network performance has “normalized” to levels experienced prior to the work stoppage that affected the railroad for eight days.

The November strike of approximately 3,200 of the railroad’s conductors, trainspersons and yard workers left the network operating at just 10% of its total capacity. As weekly revenue-ton-miles (RTMs) dropped by more than 30%, the company accumulated a large backlog of shipments that would require weeks to work through.

According to a press release from the company, “every strike day can cause several days of backlog, requiring time for the network to be fully current once it has returned to normal operational ranges.”

“I’m pleased to announce that our focused and methodical recovery plan is working and that the performance of our movements has recovered to normal ranges. We will remain focused on safety as we continue to clear the backlog caused by the work stoppage, said CN President and CEO JJ Ruest.

For the full story, please click HERE

Source: Freight Waves

BREAKING NEWS: Trump Cancels December Tariffs as US, China Agree on a Deal

December 13, 2019

The U.S. and China have officially agreed to a phase one deal on trade, which will cancel scheduled December tariffs—though some other existing tariffs will stay put.

In early tweets Friday, President Trump said, “We have agreed to a very large Phase One Deal with China. They have agreed to many structural changes and massive purchases of Agricultural Product, Energy, and Manufactured Goods, plus much more. The 25% Tariffs will remain as is, with 7 ½% put on much of the remainder…”

Continuing in a separate tweet, he said, “…The Penalty Tariffs set for December 15th will not be charged because of the fact that we made the deal. We will begin negotiations on the Phase Two Deal immediately, rather than waiting until after the 2020 Election. This is an amazing deal for all. Thank you!”

An official statement from the United States Trade Representative (USTR) Friday called the agreement both “historic” and “enforceable,” noting that it requires structural reforms to China’s intellectual property and technology practices, plus changes to its agriculture buys, as the president noted, and adjustments to its currency and foreign exchange policies.

For the full story, please click HERE

Source: Sourcing Journal 

Canada, Mexico and US agree on Revised USMCA

December 12, 2019

The business community supports the USMCA, but economists estimate the overall impact on the economy will be middling.

State representatives of Canada, Mexico and the U.S. signed a revised version of the U.S.-Mexico-Canada Agreement (USMCA) in Mexico City on Tuesday, containing enhanced labor, environmental and pharmaceutical enforcement protections called for by congressional Democrats.

The USMCA must be ratified by the U.S. Congress before it can go into force. Once the Trump administration formally submits the deal for a vote, a move that has not yet been announced, legislators will have a 90-day window to approve the deal.

Some of the additional provisions in the revised USMCA include:

Labor: Removed language from the deal that would have made it difficult for governments to take action if trading partners were not living up to, or violating, labor protections. Created an interagency committee to monitor Mexico’s labor reform and compliance.

Environment: Established an interagency committee that will assess the current environmental conditions in Mexico and Canada and monitor the implementation of, and compliance with, environmental requirements included in the USMCA.

Pharmaceuticals: Removed 10-year exclusivity provisions for expensive biologic drugs that currently prevent or delay the sale of cheaper generic versions. Included new provisions to encourage greater competition between drug producers with the goal of keeping prices lower.

For the full story, please click HERE

Source: Supply Chain Dive

Retailers Hedged Their Bets on December Tariffs with Cargo Imports Last Month

December 12, 2019

Cargo volume at major U.S. container ports increased significantly in November as retailers brought in merchandise ahead of new tariffs set to take effect this month, according to the Global Port Tracker report released Monday by the National Retail Federation (NRF) and Hackett Associates.

U.S. ports covered by Global Port Tracker handled an estimated 1.95 million Twenty-Foot Equivalent Units (TEU) in November, up 8 percent year-over-year, as merchants front-loaded imports ahead of this month’s scheduled tariffs. That was the highest number since 1.97 million TEU in August, when retailers did the same ahead of tariffs that took effect Sept. 1. A TEU is one 20-foot-long cargo container or its equivalent.

“At this point, holiday merchandise is already in the country, so the direct impact of new tariffs won’t be seen until the season is over,” Jonathan Gold, vice president for supply chain and customs policy at NRF, said.

President Trump announced a tentative agreement on a partial trade deal with China in October, but the measure has yet to be finalized and a new round of tariffs on consumer goods is still scheduled to take effect Dec. 15.

Hackett Associates founder Ben Hackett said the trade war is “one of the factors that is impacting our forward-looking models, as we continue to show slower long-term growth in import volumes.”

For the full story, please click HERE

Source: Sourcing Journal 

Lost at Sea: The Impact of New Maritime Trade Regulations

December 5, 2019

IMO 2020 regulations point to shipping delays, new costs and supply chain vulnerabilities.

As more and more suppliers arrange search parties [pun for: conducting cost-benefits analysis], significant time and costs associated with shipping is seldom recovered, and the future looks grim for suppliers who have not evaluated onshoring options. In fact, the supply chain impact may be significant as the maritime industry prepares for one of the most significant changes in its recent history: IMO 2020 rules that will be met with escalating costs and operational challenges.

What is IMO 2020? What is the impact?
Starting January 1, 2020, all ships operating in the open sea must comply with stricter environmental regulation set by the International Maritime Organization (IMO 2020), aiming to reduce sulphur oxide emissions from sea vessels by 85%.

Operational challenges will be considerable, and the costs astronomical, with a total global impact in excess of $1 trillion over five years, according to S&P Global Platts Analytics estimates.

While the onus for compliance falls on carriers, price volatility will continue with anticipated service disruptions as thousands of ships are taken out of the market to fit equipment called scrubbers (or a switch to low-sulfur fuel or use of liquidized natural gas). In fact, overall prices of container transportation and freight rates have already increased significantly, including one indicator—the Baltic Dry Index—that surged in September to its highest since November 2010.

Fleets will consider factors such as the age of their vessels, trading routes and locational availability of the various fuel options. However, with concerns around demand outstripping supply, fuel costs will increase along logistics timelines and availability of shipping. These costs and implications will be passed down to those shipping materials.

For the full story, please click HERE

Source: Industry Week