FTZ’ine July 2023
June 29, 2023
FTZ’ine September 2023
August 30, 2023
FTZs Dodge A(nother) Bullet
It is a hot one in your Nation’s Capital, but temperatures have dropped a little since UPS worked out a tentative agreement to avert a strike of its drivers.
That strike could otherwise have started today, but instead we have two major labor deals in the last two months. The FTZine also hears that the Canadian Longshoreman have agreed to a contract.
Not as lucky, Yellow Freight succumbed to its labor and debt woes last week after 99 years in business. Yellow had been the nation's #3 LTL carrier.
Treasury Secretary Yellen visited China early last month, Dialogue is always good, but she wasn’t able to move the needle on ornery U.S. – China relations.
The protracted war in Ukraine, supported by U.S. ammunition, means cyberattacks need to remain a concern for U.S. traders. The Port of Nagoya in Japan was a new victim last month.
Somebody opened up the valve at the FTZ Board which reported a big spike in Board and Staff actions last month. See for yourself below.
Speaking of valves, it turns out American fire-suppression equipment may not directly connect to shipboard systems. A tragic fire in Newark last month highlighted the difference in standards.
Top Story: So Much For The Olive Branch Approach
Treasury Secretary Janet Yellen took a four-day visit to China last month. The high-level dialogue was intended to moderate tensions between the two countries, but did not hit that mark.
While the Secretary has generally advocated less combative stances toward China, during the trip she directly addressed China’s use of nonmarket tools like expanded subsidies for its state-owned enterprises and domestic firms, as well as barriers to market access for foreign firms.
Recent economic data from the world’s second-largest economy showed manufacturing activity contracted for a fourth straight month, and a gauge for the services sector fell to its lowest level this year. It is not clear if these recent economic headwinds will cause China to open up to more trade with the west as a path to recovery, or to maintain a hard line at all costs to the Chinese economy. (more)
Economists fear China may be heading for deflation, even as the rest of the world worries about inflation. The Chinese economy grew just 0.8 percent in the second quarter, compared with the previous three months, hurt by weak consumer spending, high youth unemployment and a downturn in real estate.
Overseas demand for Chinese goods, which boomed during the pandemic, also fell as global growth stalled and central banks raised interest rates to combat high inflation.
While in China, Secretary Yellen addressed members of the American Chamber of Commerce and said “I’ve been particularly troubled by punitive actions that have been taken against U.S. firms in recent months.”
In March, the Chinese authorities detained five Chinese nationals working in Beijing for the Mintz Group, an American consulting company with 18 offices around the world, and closed the branch. The next month, the authorities questioned employees in the Shanghai office of Bain & Company, the U.S. management consulting firm.
The Biden administration has since announced additional restrictions on U.S. technology trade with China, including limits on advanced chips and U.S. investment in the country. The administration is also preparing to restrict Chinese companies’ access to U.S. cloud computing services to curtail China’s use of advanced chips for artificial intelligence.
Chinese businesses have themselves been unsettled by recent U.S. actions, such as the congressional hearings about the Chinese-owned social media network TikTok, and by the deepening American barriers to Chinese investments and corporate deals.
Tech Tip: Ready To Share Your ACE FTZ Tips With CBP?
U.S. Customs and Border Protection (CBP) is holding a technical forum in Washington DC on September 14, 2023 from 9 am to 12 pm.
CBP is hosting this information-sharing session with ACE software developers and self-programmers to exchange technical ideas that could help improve ACE short-term, as well as inform future CBP technical initiatives.
All ACE software developers and self-filers are welcome to join, and both in-person and virtual attendance will be available. If you would like to contribute, register at CBP ACE Technical Forum Registration by August 25th.
If you have specific questions or comments about managing your imports and exports through ACE, ask us at Info@iscm.co.
Foreign-Trade Zones Fret As Brown Buffs But Yellow Fades
UPS and the Teamsters union have reached a tentative contract on working conditions for the 340,000 unionized employees at the shipping giant, both parties announced last week.
Otherwise, today could have started the largest strike in U.S. history since 1959, according to CBS News.
Loss of the capacity of the UPS network would have devastating to U.S. supply chains. Securing the contract, and that capacity, may have spelled the end for the Yellow Freight System however. Not long after the UPS contract was announced, Yellow abruptly ceased operations and idled its 30,000 employees, including 22,000 Teamsters.
The new UPS contract raises starting pay for part-timers to $21 an hour, up from the current contracted pay of $15.50, and includes catch-up raises for longtime workers. Full-time workers will see their top hourly rate go up to $49 an hour.
"Rank-and-file UPS Teamsters sacrificed everything to get this country through a pandemic and enabled UPS to reap record-setting profits," Teamsters president Sean O'Brien said in a statement. "We demanded the best contract in the history of UPS, and we got it."
The agreement also provides for air conditioning in trucks, paid time off for Martin Luther King, Jr. Day, and more full-time positions, according to the Teamsters.
"This agreement continues to reward UPS's full- and part-time employees with industry-leading pay and benefits while retaining the flexibility we need to stay competitive, serve our customers and keep our business strong," UPS chief executive Carol Tomé said in a statement.
UPS has posted record profits for the last two years, buoyed by a pandemic that transformed how Americans get their goods. At the other end of the spectrum, Yellow is expected to file for bankruptcy at any moment now, following a loss of customers amid union strife and years of financial troubles.
That would be the largest trucking bankruptcy in the history of the U.S., experts said. The Nashville-based company, formerly known as YRC Worldwide, is the third largest less-than-truckload (LTL) carrier by revenue, behind FedEx and Old Dominion.
In a statement released Sunday night, the Teamsters union said it's working to help "affected members get the assistance they need to find good union jobs throughout freight and other industries."
Ransomware Attack Highlights FTZ Cybersecurity Concerns
The Port of Nagoya in Japan resumed operations after being targeted by a ransomware attack at the beginning of last month.
The attack disrupted cargo packing procedures and forced the suspension of operations at the container terminal, reported Bloomberg.
The attack did not impact the shipment of new cars for Toyota, the world’s largest carmaker, but it affected the loading and unloading of imported and exported parts at the port.
Similar ransomware attacks on ports and other supply chain infrastructure have occurred worldwide, including the Port of Lisbon in Portugal, and major ports in Canada back in April.
Reports have suggested that pro-Russian hackers may be responsible for the recent cyber attacks in Canada, causing concern among government and security agencies.
According to the Nagoya Harbor Transportation Association, all cargo terminal operations resumed by July 6th.
While the systems at the port were restored in a fairly short period of time, the recovery process took longer due to the large amounts of deleted data that needed to be recovered.
Several ports in Canada suffered multiple cyber attacks. The Ports of Halifax, Montreal, and Québec were targeted by a ‘denial-of-service attack’ which flooded their websites with traffic, causing them to crash.
While it is unclear who was behind this particular attack, local news outlet Montreal Gazette reported that a pro-Russian group known as NoName057(16) claimed responsibility for another attack that occurred just two days after Prime Minister Justin Trudeau met with his Ukrainian counterpart, Denys Shmyhal, in Toronto.
Trudeau reportedly used the meeting to announce a series of new military, economic, and cultural measures for Ukraine, including a donation of ammunition, assault rifles, and machine guns.
The Canadian Prime Minister has also recently linked the recent cyberattacks to Russia or pro-Russian groups, indicating the seriousness of the situation.
“Obviously, Canada’s unequivocally strong stance in support of Ukraine and against Russia’s illegal actions is bothersome to the Russian government and to pro-Russian hackers,” Trudeau said.
Foreign-Trade Zones Pivot as Drought Extends Panama Canal Restrictions
As the southwest U.S. experiences record heat, the drought in Panama has forced the Panama Canal Authority (ACP) to extend limitations on the maximum depth allowed for ships passing through the canal.
Throughput will also be restricted to an average of 32 ocean-going vessels per day; 10 vessels using the neo-Panamax locks with a depth limit of 44 feet, and 22 vessels using the newer Panamax locks with a maximum depth of 47.5 feet.
The ACP stated that each crossing uses some 51 million gallons of water. In July, Panama usually experiences heavy rains, but the current absence of precipitation has been described by the canal authority as “historically unprecedented”.
The Panama Canal is one of the single most important shipping passages in the world, with approximately 3.5% of maritime trade globally traversing the 80km inter-oceanic waterway.
Shipboard Fires Inflame RORO Capacity Woes
The Grande Costa d’Avorio, a RORO ship anchored at Port Newark caught fire with 1,200 new and used automobiles aboard headed for West Africa.
Firefighters who raced to the scene from City of Newark Engine 16 quickly learned that their standard 2.5-inch hose lines would not connect to the 1 inch equipment on the European-built ship. Two Newark firefighters died battling the blaze.
On the other side of the Atlantic, the Dutch Coast Guard is trying to control a fire on car carrier Fremantle Highway, which has killed one member of its crew and left several of the remaining 22 crew members injured.
That vessel was reportedly carrying up to 500 EVs among the almost 3,000 vehicles on board.
Recent EV and non-EV fires onboard RORO vessels are crimping finished vehicle shipping capacity. It was reported that over 300 finished vehicles await transport just at the Port of Bremerhaven.
The Ports in New Jersey and New York State are owned by the Port Authority of New York and New Jersey, which does not maintain its own fire department. A spokesman said he was unable to comment on the differently sized hose equipment, pending the outcome of an investigation.
Three other Newark firefighters were taken to area hospitals with injuries that included burned feet, exhaustion and difficulty breathing. Two members of the Elizabeth Fire Department, one of the many agencies that responded to a call for mutual aid, were hospitalized for smoke inhalation, the authorities said.
The Newark ship was filled with more than 1,000 new and used cars, vans and trucks and 157 containers, according to the Grimaldi Group, the vessel’s owner. The fire began on the ship’s 10th deck as crew members and local stevedores were loading vehicles, according to Grimaldi.
Grimaldi is based in Naples, Italy, and said there were no electric cars or hazardous cargo on the ship, which generally operates between the United States and West Africa, nor was it spilling fuel or in danger of sinking.
The Grande Costa d’Avorio operates with 28 crew members. The crew had to be rescued by helicopter and one person died amid efforts to extinguish the blaze.
Of the $271 billion worth of goods that moved through the Port of New York and New Jersey in 2022, furniture was the top commodity import; vehicles and their parts were the top export.
On the other side of the Atlantic. The K Line ship Fremantle Highway had departed from the Bremerhaven Port and was headed for Port Said in Egypt and then to Singapore. It is unconfirmed which vehicles were on board, although the Bremerhaven Auto Terminal is used by OEMs such as Mercedes Benz and BMW.
The Dutch Coast Guard cooled the K Line vessel with water until the risk of sinking the ship became too high.
In a statement late Friday, the Dutch coast guard said a more secure towline was established as temperatures on the Fremantle Highway had cooled and a recovery crew was able to board the stricken vessel. The ship can be moved to “a new, temporary anchorage, as soon as smoke development and weather forecasts allow,” it said.
FTZ Staff Activity
- FTZ Board Staff processed a Minor Boundary Modification (S-102-2023) in FTZ 54 on behalf of W Schonbek LLC, Plattsburgh, NY on June 21, 2023
- FTZ Board Staff processed a Minor Boundary Modification (S-103-2023) in FTZ 50AB on behalf of Yuejie Inc., Los Angeles, CA on June 23, 2023
- FTZ Board Staff processed a Subzone (S-104-2023) in FTZ 20 on behalf of LL Flooring Services LLC, Sandston, VA on July 11, 2023
- FTZ Board Staff processed a Minor Boundary Modification (S-105-2023) in FTZ 43E on behalf of Pfizer Inc., Portage, MI on June 26, 2023
- FTZ Board Staff processed a Minor Boundary Modification (S-106-2023) in FTZ 126D on behalf of Tesla Motors Inc., Portage, MI on June 26, 2023
- FTZ Board Staff processed a Minor Boundary Modification (S-107-2023) in FTZ 104 on behalf of Electrolux Home Products, Inc. Wentworth, SC on June 27, 2023
- FTZ Board Staff processed a Minor Boundary Modification (S-108-2023) in FTZ 235 on behalf of Glendale Warehouse & Distribution, Corp., Easthampton, NJ on June 27, 2023
- FTZ Board Staff processed a Minor Boundary Modification (S-109-2023) in FTZ 277 on behalf of Nestle USA, Inc., Glendale, AZ on June 28, 2023
- FTZ Board Staff processed a TSF Minor Boundary Modification (S-110-2023) in FTZ 120 on behalf of Port of Longview, Longview, WA on June 28, 2023
- FTZ Board Staff processed a Minor Boundary Modification (S-111-2023) in FTZ 244 on behalf of Keeco, LLC, Moreno Valley, CA on June 29, 2023
- FTZ Board Staff processed a Minor Boundary Modification (S-112-2023) in FTZ 49 on behalf of Dana Transport, Inc., Avenel, NJ on June 29, 2023
- FTZ Board Staff processed a Minor Boundary Modification (S-113-2023) in FTZ 84 on behalf of Pronto Shipping and Storage Inc., Houston, TX on June 29, 2023
- FTZ Board Staff processed a Minor Boundary Modification (S-114-2023) in FTZ 127 on behalf of J.E. Oswalt & Sons Heavy Hauling & Rigging, Inc., Monetta, SC on June 29, 2023
- FTZ Board Staff processed a Termination (S-115-2023) in FTZ 123 on behalf of Aspen Distribution, Denver, CO on June 29, 2023
- FTZ Board Staff processed a Minor Boundary Modification (S-116-2023) in FTZ 272E on behalf of CONRI Services Inc., Wind Gap, PA on July 3, 2023
- FTZ Board Staff processed a Minor Boundary Modification (S-117-2023) in FTZ 104N on behalf of Bradshaw International, Inc. dba Bradshaw Home, Bloomingdale, GA on July 5, 2023
- FTZ Board Staff processed a Minor Boundary Modification (S-118-2023) in FTZ 32 on behalf of Interport Logistics, LLC, Miami, FL on July 5, 2023
- FTZ Board Staff processed a Minor Boundary Modification (S-119-2023) in FTZ 32 on behalf of Draco Freight Logistics Corporation, Miami, FL on July 5, 2023
- FTZ Board Staff processed a Minor Boundary Modification (S-120-2023) in FTZ 49 on behalf of Harbor Freight Transport Corp., Newark, NJ on July 6, 2023
- FTZ Board Staff processed a Minor Boundary Modification (S-121-2023) in FTZ 176 on behalf of Capitol Warehousing Corporation, Rockford, IL on July 10, 2023
- FTZ Board Staff processed a Minor Boundary Modification (S-122-2023) in FTZ 283 on behalf of Shelby Group International Incorporated dba MCR Safety, Piperton, TN on July 11, 2023
- FTZ Board Staff processed a Minor Boundary Modification (S-123-2023) in FTZ 46H on behalf of MANE, Inc., Lebanon, OH on July 11, 2023
- FTZ Board Staff processed a Minor Boundary Modification (S-124-2023) in FTZ 32 on behalf of Promo International, Inc., Miami, FL on July 18, 2023
- FTZ Board Staff processed a Subzone (S-125-2023) in FTZ 37 on behalf of Findaly’s Tall Timbers Distribution Center, LLC dba Southern Tier Logistics, Village of Horseheads, NY on July 18, 2023
- FTZ Board Staff processed a Minor Boundary Modification (S-126-2023) in FTZ 22 on behalf of Weida Freight System, Inc., Elk Grove Village, IL on July 18, 2023
- FTZ Board Staff processed a Minor Boundary Modification (S-127-2023) in FTZ 38 on behalf of Port City Logistics, Inc., Greer, SC on July 19, 2023
- FTZ Board Staff processed a Subzone Termination (S-128-2023) in FTZ 64C on behalf of Michaels Stores Procurement Company, Inc., Jacksonville, FL on July 19, 2023
- FTZ Board Staff processed a Minor Boundary Modification (S-129-2023) in FTZ 49 on behalf of Sakar International Inc., Edison, NJ on July 5, 2023
- FTZ Board Staff processed a Subzone Termination (S-130-2023) in FTZ 22V on behalf of Michaels Stores Procurement Company, Inc., Jacksonville, FL on July 20, 2023
- FTZ Board Staff processed a Minor Boundary Modification (S-131-2023) in FTZ 29 on behalf of Arvato Digital Services, LLC, Sherperdsville, KY on July 5, 2023
- FTZ Board Staff processed a Subzone Termination (S-132-2023) in FTZ 138 on behalf of JOANN Fabrics and Crafts, West Jefferson, OH on July 20, 2023
- FTZ Board Staff processed a Minor Boundary Modification (S-133-2023) in FTZ 202 on behalf of Realstock PMC Corporation, Inglewood, CA on July 24, 2023
- FTZ Board Staff processed a Minor Boundary Modification (S-134-2023) in FTZ 106 on behalf of Integris International Inc. dba Bri-Steel Manufacturing, Enid, OK on July 25, 2023
- FTZ Board Staff processed a Minor Boundary Modification (S-135-2023) in FTZ 202 on behalf of Harmoni International Spice LP, City of Industry, CA on July 25, 2023
- FTZ Board Staff processed a Minor Boundary Modification (S-136-2023) in FTZ 277 on behalf of Ross Distribution LLC, Buckeye, AZ on July 25, 2023
- FTZ Board Staff processed a Subzone Termination (S-137-2023) in FTZ 24D on behalf of Michaels Stores Procurement Company, Inc., Hazelton, PA on July 26, 2023
Foreign-Trade Zone Board Activity
- LL Flooring Services, LLC submitted an application to operate their facilities as a Subzone of Foreign-Trade Zone 20 in Sandston, Virginia. MORE
- Greater Maricopa Foreign Trade Zone, Inc. submitted an application to add an additional magnet site under the Alternative Site Framework within Foreign-Trade Zone 277 in Western Maricopa County, Arizona. MORE
- Valero Refining-New Orleans L.L.C. was denied approval of its Notification Requesting FTZ Production Authority for renewable fuels and by-products within Foreign-Trade Zone 104 in Norco, Louisiana. MORE
- Givaudan Fragrances Corporation received authorization of production activity for additional fragrance compounds within Foreign-Trade Zone 44 in Mount Olive, Flanders and, Towaco, New Jersey. MORE
- Phillips 66 Company was denied approval of its Notification Requesting FTZ Production Authority for renewable fuels and by-products within Foreign-Trade Zone 3 in Rodeo, California. MORE
- Intel Corporation received authorization of production activity for semiconductor products within Foreign-Trade Zone 138 in New Albany, Ohio. MORE
- Caterpillar Inc. received authorization of production activity for additional components of construction and earth moving machines within Foreign-Trade Zone 155 in Victoria, Texas. MORE
- Getinge Group Logistics Americas LLC submitted a notification of proposed production activity for health care products and kits within Foreign-Trade Zone 49W in Dayton, New Jersey. MORE
- Lely North America, Inc. submitted a notification of proposed production activity for automated milking and feeding equipment within Foreign-Trade Zone 107E in Pella, Iowa. MORE
- Cheniere Energy, Inc. received approval to expand Subzone 122X within Foreign-Trade Zone 122 in Portland, Texas. MORE
- Acushnet Company received approval to expand Subzone 28F within Foreign-Trade Zone 28 in Lakeville, Massachusetts. MORE
- Findlay's Tall Timbers Distribution Center LLC d/b/a Southern Tier Logistics submitted an application to operate their facilities as a subzone of Foreign-Trade Zone 37 in the Village of Horseheads, New York. MORE
- Samsung Electronics America, Inc. submitted a notification of proposed production activity for additional components of mobile phones and tablets within Foreign-Trade Zone 168D in Coppell, Texas. MORE
- The Port of Houston Authority received approval to add Wharton County, Texas to its service area under the Alternative Site Framework within Foreign-Trade Zone 84 in Houston, Texas. MORE
- The Port of Houston Authority received approval to add Waller County, Texas to its service area under the Alternative Site Framework within Foreign-Trade Zone 84 in Houston, Texas. MORE
- Airbus OneWeb Satellites, North America LLC received authorization of production activity for additional components of satellites and satellite systems within Foreign-Trade Zone 136 in Merritt Island, Florida. MORE
FTZs Dodge A Bullet:
It is a hot one in your Nation’s Capital, but temperatures have dropped a little since UPS worked out a tentative agreement to avert a strike of its drivers.
That strike could otherwise have started today, but instead we have two major labor deals in the last two months. The FTZine also hears that the Canadian Longshoreman have agreed to a contract.
Not as lucky, Yellow Freight succumbed to its labor and debt woes last week after 99 years in business. Yellow had been the nation’s #3 LTL carrier.
Treasury Secretary Yellen visited China early last month, Dialogue is always good, but she wasn’t able to move the needle on ornery U.S. – China relations.
The protracted war in Ukraine, supported by U.S. ammunition, means cyberattacks need to remain a concern for U.S. traders. The Port of Nagoya in Japan was a new victim last month.
Somebody opened up the valve at the FTZ Board which reported a big spike in Board and Staff actions last month. See for yourself below.
Speaking of valves, it turns out American fire-suppression equipment may not directly connect to shipboard systems. A tragic fire in Newark last month highlighted the difference in standards.