FTZ’ine October 2022
October 4, 2022
FTZ’ine December 2022
December 1, 2022
Click That Lever
Baseball season is now officially over, as far as the Yankee fans at the FTZ’ine are concerned. For reasons that are not apparent here in DC, two teams are still playing anyway. What is clear in your Nation's Capital is that election season is in full swing, with Election Day 2022 just one week from today. Tight, meaningful races abound this cycle so be sure to get out and cast your vote if you have not done so already.
The economy sent some confusing signals last month. After six months of retraction, the U.S. economy expanded in the most recent quarter, but the average rate on 30-year mortgages climbed past 7%, the highest in 20 years. Other prices for consumers also climbed, signaling that more rate increases are ahead.
There is still no new contract covering west coast dock workers, and important rail unions rejected the contract proposals recently negotiated with the help of the Biden Administration. This could mean Congressional action will be needed to avoid a strike that would strain already tenuous supply chains.
Top Story: Back In Black
The U.S. economy returned to growth, expanding at a better-than-expected 2.6 percent annual rate from July through September. That snapped two straight quarters of economic contraction but did not convincingly erase concerns of a U.S. recession in 2023.Last month’s report from the Commerce Department showed that a 14% increase in exports and steady consumer spending helped restore growth to the world’s largest economy. Housing investment, though, plunged at a 26 percent annual pace, weighed down by rising mortgage rates.
With inflation still near a 40-year high, price growth has dented consumer spending. Interest rates at a 20-year high have cooled the housing market and are likely to affect other economic sectors over time. The outlook for the world economy, too, grows bleaker the longer that Russia’s war against Ukraine drags on. All of this combines for a difficult prediction of U.S. economic conditions in 2023.
The Fed has raised interest rates five times this year and is set to do so again tomorrow. Sales of existing homes have fallen for eight straight months, and construction of new homes is down nearly 8 percent from a year ago.
The job market remains a very bright spot in the economy. Employers have added an average of 420,000 jobs a month this year, putting 2022 on track to be the second-best year for job creation (behind 2021) in Labor Department records since 1940. The unemployment rate was 3.5 percent last month, matching a half-century low.
The Federal Reserve’s preferred inflation measure showed that consumer prices jumped again in September, and a gauge of wages it watches closely is climbing quickly too with the job market being so strong.
In response to those signals the Fed is expected to announce another increase in interest rates of three-quarters of a percentage point this week. Officials have previously indicated in economic forecasts that they expected to slow to a half-point rate increase in December, and investors will closely watch the post-meeting news conference for guidance on the rate of future increases.
Tech Tip: ACE Portal Phase 2 – What It Is, and Isn’t
CBP has been working on updates to the ACE portal and migrating functionality from the legacy portal to the modernized portal. The next release of new functionality is November 8th, and as the date approaches, CBP is publishing more information about what is in the release.
One item that was exciting to the FTZ community was the ability to “arrive/export in-bonds” via the portal. This seemed like a solution for operators that need to perform this task and don’t have ABI software. But the most current release description says that this ACE portal functionality is available only to those “with carrier accounts”. So, unless an operator happens to also be a registered carrier with CBP, the ABI transmission of arrival messages is still necessary. Even so, bonded carriers without an ABI account or software should now be able to arrive their own transfers and exports in the portal.
A few weeks ago, CBP sent out CSMS # 53441417, reminding the trade that protest documentation must be submitted through the protest application in the ACE portal. The ability to file protests in the modernized ACE portal was also added in Phase 2 but is only possible for those with Protest Filer accounts. This means only those with such accounts, and not those with only an Importer account, can provide the documentation. Importers aren’t allowed to use Document Imaging Service to submit their own files, either.
As the ACE portal evolves, it is a good idea to keep an eye on these release plans to know what you can and can’t do in your portal account. Should you have any questions about anything on the ACE release plan, please send them to us at Info@iscm.co.
Knackered Truss Retreats
UK Prime Minister Liz Truss resigned after just 44 days in office, making her the shortest-serving prime minister in British history.
Shortly after her original appointment, her Finance Minister Kwasi Kwarteng announced a plan for debt-funded tax cuts that sent British financial markets into an uproar, precipitating her demise.
Kwarteng subsequently resigned and most of the offending policies were reversed three weeks later by Truss’s second pick for finance minister, Jeremy Hunt. That didn’t quell calls for her resignation.
She said in a statement outside 10 Downing Street, “We set out a vision for a low-tax, high-growth economy that would take advantage of the freedoms of Brexit.”
“I recognize though, given the situation, I cannot deliver the mandate on which I was elected by the Conservative Party. I have therefore spoken to His Majesty the King to announce that I am resigning as leader of the Conservative Party.”
Rishi Sunak, who lost to Truss in the previous vote for a new Prime Minister, officially took over as Britain’s 57th Prime Minister last month, and quickly worked to form a cabinet.
Truss had beaten Sunak to become leader of the Conservative Party following the resignation of Boris Johnson on July 7th. Prime Minister Sunak’s government, seeking more time to make the “right decisions,” will deliver its first economic plan on Nov. 17th. The new Prime Minister acknowledged the difficulties Britain was facing and promised a government of “integrity, professionalism and accountability at every level.”
In one of his most important appointments, Prime Minister Sunak selected Jeremy Hunt to remain as Chancellor of the Exchequer. He also kept his predecessor’s foreign and defense secretaries in place, adding a sense of stability in the Cabinet.
Mr. Hunt is seen as a steady hand in a tumultuous party at a tumultuous time, a pragmatic politician who occupies his party’s middle ground. He held cabinet offices for nine years under Prime Ministers David Cameron and Theresa May, first as culture secretary overseeing the 2012 London Olympics, then as health secretary and, finally, as foreign secretary.
Not So Quiet On The Western Front
Dwell and ship waiting times are decreasing at the Port of Los Angeles, but negotiations over dockworkers’ wages seem far from reaching a negotiated settlement.
Port of LA Chief Executive Gene Seroka said in an interview last month “Our dock workers’ negotiation on a new coastwide contract with their employers’ association is going on a little bit longer and slower than many would like,”
“And importers have shifted cargo to the East and Gulf Coast, where we’re now, unfortunately, seeing backups of ships.”
Seroka has declared himself optimistic, as he does not anticipate any disruptions caused by the contract talks between the International Longshore & Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) affecting 22,000 staff members at 29 ports, including Los Angeles and Long Beach.
“If you ask any of the stakeholders the negotiations are not moving fast enough and it’s frustrating – but collective bargaining is hard, this is very difficult work,” he said.
“These dockworkers have real issues on the table and worked through the pandemic as many others did. The industry has made a tremendous amount of money over the last three years – that money should be shared.”
Responding to whether he sees a deal before year end, Seroka said that remains in question and a deal might not be reached for months.
On top of the uncertainty over west coast dock workers, a union with almost 12,000 rail maintenance workers rejected the works agreement reached between the National Carriers’ Conference Committee (NCCC) and Class I freight railroads. Now, a second union representing 6,000 additional rail workers has voted against ratifying the agreement brokered by Secretary of Labor Marty Walsh in September, dramatically increasing the possibility of a work action.
The vote against the contract centered on frustration with a lack of paid sick days, according to a statement from Brotherhood of Railroad Signalmen President Michael Baldwin. "For the first time that I can remember, the BRS members voted not to ratify a National Agreement," he said.
The rejection of the deal came despite a 24% compounded wage increase and preservation of the members' health care benefits, Baldwin added.
The National Carriers' Conference Committee, or NCCC, which represents freight railroads in national collective bargaining, expressed disappointment over the union vote.
The tentative contract "included the largest wage package in nearly five decades, maintained rail employees' platinum-level health benefits, and added an additional day of paid time off," the NCCC said in a statement.
The contract was rejected by roughly 60% of members in the Brotherhood of Railroad Signalmen, while nearly 40% voted in favor of the deal, the union said. The vote garnered the highest participation rate in union history, it added.
In all, 12 unions representing 115,000 workers stand to ratify a labor agreement with rail companies. Six unions have ratified the deal, the NCCC said.
The two largest rail unions -- the Brotherhood of Locomotive Engineers Trainmen, or BLET, and the SMART Transportation Division, or SMART-TD, which make up roughly half of all rail workers, are set to count their votes later this month.
The unions that voted down the agreement have vowed to continue negotiations at least until Nov. 19, when a strike could ensue unless there is swift action by Congress.
Election In China Foretells Icy U.S. Relations
Chinese leader Xi Jinping has emerged from last month's Communist Party congress stronger than ever after securing a third term as Communist Party boss and pushing all but his most loyal allies out of the government.
Analysts say the lopsided lineup upsets a long-standing practice of balancing factions within the Communist Party's policymaking elite, and highlights Xi's sheer political muscle. That makes it unlikely there will be an opportunity to reset relations with the U.S. anytime soon.
Four members of the previous Standing Committee retired to make way for Xi loyalists. Two had reached or passed the traditional retirement age of 68. But two had not, and their exit was a surprise.
Premier Li Keqiang, who was No. 2 in the party hierarchy, and Vice Premier Wang Yang were pushed out. Both are 67 years old and would have been eligible to stay on based on prior informal party rules. Party ideology czar Wang Huning, who is also 67, retained his membership in the Standing Committee.
The congress also enshrined opposition to, and deterrence of, anyone seeking "Taiwan independence."
Taiwan has been self-governed since 1949 when Nationalist Party troops fled there after the Communist Party swept to power. Beijing considers it a part of China to be "reunited" with the mainland, by force if necessary.
None of the new Politburo Standing Committee members seem young enough to be considered true successors to Xi in the next five to 10 years, so the foreseeable future shows no sign of improving U.S. relations.
COAC Takes Flack For Proposing Manifest Confidentiality For All
The Commercial Customs Operations Advisory Committee (COAC) unveiled a controversial proposal to make data collected from ocean manifests confidential. The Associated Press obtained a copy of the proposal from a committee member and reported the proposal’s contents.
COAC is made up of executives from 20 companies, including Walmart, General Motors and Intel, and is authorized by U.S. Customs and Border Protection (CBP) to advise on ways to streamline trade regulations.
Users of the ocean manifest information CBP provides include researchers and reporters investigating goods produced with forced labor, and these users decried the possibility of losing access to the information.
In August alone, CBP targeted shipments valued at more than $266 million for inspection due to suspected use of forced labor, including goods subject to the recently passed Uyghur Forced Labor Prevention Act (UFLPA). Last month the U.S. Department of Labor, an UFLPA Task Force Member, added 32 products such as acai berries from Brazil, gold from Zimbabwe and tea from India to its list of goods possibly made with child or forced labor.
The COAC proposal, if adopted, would make confidential the data CBP collects on ocean freight, which accounts for about half of the $2.7 trillion in goods imported to the U.S. every year. Rail, truck and air manifest data is already shielded from public disclosure under U.S. law.
The mismatch in rules governing disclosure of trade data for different forms of transportation goes back to 1996, when lobbying by the airline industry reversed a law passed by Congress that same year that for the first time required air freight manifests be made public.
In 2017, Scottsdale, Arizona-based ImportGenius, a popular platform used to search CBP manifest data, was among companies that unsuccessfully sued the federal government seeking to obtain aircraft manifests.
FTZ Staff Activity
- FTZ Board Staff processed a Termination (S-182-2022) in FTZ 39 on behalf of Norwex USA, Inc., in Coppell, TX on October 6, 2022
- FTZ Board Staff processed a Minor Boundary Modification (S-183-2022) in FTZ 38P on behalf of AFL Telecommunications, LLC, in Duncan, SC on October 11, 2022
- FTZ Board Staff processed a Minor Boundary Modification (S-184-2022) in FTZ 281 on behalf of Makita Latin America Inc., in Hialeah, FL on October 12, 2022
- FTZ Board Staff processed a Termination (S-185-2022) in FTZ 86 on behalf of Norvanco International, Inc., in Summer, WA on October 13, 2022
- FTZ Board Staff processed a Minor Boundary Modification (S-186-2022) in FTZ 86 on behalf of JE Exports, in Calexico, CA on October 13, 2022
FTZ Board Activity
- The Rocky Mountain World Trade Center Association d/b/a World Trade Center Denver has been designated as the new grantee of FTZ 123 in Denver, Colorado. MORE
- GHSP, Inc. received authorization of production activity for automotive products within FTZ 189 in Grand Haven, Hart and Holland, Michigan. MORE
- The Muskogee City-County Port Authority received approval for the reorganization and expansion of FTZ 164 under the alternative site framework in Muskogee, Oklahoma. MORE
- Aker Solutions, Inc. submitted a notification of proposed production activity for subsea oil and gas systems within FTZ 82 in Mobile, Alabama. MORE
- Mercury Marine submitted a notification of proposed production activity for marine service, repair, winterization, or replacement kits within FTZ 72 in Brownsburg, Indiana. MORE
- Boehringer Ingelheim Animal Health Puerto Rico LLC received authorization of production activity for pharmaceutical products/canine within FTZ 61 in Barceloneta, Puerto Rico. MORE
- EUSA Global LLC received authorization of production activity for medical equipment within FTZ 281 in Medley, Florida. MORE
- voestalpine High Performance Metals LLC submitted an application for subzone status for its facility within FTZ 207 in South Boston, Virginia. MORE
- Maxter Healthcare Inc. received authorization of production activity for medical examination disposable gloves within FTZ 149H in Rosharon, Texas. MORE
- Almod Diamonds Ltd., Inc. received authorization of production activity for jewelry, precious and semi-precious stones, and pearls within FTZ 241 in Miramar, Florida. MORE
Click That Lever:
Baseball season is now officially over, as far as the Yankee fans at the FTZ’ine are concerned. For reasons that are not apparent here in DC, two teams are still playing anyway. What is clear is that election season is in full swing, with Election Day 2022 just one week from today. Tight, meaningful races abound this cycle so be sure to get out and cast your vote if you have not done so already.
The economy sent some confusing signals last month. After six months of retraction, the U.S. economy expanded in the most recent quarter, but the average rate on 30-year mortgages climbed past 7%, the highest in 20 years. Other prices for consumers also climbed, signaling that more rate increases are ahead.
There is still no new contract covering west coast dock workers, and important rail unions rejected the contract proposals recently negotiated with the help of the Biden Administration. This could mean Congressional action will be needed to avoid a strike that would strain already tenuous supply chains.