Insights

When cargo enters the US, there are a list of “standard” fees that must be paid to US Customs, such as duty, HMF, MPF, etc. Paying invoices for these fees is part of daily business practice for many importers. Outside of these charges, less common, but impactful Customs penalties can be issued.

The recent Shanghai lockdowns have significantly impacted container departures out of Shanghai and surrounding ports. Many origins in Central and Northern China have seen volumes drop off by as much as 20%-30%, with Shanghai closer to a 60% reduction. Do we run into a situation where market volumes bounce back after the slack period at the same time Shanghai backlog starts to clear? Further complicating supply chains stability this shipping season, is the expiration of current ILWU contract on July 1st. If history is any indication, the potential for further disruption exists due to labor slow down which would only add to the ongoing congestion chaos plaguing West Coast ports.

While automation has transformed manufacturing among other industries, the delivery of physical goods still relies intensively on human labor. Many experts predict that labor constraints, pandemic-related and otherwise, will continue to create headwinds for importers as consumer demand remains high through 2022.