The Trump administration’s new definition of “transshipping” in the Vietnam trade deal may be an attempt to fundamentally redefine the way customs law works in ways that will make global trade compliance endlessly more complicated (and expensive). 🧵 From the start Trump’s use of the term “transshipping” made no sense to me. If goods are shipped from China to Vietnam and then on to the U.S., what we in the logistics and customs industry call transshipping, then those are goods still have China as the country of origin and are subject to Chinese duties, not Vietnamese. 2/

With the end of de minimis on Chinese goods, individuals receiving items via the regular mail from China to the U.S. (and soon, from anywhere in the world) will likely need to go to their local post office branch to pay their duties and pick up the goods. /🧵 This is how it works in most of the world, and how it used to be in the U.S., but this is likely going to come as quite a shock for people not used to it.

The rising tensions between India and Pakistan due to the Pahalgam terror attacks are now disrupting ocean shipping. Over the weekend, both nations imposed bans on cargo originating from each other transshipping to their respective countries.

In the 3 weeks since the tariffs took effect, ocean container bookings from China to the United States are down over 60% industry wide. 🧵 The U.S. imports $600B worth of goods from China every year, 95% of that via ocean freight. Those goods sell at retail for ~$2T.

Thousands, and then millions, of American small businesses, including many iconic brands, will go bankrupt this year if the tariff policies on China don’t change.

🧵 These small businesses are largely unable to move their manufacturing out of China. They are last in line when they try to go to a new country as those other countries can’t even keep up with the demand from mega corporations.

Thousands, and then millions, of American small businesses, including many iconic brands, we’ll go bankrupt this year if the tariff policies on China don’t change. 🧵 These small businesses are largely unable to move their manufacturing out of China. They are last in line when they try to go to a new country as those other countries can’t even keep up with the demand from mega corporations.

I created this list of background resources for @Flexport so everyone on our team become an expert on the new tariffs so we can best help our customers navigate this crisis.

Sharing here to since many customers follow me. If you have other great articles and sources, please post in replies. Flexport content:

Live blog on tariffs:
flexport.com/blog/what-pres…

My Liberation Day Livestream:
flexport.com/webinars/liber…

My blog post on the de minimis ban:
flexport.com/blog/duty-free…

Our weekly Logistics market updates:
flexport.com/global-logisti…

On April 17th the U.S. Trade Representative's office is expected to impose fees of up to $1.5M per port call for ships made in China and for $500k to $1M if the ocean carrier owns a single ship made in China or even has one on order from a Chinese shipyard. 🧵 1/ Ocean carriers have announced that to reduce the fees they will skip the smaller ports like Seattle, Oakland, Boston, Mobile, Baltimore, New Orleans, etc.
Some carriers have said they'll just move the capacity serving the U.S. to other trade lanes altogether. /2

Duty free "de minimis" shipping is being eliminated from ALL countries as soon as the systems are ready.  🧵 Buried in today's Executive Order on tariffs is a bombshell: The program that allows goods to be shipped duty free if they come direct from overseas to final consumers is going away for all countries.

With Elon demanding government employees report on what they got done last week, almost nobody noticed what the office of US Trade Representative got done: Proposed $1M fee per port call for all Chinese made ships at all US ports. Most ships call at 3 ports per voyage to the US, so this is a tax of ~$3M on $10-15M in revenue per trip.

Mexican warehouses providing e-commerce fulfillment services that enable brands to avoid U.S. customs duties were just banned from importing apparel by the…checks notes…President of Mexico. 🧵 As a reminder, if you import goods worth less than $800 per day per customer, and the shipment is consigned to the end consumer, those goods can be brought into the U.S. duty-free. While often called a loophole, it’s not really, the de minimus exemption is clearly delineated in section 321 of the Code of Federal Regulations 19 regulating Customs duties.

I just dug into the legal mechanism by which the Biden Administration can intervene to prevent the port strike.

No way they can pull this off in time to avert the strike next Tuesday. It’s too late.

The strike is happening. The remaining variable is how long will it last. 🧵 Under the Taft-Hartley Act, specifically in the context of an emergency injunction to prevent a strike, the decision on whether to issue the injunction is made by a federal district court.

The biggest wild card in the presidential election that nobody’s talking about? The looming port strike that could shut down all East and Gulf Coast ports just 36 days before the election. 🧵 If the International Longshoremen’s Association (ILA) goes on strike, tens of thousands of businesses could miss the key Black Friday, Cyber Monday peak sales period.

1/ Canada’s two largest railways—Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC)—have locked out more than 9,000 workers after labor talks with the Teamsters union fell apart. The result? A total shutdown of Canada’s freight rail traffic, shaking the world’s 10th-largest economy. 🧵 2/ This rail stoppage is the result of months of tense negotiations between the railways and 9,300 engineers, conductors, and yard workers. Despite last-minute efforts to reach a deal, talks broke down just before the midnight deadline, leading to the lockout.

Over the past week, dozens of motor carriers in the Chicagoland area have been holding loads of cargo hostage in demand for what are effectively ransom payments. Insane that this is happening in 2024, or maybe organized crime brazenly operating is just part of life nowadays. 🧵 While these motor carriers are registered and maintain some operations in the U.S., there are likely affiliations with individuals in Eastern Europe. This is not the first time the group has committed these acts.

Global containerized ocean freight prices are surging to levels not seen since the pandemic supply chain crunch. Some key trade lane rates are up 140% since mid-December and increasing by the week. What’s happening, why, and what it means for businesses needing products moved? 🧵 The simplest answer for why prices are surging is that freight is one of the most inelastic markets in the entire global economy—brands rarely ship more stuff just because the price of freight is cheap, or less stuff because the price of freight is expensive.

A massive container ship crashed into the main bridge of Baltimore’s beltway this morning, causing total collapse to the bridge and cutting off the city’s container port from the global ocean. At least 6 people are missing. 🧵 The collision of the Dali, built in 2016 by Hyundai and operated by Maersk, took place around 3 am last night. If it had occurred during rush hour this likely would have caused much more loss of life.

https://twitter.com/BNONews/status/1772515766929097088

Flexport currently has 2206 TEUs on container ships that were expected to transit the southern Red Sea and the Gulf of Aden sometime in the next 72 hours. Houthi rebels missile attacks on container ships at this vital maritime choke point have now put all those voyages and much else in global shipping into a state of uncertainty. 🧵 On Saturday, Houthi rebels in Yemen hit one of the MSC’s container ships the Palatium III with a missile and narrowly missed ships from Hapag and Maersk on Friday. All 3 liners and several others announced an immediate pause to ships transiting the Suez Canal /2

Today I'm remembering my great grandfather Clare Koogler (left) who fought with his brother Bill (right) in the Meuse–Argonne offensive that secured victory for the allies in WW1. They celebrated Armistice Day in Paris on Nov 11, 1918, the holiday we now call Veterans Day. Clare, who our family always called Pops, passed when I was 9 years old, and I still have many great memories of visiting him in New Mexico.

Every year for Fleet Week, employees at Lucasfilm, creators of Star Wars, take a day to draw wonderful sidewalk chalk art outside their headquarters in the Presidio of San Francisco. Thought I'd share this year's pieces since there's a 10% chance of rain today. 🧵